2022 Triangle Market Overview and 2023 Forecast: WAREHOUSE

February 24th, 2023

Warehouse Trends and Outlook Ed Brown NAI Tri Properties

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.

What was unique about 2022? And were there any milestones for this property type?

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.

Who were the big “winners” in this property type?

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.

Do you see any new emerging trends? Where do you see growth occurring?

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.

What do you anticipate for 2023?

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.

Where do you see opportunities in your property type for Raleigh, Durham, and the greater Triangle?

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.

In our market, what challenges are there in this property type?

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.

What factors are you seeing drive CRE decisions in this property type?

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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