- Class A Product Excels:
Class A products accounted for 86.9% of all new leasing activity, indicating a flight to quality for premier spaces.
- Rental Rates Decrease:
Rental rates experienced a small decrease to $29.81 psf in the second quarter, but rates are expected to increase in the second half of 2023 as new supply delivers.
- Robust Construction Pipeline:
While no new product completed in Q2, more than 1.7 msf of new construction is expected to deliver in the second half of 2023.
- RTP/I-40 Corridor Drove Absorption:
RTP/I-40 Corridor boasted strong absorption with almost 100,000 sf of occupancy gains, offsetting move-outs in other submarkets. However, net absorption for the overall market remained in the red with -104,000 sf for the quarter.
- Sublease Opportunities Drive Vacancy:
Direct vacancy rates increased modestly, rising by 10 basis points QOQ to 13.4%, while sublease opportunities now represent 35.1% of all vacant spaces in the market.