Rapid Growth in Raleigh-Durham
- May 29, 2017
Raleigh-Durham, a technology hub and educational hotspot, has a booming rental market. Local universities have produced highly educated workers, and the metro’s low cost of living and temperate climate draw young professionals from all over the nation. The combination of job and population growth has generated a strong demand for apartments, with average rents reaching $1,075.
Raleigh-Durham added roughly 20,000 jobs in 2016. Businesses are drawn to various incentives the Research Triangle provides, including the Business Investment Grant (BIG) that ensures cash grants to new and existing businesses. A handful of companies expanded operations in downtown Raleigh, including California-based Distil Networks. Nevertheless, the controversial “Bathroom Bill” played a negative role last year, pushing firms such as PayPal elsewhere. The bill was recently repealed, though.
The metro continues to appeal to investors who are being priced out or struggling to find high acquisition yields in major markets. The overall performance of the apartment sector is strong. Supply has kept up with demand, though that might be difficult going forward, as the current pipeline consists of more than 26,000 units in various stages of development. Looking forward, we expect a moderate rent growth of 4.2 percent in 2017.
Read the full Yardi Matrix report.