Economic Overview
RDU-Chapel Hill, North Carolina
Employment in the Raleigh-Durham-Cary area grew by 2.0% over the last twelve months or nearly 15,000 jobs. According to the North Carolina Employment Securities Commission, the unemployment rate continues to improve and is 4.1% currently.

According to the Research Triangle Regional Partnership, the Triangle is gaining jobs at a significant pace, with most of the growth occurring in the high-skill sector. While the rate of job losses in textiles has declined, jobs increased in higher education and medical and surgical hospitals, computer systems design and pharmaceuticals.

Employment / Economic Announcements

• Spherion Corp., which formerly provided staffing services to IBM, cut all of its 163 employees at its offices in Raleigh and Durham.
• Datatrial, a British data management company, will hire 150 employees with the opening of its North American headquarters in Raleigh.
• Art.com, an online retailer of posters, has been purchased by AllPosters.com. As part of the deal, its facilities in Raleigh will be shut down and result in a loss of 150 jobs.
• Hospira, a manufacturer of hospital products, will add 150 new jobs with the $15 million expansion of its Clayton facility.
• GlaxoSmithKline, a London pharmaceutical company, cut 125 positions at its Triangle operations in February.
• Nomacorc, a wine cork manufacturer, is planning to create more than 100 new jobs with the expansion of its Zebulon production plant.
• Blue Cross and Blue Shield of North Carolina, a health care services company, will add 100 jobs and build a new facility in Durham by the end of 2005.
• Burt’s Bees, a manufacturer of natural personal care products, plans to create about 50 new positions in 2005 to keep up with growing demand for its products line.

RDU-Chapel Hill Market Summary
The vacancy rate improved to 9.8% in July, a step up when compared to 10.4% one year ago. Strong demand and a low number of completions over the past two years have contributed to the improving vacancy rates. There were 2,090 units absorbed over the past twelve months and 1,729 units completed over the same time period.

There are currently 3,152 units under construction and an additional 3,201 units proposed in the Triangle. The Durham-South submarket continues to be the most active submarket with 716 units under construction. The Raleigh market (Wake County) continues to outperform the rest of the market with a current vacancy rate of 8.4%, versus 14.4% in Chapel Hill and 11.3% in Durham. The Raleigh-Southwest submarket reported the lowest vacancy rate in the area at 6.6%, with Raleigh-Northwest not far behind at 6.9% currently.

The average rental rate in the Triangle market is $700. One bedroom rents average $602 per month. Two bedroom rents are $721 and three bedroom rents are $931. Beginning in 2004, rental rate concessions (when quantified on a monthly discount) are factored into the rental rate averages to give a more accurate trend of rental rates. Existing apartments increased their rents $8.00 over the past six months, which is the first rent increase since July of 2003.

Based on the current development pipeline, the vacancy rates should hold around 9% to 10% through 2006. Rental rates should continue to increase as the use of concessions decrease.

  Market Data Information Source: © Sept-05 Real Data Aptindex