February 14th, 2022
Each year, our industry experts evaluate and review the Raleigh, Durham, and greater Triangle commercial real estate market’s annual performance. We share activity and trends from the market data we analyzed and experienced in 2021 to activities we anticipate in 2022.
What are the key market drivers? How have the different real estate sectors performed?
In this segment, we interviewed Ed Brown, CCIM, SIOR, Executive Vice President to share his thoughts on warehouse trends.
To learn more about other property types click on office, land, flex, healthcare, life science, investment sales, and retail.
The Triangle warehouse market in 2021 can be summarized by rent growth, decreasing vacancy, and cap rate compression.
Right now, it is easy to be a landlord or seller and hard to be a buyer or tenant due to the previously mentioned items above. There is more demand than supply and it is driving up rental rates and prices.
Developers will continue to try and find land to build more warehouses and flex buildings.
Due to a lack of industrial availability, developers are going further out from the traditionally desired I-40 RTP/RDU epicenter to find suitable land to develop. Example submarkets that are seeing this growth include North Durham, Efland/Mebane, Clayton, Smithfield, Youngsville, Creedmoor, Benson.
Developers, owners, and tenants are already seeing benefits to these previously overlooked corridors and they will continue to gain traction in 2022. I-40/I-85 including Efland/Mebane is a prime example of an emerging area that is well connected for manufacturers and distributors.
Due to the low industrial supply and continued demand, landlords and sellers will continue to push up rental rates and prices.
Multi-family developers and life science developers have driven the price up for land close to a point where flex and warehouse development does not make sense. As a result, flex and warehouse developers are having to look further out to the surrounding locations I mention above to find affordable land to make the numbers work.
Availability. Tenants are having to broaden the geographical area just to have options to consider. E-Commerce, building up inventory for the next pandemic, building up inventory because of the unstable supply chain, and some onshoring of manufacturing, will continue to drive demand.
Retail is finicky, office is snooty, life science is too technical, industrial is meat, potatoes, and apple pie!
As you look ahead, planning your CRE goals for 2022, let our real estate advisors help guide you with insider market knowledge and experience.
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