Raleigh-Durham industrial cap rates and vacancy continue to rise, though market optimism grows

– The Raleigh-Durham industrial market has seen a brief rise in vacancy and capitalization rates. As of 3Q2024, average cap rates were 8%, while the vacancy rate QTD is 6%.

– Due to the rise in interest rates from 2022-2023, cap rates grew as cost of capital increased. Simultaneously, Raleigh-Durham has seen nearly 20 msf delivered since 2021, which accounts for nearly a quarter of total inventory. As a result, vacancy rates are temporarily elevated, while average NNN asking rents rose , indicative of newer Class-A product being delivered, and a competitive Class-C product market.

– Market optimism remains as we have seen a healthy balance between deliveries, vacancy rates, and asking rents.