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    Q3 2012 OfficeSnapshot

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    The Triangle office market saw further positive momentum this quarter with 205,000 Square Feet of positive Net Absorption. This number is in line with the Net Absorption posted in the previous two quarters and maintains the momentum that the market has experienced recently. As large blocks of Class A space become more scarce the Class B market will see an increase in activity for larger deals.

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    Q3 2012 OfficeSnapshot

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    Anonymous Feglbx5
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    The Triangle office market saw further positive momentum this quarter with 205,000 Square Feet of positive Net Absorption. This number is in line with the Net Absorption posted in the previous two quarters and maintains the momentum that the market has experienced recently. As large blocks of Class A space become more scarce the Class B market will see an increase in activity for larger deals.

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    The Triangle office market saw further positive momentum this quarter with 205,000 Square Feet of positive Net Absorption. This number is in line with the Net Absorption posted in the previous two quarters and maintains the momentum that the market has experienced recently. As large blocks of Class A space become more scarce the Class B market will see an increase in activity for larger deals.

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    Download as PDF, TXT or read online from Scribd
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    68 views2 pages

    Q3 2012 OfficeSnapshot

    Uploaded by

    Anonymous Feglbx5
    The Triangle office market saw further positive momentum this quarter with 205,000 Square Feet of positive Net Absorption. This number is in line with the Net Absorption posted in the previous two quarters and maintains the momentum that the market has experienced recently. As large blocks of Class A space become more scarce the Class B market will see an increase in activity for larger deals.

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    Office Market Snapshot

    Raleigh-Durham Third Quarter 2012


    Market Tracker
    *Arrows = Current Qtr Trend

    Vacancy
    17%

    Net Absorption
    204,583 SF

    Deliveries
    60,053 SF

    Asking Rent
    $19.71 SF

    Market Maintains Steady Pace


    The Triangle office market saw further positive momentum this quarter with 205,000 square feet of positive net absorption. This number is in line with the net absorption posted in the previous two quarters and maintains the momentum that the market has experienced recently. The growth was relatively balanced between Class A and B spaces, but as large blocks of Class A space become more scarce the Class B market will see an increase in activity for larger deals. Of the deals signed this quarter, most were relatively small (less than 10,000 square
    Raleigh Office

    feet), evidencing the shrinking inventory of Class A larger blocks of office space. However, Lenovo was the breadwinner in terms of large leases, with a 70,000 square foot expansion for
    Q3 12 Q3 11
    891.2K 9.1% 9.7% 50.26

    Economic Indicators

    eight and one half year. As expected, this quarters growth has led to a decrease in the vacancy rate for the Triangle office market (all classes) lowering it 0.5 percent to its current rate of 17.0 percent. Despite the positive momentum over the past year, the Triangle office market is still a tenants market. Concessions are not yet drying up although landlords are holding on their rental rates and the amount of tenant improvements they are willing to provide in order to get a deal closed. It has become more common for landlords to maintain their asking rates, but in return for a month or two more in free rent to maintain values. As a result of these practices, the market rental rates have remained relatively flat over the past three months, and we should expect this through mid-2013. Investment sales activity in the region continues to post robust numbers, with nearly $80 million in deals closed in the past three months. In the largest year-to-date office transaction, Americas Real Estate Partners completed the sale of their three-building Class A portfolio to Investcorp in September 2012. Cassidy Turley represented the seller in the 287,000 square

    Triangle Employment Triangle Unemployment U.S. Unemployment U.S. CCI

    918.9K 7.9% 8.2% 65.64

    (Consumer Confidence Index)

    Net Absorption
    2,000
    Square Feet ('000s)

    1,500 1,000 500 0 -500 -1,000

    05

    06

    08

    09 20 10

    20 11

    07

    20

    20

    20

    20

    20 12

    foot transaction for $48.4 million. Institutional investors continue to be attracted to the Triangles real estate investment opportunities, indicating how strong the areas economy is viewed on a national level.

    20

    Office Net Absorption

    Vacancy Rate
    20% 18% 16% 14% 12% 10% 8% 2006 2007 2008 2009 2010 2011 Historical Average

    Forecast
    A fair amount of activity is boiling underneath the surface, awaiting post-election certainty. The fourth quarter should be robust in terms of getting deals finalized, especially in the RTP/I-40 submarket. Renewals will continue to be consummated with little to no downsizing, indicative of the growing role of organic growth in the market. As large blocks of Class A space continue to be more scarce, tenants will turn more frequently to Class B options to fulfill their needs, boosting absorption in that sector. Asking rental rates will stabilize and then begin to increase in 2013.

    www.cassidyturley.com

    cassidy Turley Office Market Snapshot


    Raleigh-Durham Third Quarter 2012
    TOTal BlDgS invenTORy SuBleT vacanT TOTal vacanT Sf DiRecT vacancy % cuRRenT neT aBSORpTiOn yTD neT aBSORpTiOn unDeR cOnSTRucTiOn aveRage
    (all claSSeS)

    aveRage
    (claSS a)

    aSking RenT aSking RenT

    Submarket
    Cary Chapel Hill Central Durham Downtown Raleigh and Cameron Village Eastern Wake County Northern Durham North Raleigh* Southern Wake County West Raleigh and US 70 / Glenwood I-40 / RTP / South Durham 119 35 53 80 20 30 177 11 150 187 5,706,957 1,521,338 3,046,833 4,522,876 526,964 1,325,593 8,308,103 243,587 8,582,258 12,881,835 206,344 31,226 31,590 11,740 35,950 222,822 190,892 809,792 274,984 321,526 520,136 137,631 506,226 1,401,656 100,681 1,024,791 2,857,431 14.2% 18.1% 10.6% 11.5% 26.1% 38.2% 16.9% 41.3% 11.9% 22.2% (38,493) 6,977 (31,717) (5,331) 17,247 43,860 98,959 12,572 75,399 25,110 (14,748) (1,585) (51,516) (39,850) (31,035) 16,665 144,022 2,008 179,276 268,678 133,000 132,000 18,000 $20.37 $23.00 $21.58 $21.38 $16.65 $20.55 $20.45 $17.17 $21.19 $19.87 $20.66 $24.12 $23.99 $22.60 N/A $21.23 $21.67 $17.79 $21.61 $20.37

    TRiangle MaRkeT TOTalS


    Class A Class B Class C 356 397 109 862 29,311,523 14,389,525 2,965,296 46,666,344 730,564 3,992,418 3,331,175 631,261 7,954,854 13.6% 23.1% 21.3% 17.0% 82,280 118,653 3,650 204,583 156,604 173,427 (3,796) 471,915 283,000 283,000 $21.34 $17.27 $15.41 $19.71

    TOTal

    Office asking rents converted to Full Service *Includes Six Forks Rd, Falls of the Neuse Rd & US 1/Capital Blvd

    Ofce Submarkets
    Raleigh / Durham

    Key Lease Transactions Q3 2012


    pROpeRTy
    5221 Paramount Parkway 4600 emperor Drive Keystone Centenial Science 801 Jones Franklin Road

    Office Submarkets
    Raleigh / Durham
    TenanT
    Lenovo The county of Durham Unknown Stantec

    Sf
    70,302 49,692 34,015 27,000

    TRanSacTiOn Type
    Lease lease Lease Renewal

    SuBMaRkeT
    RTP/RDU
    1

    RTp/RDu West Raleigh West Raleigh


    4

    3 11
    Raleigh Durham Int. Airport

    10
    40

    12

    13

    Key Sales Transactions Q3 2012


    pROpeRTy
    430 Davis Drive

    5 6

    15 9

    440

    14
    40

    Sf
    152,366

    SelleR/BuyeR
    america's Re partners/investcorp

    pRice
    $27,600,000

    SuBMaRkeT
    RTp/RDu
    7

    40

    530 Davis Drive 2610 Wycliff Road 630 Davis Drive

    72,082

    america's Re partners/investcorp Wycliff Ventures LLC/Garrison Investment Group america's Re partners/investcorp

    $14,100,000

    RTp/RDu
    1. 2. 3. 4. 5. 6. 7. 8. Orange County North Durham Central Durham South Durham RTP / I-40 Corridor Cary Southern Wake County Eastern Wake County 9. West Raleigh 10. US 70 / Glenwood Ave. 11. Six Forks Road 12. Falls of Neuse Road 13. US 1 / Capital Blvd 14. Downtown Raleigh 15. Cameron Village

    173,305 63,144

    $8,000,000 $6,600,000

    West Raleigh RTp/RDu

    Bold Text = cassidy Turley Transaction

    David finger
    Senior Vice President Managing Principal

    about cassidy Turley


    Cassidy Turley is a leading commercial real estate services provider with more than 3,600 professionals in more than 60 offices nationwide. The company represents a wide range of clientsfrom small businesses to Fortune 500 companies, from local non-profits to major institutions. The firm completed transactions valued at $22 billion in 2011, manages 455 million square feet on behalf of institutional, corporate and private clients and supports more than 28,000 domestic corporate services locations. Cassidy Turley serves owners, investors and tenants with a full spectrum of integrated commercial real estate servicesincluding capital markets, tenant representation, corporate services, project leasing, property management, project and development services, and research and consulting. Cassidy Turley enhances its global service delivery outside of North America through a partnership with GVA, giving clients access to commercial real estate professionals in 65 international markets. Please visit www.cassidyturley.com for more information about Cassidy Turley.

    3110 Edwards Mill Road Suite 210 Raleigh, NC 27612 Tel: 919.789.4255 Fax: 919.789.0268 Email: David.Finger@cassidyturley.com
    The information contained within this report is gathered from multiple sources considered to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy. Copyright 2012 Cassidy Turley.

    www.cassidyturley.com

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