Raleigh Office Market Report
Annual full-service asking rental rates increased to a new historic high of $31.08/SF, reflecting quarterly and yearly growth of 2.0% and 4.2%, respectively. Occupancy declined year over year, as the market continues to work through the new deliveries that have occurred in recent years, pushing overall vacancy rates up by 260 basis points to a historic high of 21.0%. The under-construction pipeline expanded to 103,624 SF under construction but remains well below historic averages as the impacts of higher financing and construction costs have slowed construction starts. Total leasing activity closed the quarter 34.2% below the 16-year first-quarter average of 1.2 MSF at 768,023 SF.