Raleigh Retail Market Report
Dynamic Demographic Trends Underpin Raleigh’s Retail Performance; New Buyers Entering Market
Residential growth bolsters robust retail sector. Raleigh ranks among the top five metros nationwide in terms of the percentage of population gain this year. Many people are moving into the region for employment opportunities and roughly 30,000 additional workers will be hired during 2019. Many of the jobs will be higher wage positions at tech companies such as Pendo, which has committed to creating nearly 600 jobs in downtown Raleigh over the next several years. The median household income is also forecast to rise at a faster pace than the U.S., contributing to the largest jump in retail sales in 20 years and benefiting local retailers. Even with deliveries ticking up in 2019, heavy pre-leasing activity will lessen the impact on vacancy. The largest development due is a 120,000-square-foot Wegmans in Raleigh, although the majority of projects are small multi-tenant centers with less than 15,000 square feet. Metrowide, the vacancy rate has remained below 4 percent for the past four years and it is expected to dip to a 12-year low by year end, producing a seventh consecutive year of rent growth.