The 30.5-million-square-foot Raleigh-Durham warehouse/ distribution market second quarter vacancy rate is 15.8%, Reis reports. The rate is down 70 basis points over the quarter and 40 year-over-year. Occupancy has shown improvement because net absorption continues to perform well. After a positive 271,000 square feet in the first quarter, the second quarter posted a solid 227,000 square feet. The July vacancy rate was down 20 basis points. No warehouse/distribution space completed here in 2011 and none has completed so far in 2012, according to Reis’ latest construction data. Average asking and effective rents are reported at $4.92 psf and $4.36 psf, up 0.2% and 0.5% for the quarter, and up 0.4% and 1.4% year-over-year. July data indicate an effective rent gain of one cent. Minimal gains of 1.6% asking and 2.3% effective are forecast for 2012, but 2013 is expected see a 3.4% increase in asking rents and a 4.1% increase in effective rents for this property type.
For Flex/R&D space, Reis reports a vacancy rate of 11.2%, down 40 basis points for the quarter and down 110 basis points over 12 months. Net absorption has been generally positive here, posting 24,000 square feet in the first quarter and 56,000 in the second with no new construction. Rents finally gained in the second quarter, if slightly. Reis reports average asking and effective rents for Flex/R&D space at $9.86 and $8.66 psf, up 0.2% and 0.6% respectively, over the quarter. These rates are down 0.3% and unchanged over 12 months. Gains of only 0.6% for both categories are forecast for 2012; this is simply not a good market for industrial landlords. Annual rent gains approaching the 3.0% mark are not forecast until 2014.
Cushman & Wakefield reports an overall vacancy rate of 10.0% and a direct asking rent of $4.94 psf for Raleigh-Durham. “Electronic Systems Protection (ESP), an electronics manufacturer, signed the area’s largest lease over the quarter, committing to 85,000 square feet in the EastPoint building in Knightdale,” this source reported.