The Triangle’s commercial real estate market continues to demonstrate resiliency, even as the Omicron variant of the coronavirus that causes COVID-19 emerged during the fourth quarter of 2021, a new report from CBRE|Raleigh found.
Despite the ongoing uncertainty and the emergence of a new variant during the fourth quarter, the vacancy rate declined and the region experienced a strong positive net absorption.
Both of these, and their trends, are “indicators of the market’s resilience,” a statement from CBRE|Raleigh reads.
And average rental rates also increased in the fourth quarter of 2021, the report found.
The Triangle saw 720,000 square feet of positive net absorption during the fourth quarter of 2021, which the report highlights was “largely due to significant new construction deliveries with preleasing in the quarter.”
Net absorption is the difference between the square footage occupied during a specific period and the space vacated during that same period, according to CBRE.
One company on the move was Garmin, which expanded into a 62,400 square foot facility that the company leased in Cary’s Regency Center I.
And the most absorption occurred in downtown Raleigh, the report found, with 212,500 square feet of absorption. That’s largely led by the preleasing of 301 Hillsborough, CBRE said. That building will be occupied in part by Raleigh tech unicorn Pendo, which preleased five floors (125,000 square feet) of the building for its new headquarters location. The company plans to bring employees into the office beginning next Monday.
Vacancy rates decreased by 27 basis points between the third quarter and the fourth quarter, the report found, with vacancy now at 12.71%.
In Class A, the vacancy rates “remained stable quarter-over-quarter at 12.42%.”
But leasing rates increased, even among Class A properties, with the average rate now $30.58, 5% higher than the fourth quarter of 2019.
Office space is most expensive in Six Forks, downtown Raleigh, North Hills, and central Durham, the report noted.
Original Article Source: WRAL TechWire