At last year’s conference, NAI Carolantic predicted that 2011 would be a painfully slow recovery year, but that we would see bottom. They were right on target once again. We finished the year with a drop in vacancy in the multipurpose and office sectors and remained the same in retail. We also had increases in absorption in all but two submarkets. That was the message to more than 1,700 business and community leaders who gathered at Raleigh’s RBC Center on January 18th for the 27th Annual Triangle Commercial Real Estate Conference hosted by NAI Carolantic Realty. The Conference is considered the authoritative “state of the market” report on the Triangle’s real estate sector and an accurate bellwether on the health of the region’s overall economy.
Steve Stroud, SIOR, Chairman of NAI Carolantic, welcomed attendees noting NAI Carolantic was celebrating “Forty Years of Forward Thinking.” He also said he was glad to be there given a tractor accident three months earlier. He thanked family, his team at NAI Carolantic and friends for their numerous acts of kindness during his recovery.
Following Stroud’s comments, NAI Carolantic President Jimmy Barnes, SIOR took center stage to review the past year’s commercial real estate landscape and offered Carolantic’s forecast for 2012.
“Remember, leasing is big business, as it has been reported there is over a trillion dollars nationally in lease obligations for public companies alone. We are finally making headway, but nowhere near where we were in 2007. The national capital markets are affecting business here in the Triangle. The primary stories are lots of money available but also billions of dollars of maturing debt. Local and community banks are trying to work with their customers, but vacancies and declining values are big obstacles. In addition, a lack of institutional grade, Class A product, low interest rates, and an abundant money supply have driven up activity and consequently prices. The Triangle has benefited from this activity with large transactions in the apartment market ($850 million) as well as the office market. There is still a lot of political unrest, but we are seeing a national recovery, and our local real estate market is as active as we have seen it over the last 36 months. Nothing robust, but we are optimistic moving into 2012”, said Barnes.
NAI Carolantic’s survey and analysis showed that, in a market of almost 240 million square feet of office, multipurpose and shopping center space, nearly 32 million square feet remained vacant at year-end. “Vacancy decreased slightly in the office and multipurpose sectors, and the shopping center market remained at 6% for the third year in a row. Absorption improved slightly in 2011 and we expect minimal construction in the first quarter of 2012. The apartment market continues to be on fire with the vacancy rate the lowest in the past decade,” said Barnes.