Durham, North Carolina.  Grosvenor Investment Management paid $105.5 million for 1.5 million square feet of space of Research Triangle Center buildings.  That equates to about $70 per square foot and is about double what the seller, Transwestern Investment of Chicago paid for it two years ago.  The space Grosvenor purchased  is 82% leased.  After the dot com bubble burst a few years ago, the Triangle became one of the nation’s worst areas for empty warehousing.  Now, it is a red hot area and premium prices are being paid for space.  In just over a year the Triangle has seen a 17% vacancy rate decline to just above 10%. 

John Fish (919) 696-3474   Email: marvmax@mindspring.com   Website: www.JohnFish.com

Cary - During the dot com bust in this area, Cary’s office vacancy rates dropped to more than 20%.  Now, it is about 13%.  Demand for space is so strong that neighboring markets are in heavy demand as well.  Strangely enough,  while developers are building more than 1.7 millions square feet of new office space all across the Triangle area, there are currently no leasable offices under construction in Cary.  By the same token, half of the 2 million square feet of proposed offices in the Triangle are planned for Cary.  As hot as the market is developers may want to wait until companies commit to space before building.  I rather imagine that problems in other areas around the country are making them a bit timid.

John Fish (919) 696-3474   Email: marvmax@mindspring.com   Website: wwwJohnFish.com

Raleigh - Recent data with regard to the Triangle office market vacancy rate is very positive to some and not so positive to others.  During the three months ending September 30, the Triangle office vacancy rate increased for the first time since 2004.  The vacancy rate of Triangle offices increased to 13.2% at the end of the third quarter from 12.9% at the end of June.  However, much of the increase can be attributed to the 340,000 square feet of new space added during the quarter.  New offerings were 73% leased when completed which was in line with previous quarters.  The net absorption (total space leased minus total space vacated) was 311,874 square feet or 15% below the quarterly average of the previous two years.  None-the-less, large new employers, such as Fidelity, are expected to fill much of this space.

John Fish (919) 696-3474   Email: marvmax@mindspring.com   Website: www.JohnFish.com

Research Triangle.  As you have read in some of my previous posts, developers from California, Florida, Virginia, New York, Pennsylvania and Illinois (in particular) are pumping money into new commercial construction in the Research Triangle area.  From 2000 through 2005 the nation’s population grew 5.3%, North Carolina’s population grew 7.8% and the seven county Triangle region grew by 14.8%.  Developers expect three of the seven counties, Wake, Chatham and Johnston (in particular) to continue to show strong increases in population and commercial growth well into the forseeable future: especially as new segments are added to Interstate 540.  

John Fish - (919) 696-3474    Email: marvmax@mindspring.com  Web Site: www.JohnFish.com