The 28-million-square-foot Raleigh-Durham community-neighborhood shopping is still trying to balance itself, as vacancy has fallen but rents refuse to improve. The second quarter vacancy rate is 9.7%, unchanged from the prior quarter and down 30 basis points from 12 months earlier. The rate fell 10 basis points in July. The rate has remained at the high end of the 9.0% range since 2009. Power Center vacancy is reported at 5.6%, down 40 basis points year-over-year. According to the Reis forecast, community-neighborhood vacancy will finish 2012 at 9.5%, and then start a gradual decline. The rate should make it to near 8.0% by 2015-16. Construction here has been fairly strong, averaging a little less than 600,000 square feet per year from 2002 to 2011. Net absorption in that time span averaged 465,000 square feet annually, with the higher totals weighted towards the early 2000s. Reis forecasts community-neighborhood new construction to total 128,000 square feet in 2012, with net absorption nearly double at 230,000. Reis reports two neighborhood centers have completed thus far 2012: the 57,000-square-foot Market at Colonnade, in June, and the 70,000-square-foot West Point at 751, which completed in September. The 111 Seaboard neighborhood center redevelopment is under way for completion in October 2012.
The average asking and effective rent fell 0.1% and were unchanged, respectively, in the second quarter at $17.52 psf and $14.74 psf. The rates are up a few cents over 12 months. The current asking rent is lower than the rate recorded in 2010. July rents showed some slight improvement. Losses of 0.3% asking and 0.1% effective are forecast for 2012, with no notable improvements (over 2.0%) called for until 2014.
According to Colliers’ mid-year 2012 retail report, the Raleigh-Durham-Chapel Hill area has a retail vacancy rate of 9.3%, up 50 basis points from one year earlier, and a “quoted” June rent of $15.10 psf, up 5.37% from one year earlier. This source quotes year-to-date net absorption of 61,122 square feet.