ECONOMIC DEVELOPMENT REPORTDOWNTOWN RALEIGH

FIRST QUARTER 2015

The Downtown Raleigh Alliance produced this quarterly report. The Alliance is an award-winning nonprofit organization whose
mission is to continue to revitalize Raleighs downtown by enhancing its quality of life and contributing to its economic success (For more information, visit www.youRhere.com). The City of Raleigh is a key partner of the DRA in its economic development efforts to revitalize downtown. DRA receives a grant from the city to enhance its tax base by generating new jobs, supporting existing businesses, and attracting new businessesin particular storefront businesses.
For questions concerning this report, please email billking@downtownraleigh.org.

1st QUARTER 2015

Economic Development Report Downtown Raleigh

TABLE OF CONTENTS
ECONOMIC DEVELOPMENT REPORT
Highlights..................................................................................... 1
Real Estate & Population Snapshot .......................................... 2
Historic Trends ............................................................................ 3
First Quarter 2015 Street-Level Business Activity .................... 4
Development in the Planning Stages ........................................ 5
Development Under Construction ............................................. 5
Food/Beverage Sales Tax Revenue........................................... 6

Disclaimer The information contained herein has been obtained from sources deemed to be reliable. While we do not doubt
its accuracy, we have not verified it and make no guarantee, warranty, or representation about it.

1st QUARTER 2015

Economic Development ReportDowntown Raleigh

ECONOMIC DEVELOPMENT REPORT

HIGHLIGHTS
Downtowns first quarter saw new street-level businesses open, more major construction projects, and several new
buildings completed or near completion. 9 street-level businesses opened in the fourth quarter this year ranging
from services to soft goods to restaurants and bars. Construction continued on major construction projects such as
SkyHouse, Charter Square, the L, the Lincoln, Link Apartments, the Edison, and others. SkyHouse has just been
completed as of early second quarter 2015, adding 323 residential units to downtown. Several other projects were
completed in the first quarter, including McClatchy Interactives renovation/expansion of a 30,000 square foot
space, while Glenwood South added the 37,000 sf Carolina Ale House and Four25 Devons new 261 unit apartment building. In total, Downtown Raleigh has $272.9 million in current construction in the municipal services district (MSD) totaling 1,595,552 square feet and with 1,840 residential units under construction or recently completed. Including under construction and just completed projects, 3,362,466 square feet of space will be added in the
near future to downtown Raleigh.

Announcements
The Downtown Experience Plan is
open for a final round of public
comments until May 13th. The
plan seeks to add green space,
activate streets, improve retail,
increase walkability, add density,
and continue to grow downtown
Raleigh. Details and renderings
can be found at http://
www.raleighnc.gov/business/
content/PlanUrbanDesign/
Articles/DowntownPlan.html

Construction Boom
Over $677.8 million in projects
are currently under/recently
completed construction ($385
million) or in planning ($292.8
million). Several more major
projects are expected to be
announced in 2015. Each district
of downtown has projects under
construction or planned.

Office Market
Construction of the 242,000 sf,
Class A office tower, Charter
Square, was halted for a few
weeks by a tragic accident on
March 23rd. DRA expresses its
deepest condolences to those
lives lost.
Office vacancy was 7.7% (Source:

JLL) for the first quarter in

downtown for Class A and Class B
office space. New projects like
117 Fayettevilles extensive
renovation and Charter Square,
will help address the high demand
for office space in downtown.

Retail & Storefront Market

During the first quarter, at least 9
new street-level businesses
opened in downtownincluding
restaurants, a fitness center, bars,
and a tshirt/clothing shop. At
least 10 new street-level
businesses have been announced
and are expected to open during
the next six months including an
ice cream shop, beer garden,
restaurants, and a new three-story
concept from James Beard award
winner, Ashley Christensen.
Since 2010, downtowns retail
base has increased by 35% and
restaurants by 19%.
Our analysis of recent retail
vacancies show an average asking
rent of $18 per square foot. With
a range from $16-$25 per square
foot for most vacancies for lease.

storefronts are currently available.

With new construction, though,
more supply will be coming online
throughout 2015.

Residential Market
Four25 Devon finished
construction at the end of 2014 to
bring 261 new units to downtown.
There are nine residential projects
under construction, most of which
are expected to be completed in
2015 and will bring many new
residents to downtown. SkyHouse
opened in mid April and brings
323 more units to downtown.
Currently, 1,236 units are under
construction with over 300 more
units planned in the near future.
The overwhelming majority of
these projects is for apartment/
rental units.

Dining & Hospitality Market

Food and beverage tax collections
were up 3% in 2015 in the first
quarter for downtown Raleigh
versus the first quarter of 2014
In total, there a re 177
restaurants, cafes, and bars/
clubs/lounges in the MSD.

Downtown storefront vacancy

continues to be very tight, as few
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1st QUARTER 2015

Economic Development Report Downtown Raleigh

REAL ESTATE & POPULATION SNAPSHOT

REAL PROPERTY SQUARE FOOTAGE WITHIN THE MSD
Existing Space

Square Feet

Commercial Office
Retail
Governmental Office/Other
Residential
Other (Education, Religious, etc.)

6,989,335
1,375,707
6,964,275
3,331,939
5,305,977

Total Existing Space

23,966,900

Under Construction/Planned Space

Residential
Commercial Office
Retail
Government/Other

3,081,600
357,598
147,829
26,000

Total Under Construction and Planned Space

3,613,560

DOWNTOWN HOTEL ROOMS

Existing Rooms

1,136

Planned

140

RESIDENTIAL UNITS
Existing Units Inside Downtown
Planned and Under Construction (P & UC) Residential Units
Combined Existing, P & UC Units

2,811
1,840
4,651

P = Planned, UC = Under Construction, A = Announced

POPULATION DESCRIPTIVE STATISTICS*

Residents Within the MSD
Residents Estimated Within Downtown (2014)
Residents Within 1-mile Radius of Downtown Center Point
Average Household Income Within 1-mile Radius of Downtown
Housing Units Within 1-mile Radius
Average Household Size Within 1-mile Radius
% of Residents Within 1-mile Radius With Bachelors Degree or Higher

5,975
(Approx) 7,800
14,964
$50,717
6,858
1.80
40%

Sources: DRA Internal Tracking, Karnes, ESRI Business Analyst projections, U.S. Census
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1st QUARTER 2015

Economic Development ReportDowntown Raleigh

HISTORICAL TRENDS

2009

Street-Level Business Openings

Street-Level Business Closings

2010

39
24

54
26

91.6%

89.6%

New Projects Announced

Public Investment (millions)

3
$2.6

2
$0

Private Investment (millions)

$54

Projects Completed
Public Investment (millions)
Private Investment (millions)

10
$39.3
$139.9

Year-End Office Occupancy

2011
41
26

2012

2013

2015

31
15

36
16

9
3

89.9% 89.2% 93.3%

89.9%

92.3%

5
$0

38
17

2014

6
$75

4
$187

4
$0

1
N/A

$9.6 $106.5 $117.5

$351

$133

N/A

3
$2.5
$7.4

8
$88
$156

5
$0
$115

1
$0
$60

5
0
$22.3

5
$130
$29.8

Street-level openings and closings (2007-2014)

60
50
40
30
20

10
0
2007

2008

2009

2010

Number of closings

2011

2012

2013

2014

Number of openings

Sources: DRA internal tracking, Karnes

3

1st QUARTER 2015

Economic Development ReportDowntown Raleigh

1st QUARTER 2015 STREET-LEVEL BUSINESS ACTIVITY

Business Openings:
1.
2.
3.
4.
5.
6.
7.
8.
9.
.

Name

Type

Carolina Ale House

The Twisted Mango
Anchor Bar
Level Up Kitchen and Barcadium
Circa 1888
Gallo Pelon Mezcaleria
MADabolic
Pho Pho Pho Noodle Kitchen and Bar
House of Swank

Restaurant
Restaurant
Bar
Restaurant/Bar
Bar
Bar
Fitness
Restaurant
Clothing

Business Closings:
1. Aiko Bar and Lounge
2. Nutrafit
3. Cimos

Restaurant
Health services and products
Gifts and books

Sources: DRA internal tracking,

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1st QUARTER 2015

Economic Development Downtown Raleigh

DOWNTOWN RALEIGH DEVELOPMENT INVESTMENT

Project Name

Investment

Project Type

Sq. Ft.

Res.
Units

District

UNDER CONSTRUCTION
Elan City Center Apartments

30,000,000

Apartments

Not available

213

Capital

Peace Street Townes

5,000,000

Townhomes

20,000

17

Capital

200 S. Salisbury (Death and Taxes)

3,000,000

Mixed Use

10,903

n/a

Fayetteville Street

227 Fayetteville St.

8,000,000

Office

101,439

n/a

Fayetteville Street

Boylan Pearce Bldg.

5,500,000

Mixed Use

31,820

Fayetteville Street

Charter Square

63,000,000

Office

243,379

n/a

Fayetteville Street

Link Apartments

30,000,000

Apartments

276,119

203

Glenwood South

The L

17,000,000

Apartments

110,000

83

Fayetteville Street

The Lincoln

35,000,000

Apartments

318,000

224

Fayetteville Street

Edison Apartments

40,000,000

Apartments

290,000

239

Moore Square

Blount St. Commons

8,000,000

Townhomes

Not available

46

Capital

The Ten at South Person

2,400,000

Townhomes

16,824

10

Moore Square

The Gramercy

30,000,000

Apartments

168,398

203

Glenwood South

Raleigh Beer Garden

2,000,000

Bar

8,670

n/a

Glenwood South

TOTAL UNDER CONSTRUCTION

$ 278,900,000

1,595,552

1,236

PLANNED
Residence Inn by Marriott

20,000,000

Hotel

150,000

145
rooms

Fayetteville St.

220 The Saint

West Apartments
West Apartments II
Edison Office
Moore Square renovation
Union Station

$
$
$
$
$
$

7,000,000
20,000,000
25,000,000
80,000,000
12,000,000
79,800,000

Apartments
Apartments
Apartments
Office
Park
Transportation

66,000
270,000
286,480
315,000
n/a
26,000

17
153
170
n/a
n/a
n/a

Glenwood South
Glenwood South
Glenwood South
Moore Square
Moore Square
Warehouse

Exchange and Market Plazas renovation

Peace St./Wade Ave/Capital Blvd
bridges/interchanges
Moore Square Transit Center renovation

2,000,000

Civic Space

n/a

n/a

Fayetteville St.

40,000,000

Infrastructure

n/a

n/a

Capital

7,000,000

Infrastructure

n/a

n/a

Moore Square

Peace Street street scape project

2,000,000

Infrastructure

n/a

n/a

Glenwood South

Office

30,000

n/a

Warehouse

1,143,480

485

HQ Raleigh expansion

TOTAL PLANNED
PLANNED + UNDER CONSTRUCTION

Not announced

$ 292,800,000
$ 571, 700,000

RECEENTLY COMPLETED
SkyHouse Raleigh
Four25 Devon
Carolina Ale House
McClatchy Interactive office renovation/
expansion

TOTAL DELIVERED

$
$
$

60,000,000
Apartments
35,000,000 Mixed Use/residential
7,500,000
Dining & Bar

358,986
227,400
37,048

320
261
n/a

Moore Square
Glenwood South
Glenwood South

3,600,000

30,000

n/a

Fayetteville Street

653,434

581

$ 106,100,000

Office

Sources: DRA internal tracking

6

1st QUARTER 2015

Economic Development ReportDowntown Raleigh

1st QUARTER 2015 SALES TAX REVENUE FROM FOOD AND BEVERAGE ESTABLISHMENTS
At the end of the 1st quarter, sales tax revenue generated by food and beverage establishments
in downtown Raleigh is up 3% in 2015 over first quarter of 2014.

Food/Beverage Tax Revenue (YTD 2015 vs. 2014)

$430,000.00
$420,000.00

$410,000.00
$400,000.00

$390,000.00
$380,000.00

$370,000.00
$360,000.00
$350,000.00
2014 1st Q

2015 1st Q

Sources: Wake County Tax Assessor

6