Minimal Availabilities Show Demand for New Construction in Raleigh-Durham
Vacancies are limited for new construction projects that have delivered in the last 18 months
June 19, 2019
- Vacancies are limited for new construction projects that have delivered in the last 18 months. Of the five largest deliveries, only Mill No. 1 in Downtown Durham has a vacancy rate greater than 3.0 percent. This lack of availability combined with increased tenant demand demonstrates the need for new construction in the market. Over 1.7 million square feet of class A office space is currently under construction, with another 5.5 million square feet proposed throughout the market.
- Tenants in the Raleigh-Durham market are unused to looking for new space more than 12 months in advance. However, due to restricted availability in recent deliveries, that mindset is changing. WeWork’s 80,000 square foot lease helped to kick off One Glenwood in 2018. As the building neared completion, more tenants, including Gannett Fleming and First Tennessee Bank, signed leases. In early 2019, One Glenwood delivered nearly 100 percent occupied.
- The Dillon delivered at around 45.0 percent occupied in May 2018. Arch Capital Group signed a lease shortly after delivery for nearly 105,000 square feet, bringing the occupancy rate up over 97.0 percent by August.
Source: JLL Research