®
oundtable:
Outlook and trends Industry leaders discuss the characteristics that make Raleigh-Durham unique and what the future might hold in the commercial real estate sector.
William Allen
Andy Andrews
Partner Trinity Partners
What makes the Raleigh-Durham region unique compared to other areas? Raleigh is the state’s capital city and is the center of local and state government. We also have the world-renowned Research Triangle Park (RTP), which has been the region’s biggest catalyst for growth and economic development since its formation in the 1960s. Then there are our three major universities: North Carolina State, Duke and UNC Chapel Hill, which together provide what is one of the most attractive things about our region: a strong education system and a home-grown, educated workforce that is central to attracting companies to this region. What changes typify the local commercial market? COVID and the resulting government mandated shutdowns have made it impossible to physically occupy office space. This has created a complete breakdown in the typical landlord-tenant dynamic, with most leaseholders not being able to make any real estate decisions due to such uncertainty. The long-term outlook as to re-occupancy, utilization of space and hiring is in a state of flux and if any decisions are being made, most of those are short-term decisions. Investment grade real estate cannot survive based on a temporary, short-term outlook. Which of your services have grown in demand? Our largest area of growth has been taking on additional property management assignments. We’ve added nearly 2 million square feet of industrial and office space to our portfolio just in the last year. I would attribute this to the continued attractiveness of our market from outside investment. 72
CEO Dominion Realty Partners
What makes the Triangle-area market attractive? From a business perspective, you would have to say that the area has grown due to the number of students that we have graduating on an annual basis. I think there are above 25,000 kids who are graduating in this geographic area every year. That gives you a feeder for all these companies to hire raw talent and they all seem to want to be here. It started a while back, with the Research Triangle Park, and it’s just grown exponentially. The Sun Belt is where everyone wants to relocate to, and we couldn’t be doing what we’re doing without our location. Those two factors combined make us one of the top-tier geographic areas in the country. What sustainability features have you seen become mainstream? There is a circular answer here. We started doing green development in 2007, before people really knew what LEED stood for. Now all of our buildings have some certification for green. We check these boxes. Saying that, the one area that really needs to improve is education. The general public, whether they are an apartment renter or an office tenant, doesn’t really understand what these certifications mean. Today, it’s a very interesting topic. It’s foremost on the minds of all the buyers of our real estate. All of our buyers require their purchases to be certified. Now, back that step up: Do all the office tenants mandate that they work in a green-certified office building? The answer is certainly not. They should be, especially after COVID. You’re using less water, less energy and it provides a healthier work or live environment all around. It’s simply a smart life decision to occupy green product.
| Invest: Raleigh-Durham 2021 | COMMERCIAL REAL ESTATE & CONSTRUCTION
