Raleigh, NC Economic Overview
Also known as the “City of Oaks” due to the abundant number of oak trees, Raleigh is one of the nation’s hidden treasures that almost seems to go un-noticed. However, it is one of the fastest growing cities in the U.S.A., with a population of roughly 459,000. It is especially well-known for attracting some of the brightest minds in science and technology, as several research centers have opened up and created new jobs in both sectors. The large presence of educated and well-accomplished workers adds a lot of value to the Raleigh commercial real estate market.
One of the most signature aspects of Raleigh is that it is part of the “Research Triangle”, a national research park that specializes in biotechnology research and hi-tech innovation. Many of the largest and most profitable sectors in the city also happen to be the ones that are most immune to recession as they will always be in high demand. Seeing as Raleigh was the #1 ranked place for business and growth by Forbes Magazine in 2015, it is safe to say that its economy will continue to boom for the foreseeable future.
Raleigh, NC Commercial Real Estate Market
The Raleigh office space market is seeing an interesting trend in which the asking prices for office spaces have increased and the number of available listings for industrial and retail properties have gone down in the past two years. This can be explained by the rapid expansion of local companies combined with the migration of several newer companies that want to take advantage of the booming workforce in Raleigh.
Downtown (Old Raleigh) has had nearly $3 billion invested in the development and expansion of several properties that include businesses, offices, hotels and stores. Projections show that a grand total of 4 million square feet will be added to the downtown area, with a million square feet going exclusively towards new office space. Tech company Red Hat moved 630 of its employees to occupy Downtown Raleigh office space in 2002, and many more enterprises have followed suit since then.
North Raleigh can be described as the ‘best of both worlds’. On the one hand, the North Raleigh office market contains over 100,000 square feet of rentable office space and millions of square feet taken up by major retailers like JC Penney and Millar. On the flip side, the presence of two 18-hole golf courses attracts many affluent individuals who will happily purchase the multi-million dollar homes located right beside them. Business and pleasure are mixed together in this prestigious part of the city.
South Raleigh has been ignored with respect to the construction and development of commercial office space due to several development regulations. However, with several new investments from various medium businesses, the South Raleigh office market could look more promising in the near future, as it aims to blend in with the infrastructure of Downtown Raleigh.
East Raleigh is largely a residential area in which buyers can find generally lower priced homes. Small mom & pop shops, along with the WakeMed Raleigh Campus, are the only real properties that take up any noticeable East Raleigh office space in this region of the city.
The West Raleigh office market primarily includes the fine arts and education, with little in the way of retail or business. It is also home to the prestigious North Carolina State University in which students can get a well-rounded education and qualify themselves for the job opportunities available in busier sections of Raleigh. Overall, you can expect to find several smaller-name amenities concentrated in this neighborhood.
Raleigh, NC Office Sales Volume
Data provided by Yardi Matrix, for properties larger than 50K SF, which sold at over $5M.
Raleigh, NC Office Transactions
Data provided by Yardi Matrix, for properties larger than 50K SF, which sold at over $5M.
Raleigh, NC Commercial Inventory Breakdown
Office Spaces
Total: 33,324,325 SF
By square footage range:
- 50k to 100k SF: 8,176,109 SF / 24.53% of total office
- 100k to 500k SF: 21,086,339 SF / 63.28% of total office
- 500k to 1M SF: 1,106,777 SF / 3.32% of total office
- > 1M SF: 2,955,100 SF / 8.87% of total office
By class:
- Class A+: 336,834 SF / 1.01% of total office
- Class A: 16,755,229 SF / 50.28% of total office
- Class B: 8,033,410 SF / 24.11% of total office
- Class C: 1,366,474 SF / 4.1% of total office
Industrial
Total: 2,001,530 SF
By square footage range:
- 50k to 100k SF: 83,000 SF / 4.15% of total industrial
- 100k to 500k SF: 1,918,530 SF / 95.85% of total industrial
By class:
- Class A: 248,921 SF / 12.44% of total industrial
Employment in Raleigh, NC
Raleigh boasts a low unemployment rate of 4.30% (vs. the national average of 5.20%) and a stunning job growth rate of 3.48%, making it one of the most prosperous economies in the country. In particular, the most abundant sectors are government, science, healthcare, sales and materials transportation. Numerous logistics systems allow for the easy and effortless transportation of materials in and out of the city. Therefore, Raleigh is transforming into a hotbed for job opportunities. This is particularly attractive for anyone who is looking for new employment with competitive salaries and direct connections to powerful research facilities.
Education in Raleigh, NC
Raleigh is home to well over 50 schools that provide top-rate primary and second education to growing students, and 12 post-secondary institutes that offer a diverse range of specialties and trades to young people. North Carolina State University has received hundreds of millions of dollars in external funding for research, allowing them to train students with the skillset needed to immediately jump into the workforce. Unsurprisingly, engineering and science are the most popular programs and graduates have no problem finding employment within the “Research Triangle”.
Commuting Time in Raleigh, NC
The average one-way commute time within Raleigh is 24 minutes, with a great majority of the citizens using their own vehicles to travel to work. A well-designed highway system allows for nearby outsiders and locals to travel around the city with ease and comfort, such that congestion is usually a non-issue, except for rush hours. Although there are numerous public transit systems offered by the city, statistics show that only 1% of Raleigh’s citizens regularly use them.
Raleigh Demographics
Population
- Total Population457,159
- Male Population(48.4 %) 221,234
- Female Population(51.6 %) 235,925
- Median Age33.20
Income/Financial
- Average Household Income$90,550
- Median Household Income$63,891
- Median Income Under 25$34,445
- Median Income 25-44$67,308
- Median Income 45-64$73,327
- Median Income Over 65$52,374
News
The handwringing over the latest exploits, likes and dislikes of millennials has become somewhat of a national sport. Some of the observations are the result of generational rivalry rather than insights into wide-ranging trends. Still, it’s essential to recognize that—given their sheer numbers—a...
2019 US Office Pipeline – NYC, the Bay Area and San Francisco Set to Deliver 33 MSF of Office Space
April 10, 2019
Since 2009, the U.S. economy has had more than 110 consecutive months of growth, making this the second longest economic expansion since the Great Depression. After a rather tepid 2017 performance, the U.S. office market gathered some steam in 2018, adding 76 million square feet of new office sp...
2018 Office Check-In: Top US Markets for Development, Largest Projects of the Year
September 20, 2018
We’re almost halfway through H2 2018, and it’s high time to check up on construction activity, as well as the state of the U.S. office pipeline when compared to previous analyses. Last year around the same time, we looked at top U.S. cities for office delivery during the fall-winter season, and ...