February 24th, 2023
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 2022 to activities we anticipate in 2023.
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.
Rising interest rates presented development challenges and pushed up investment CAP rates. We saw an eastern Wake County industrial park achieve a 3.55 CAP rate which marked the peak of the investment market.
Industrial developers who obtained construction financing prior to the rate increases that first occurred in March 2022 were the big winners in the warehouse market.
Industrial development continues to move further outside of the historically ground zero location of the RDU/RTP submarket. There are growth opportunities in the submarkets outside of RDU/RTP in locations that have zoning, utilities, and highway access.
In 2023 we can expect continued end-user/tenant-buyer demand, as well as a continued increase in development costs, interest rates, and the cost of materials.
There are opportunities in locations outside of the historically ground zero RDU/RTP submarkets that have zoning, utilities and access to highways. Also, developers who can obtain financing may be able to pick up opportunities from others who had to drop development deals due to the economy.
Land costs have increased to a point where it is hard to make the numbers work for industrial development in addition to interest rate increases and material price increases.
Population growth will continue to drive a need to move commodities to consumers AND I-540 is making new locations accessible to roads for E-Commerce growth.
As you look ahead, planning your CRE goals for 2023, let our real estate advisors help guide you with insider market knowledge and experience.
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