Market Report R A L E I G H , N C O F F I C E M A R K E T

Q1 2019

Office Market SnapshotMarket Supply (SF)Under Construction (SF)

Direct Vacancy (%)Total Vacancy (%)Total Net Absorption (SF)YTD Net Absorption (SF)

Direct Asking RentClass A Direct Asking RentClass B Direct Asking Rent

69,613,0201,877,541

8.1%8.4%

748,318748,318

$25.94$28.56$22.26

1Q 2019 CHANGE69,004,8082,637,404

8.0%8.4%

941,3802,367,413

$25.47$28.10$22.16

4Q 2018

San JoseCharlotteLas Vegas

RaleighFort Lauderdale

SeattleSacramentoMinneapolis

AtlantaPortland, OR

8.0%6.7%6.3%6.2%6.0%5.6%4.8%4.7%4.4%4.3%

Top 10 Rent Growth Markets

HIGHLIGHTS

Office Submarkets

Raleigh-Durham is the 10th fastest growing metro area in the United States by total population percentage, growing nearly +21% between the years 2010-2018.

Recent first generation sales, including The Station at East 54 and Legacy at Brier Creek, are quickly moving Raleigh-Durham office investment pricing in-line with other highly sought after U.S. markets like Charlotte, Austin, TX , and Nashville, TN.

Raleigh ranked as the #3 “Surge City” in America in a 2019 report from Inc. Magazine that identified the top 50 places to start a business.

Nearly 900k square feet of new office space was delivered in the Triangle during the first quarter of 2019, led by One Glenwood at the intersection of Hillsborough Street and Glenwood Avenue and two new additions to Perimeter Park along the I-40 corridor.

440

54040

85

Office Market StatisticsInventory Completions Construction 1Q 2019

Absorption1Q 2018

AbsorptionDirect

Asking RateVacancy

RateVacantSpace

Submarket

395,776168,571

564,347 521,514750,089131,169180,971307,593116,511

622,162297,590

1,839,982545,010

0

5,312,591 5,876,938

7.8% 2.6%4.9% 7.4% 8.1% 4.9% 16.3% 14.0% 5.3% 6.9% 7.1%

17.6% 6.4% 0.0%

9.2% 8.4%

-100,370172,123 71,753 61,718

252,549-21,73017,984

-15,93015,21896,147-8,041176,473102,177

0

676,565 748,318

-5,31944,90339,584146,31930,91064,150

0-60,540

1,066-28,43165,83757,23259,304

200

336,047 375,631

----

309,000- - -

31,932 306,431

- -

227,500 -

874,863 874,863

252,905149,842402,747 390,000

-174,000100,000

-31,854

301,7000

152,456324,784

-

1,474,794 1,877,541

$32.15$31.60$31.96$28.17$27.08$25.35$15.10$27.64$19.87$25.18$24.74$22.14$29.37$28.83

$25.23$25.94

5,089,6406,519,674

11,609,3147,069,8889,249,0282,684,5931,107,9732,196,3262,184,3289,055,1064,211,369

10,451,8188,519,4191,273,858

58,003,706 69,613,020

Downtown DurhamDowntown Raleigh

URBAN TOTALS6 Fork Falls Of NeuseCaryGlenwood/CreedmoorNorth DurhamOrange CountyRoute 1RDU/I-40South DurhamResearch TriangleWest RaleighEast Raleigh

SUBURBAN TOTALS RALEIGH TOTALS

New Office Space Under Construction390,000

225,000

209,145

154,987

152,456

140,000

130,000

115,000

97,462

6 Forks Falls of Neuse

Downtown Durham

West Raleigh

Downtown Raleigh

Research Triangle

Glenwood/Creedmoor

Glenwood/Creedmoor

West Raleigh

RDU/I-40

SUBMARKETTower IV at North Hills

555 S. Mangum St

Wade V

FNB Tower

Triangle 54 - Building I

Crabtree Terrace

GlenLake Seven

3800 Glenwood Ave

3300 Paramount Parkway

BUILDINGKane Realty

Northwood Ravin

Dominion Realty Partners

Dominion Realty Partners

The Keith Corporation

East West Partners

Highwoods Properties

Grubb Ventures

Trinity Capital Advisors

DEVELOPER/OWNER SF ASKING RENTS$38.50

$34.50

$32.00

$35.50

$28.50

$35.50

Withheld

$37.50

$26.50

MAJOR TENANT(S)IAT Insurance

Spaces

NA

First National Bank

Rho, Inc.

Spaces

Highwoods Properties

Brasfield & Gorrie

Varonis

Recent Investment SalesOrange County

RDU/I-40

Glenwood/Creedmoor

RDU/I-40

SUBMARKETThe Station at East 54

Forty540

Legacy at Brier Creek

3900 N Paramount Pkwy

BUILDING47,856

195,521

129,000

224,850

RBA$19,925,000

$58,100,000

$34,100,000

$48,305,000

SALE PRICE PRICE/SF$416

$297

$264

$215

Market Data Source: CoStar data pulled 5.2.19 | Real Capital Analytics | Triangle Business Journal | Lincoln Harris Research

FOR QUESTIONS, CONTACT: Tyler Ashley, Research Analyst

704.714.7663 tyler.ashley@lincolnharris.com

A record high $1.9 billion was traded across Raleigh office assets in 2018.

Market Report R A L E I G H , N C O F F I C E M A R K E T

Q1 2019

Signed Lease TransactionsBUILDINGTENANT SIZE TYPECrossroads Corporate Park

DurhamiD - 300 Morris St

Palisades II

One Glenwood

Wake County Board of Education

WeWork

Kuehne & Nagel

Issuer Direct

249,605

74,937

21,234

9,776

Renewal/Expansion

New

Renewal

New

SUBMARKETCary

Downtown Durham

West Raleigh

West Raleigh