Winston-Salem, North Carolina
In the past few weeks, public health officials have been using the term “post-pandemic phase.” Even before that phrase became buzzworthy, the local Triad real estate market — specifically the office, retail and industrial sectors in Greensboro, Winston-Salem and High Point — showed positive indicators of growth and potential for growth after two-plus years of pandemic-related disruption.
Here's a look at reasons for optimism, as well as trends, in all three key sectors.
Triad office space
The vacancy rate for office space in the region is 13.1% and asking rates have shown a slight increase to $17.07 per square foot. The Triad market continues to show signs of future growth as new developments are underway throughout the market. At the end of the first quarter, there was roughly 258,000 square feet of new office construction taking place.
Could that construction indicate an upward trend with companies looking to return to the office? Greg Wilson, executive vice president at CBRE|Triad, expressed a measure of optimism.
“Since COVID-19 began, many locally owned and operated companies have had a greater percentage of their employees working in the office, while larger national and public companies have largely stayed away from the office altogether,” Wilson said. “We are starting to see major employers reoccupy, albeit with a more flexible schedule, and expect this trend to continue.”
Wilson added that lease structures have trended toward longer-term arrangements in recent months, which could be another positive sign.
Triad retail space
The second half of 2021 signaled a bounce back for retail space in the Triad market. Vacancy decreased to 6.62% and average asking rates increased to $12.25 per square foot, marking a nearly 4% year-over-year increase. Construction in the region slowed slightly with the completion of two major grocery-anchored shopping centers.
“The most active retail tenants right now are quick-service restaurants looking for opportunities that will allow for a drive-thru and outdoor seating, financial institutions, medical users and developer end-users looking for land for car washes and auto services,” said Matt King, vice president at CBRE|Triad.
Downtown Greensboro, North Carolina
Triad industrial space
Investor, developer and tenant demand for industrial space was strong during the first quarter of 2022, as indicated by Q1 trends. Industrial vacancy remained at a healthy level of 4.5%, and asking rates increased 1.79% from the previous quarter to $5.11 per square foot.
“Assuming the economy remains stable, industrial real estate fundamentals should be strong in the quarters ahead,” said Dodson Schenck, managing director of Industrial Services at CBRE|Triad. “We expect tenant demand to keep up with the construction and development projects in the pipeline; vacancy rates should stay relatively low and rents will continue to increase. North Carolina and the I-85/I-40 corridor will continue to be a desirable location for an expansion, new manufacturing or warehouse facility.”
The bottom line: Opportunity knocks
These positive trends across multiple sectors, as well as public will to leave the home, are indicators of a potential rebound. Because of that, King is bullish on the market’s continued growth potential. He pointed to the recent opening of the Steven Tanger Center for the Performing Arts and its impact on downtown Greensboro as evidence.
“The pandemic was a major disruption that we all had to go through. But as we make efforts to put that disruption behind us, there seems to be a lot of momentum coming on the heels of the recent economic development announcements, the huge success of the Tanger Center and [people’s] desire to get out to be a part of the community again,” King said. “Tenants who can take advantage of this momentum in the right way should be able to reap the rewards.”
