28th Annual Triangle Commercial Real Estate Conference

At last year's conference, NAI Carolantic predicted that 2012 would be another year of positive absorption and rental rates would hit bottom. They were correct once again and reported declining vacancy in all product types with the exception of two geographic submarkets. "Overall the commercial real estate market is performing well with continued room for upward growth," said Jimmy Barnes, SIOR, President of NAI Carolantic. That was the message to more than 1,700 business and community leaders who gathered at Raleigh's PNC Arena Tuesday for the 28th Annual Triangle Commercial Real Estate Conference hosted by NAI Carolantic Realty. The Conference is considered the authoritative "state of the market" report on the Triangle's real estate sector and health of the region's overall economy.

In keeping with NAI Carolantic's theme, Transformed by Technology, Steve Stroud, SIOR, Chairman of NAI Carolantic, welcomed attendees and asked everyone to scan a QR code on their program to answer five, business-related questions. The results were shown 30 minutes later by Barnes.

Stroud said when NAI Carolantic held its first Conference 28 years ago, reliable property and market information was difficult to acquire. "We made a decision to share our information with the public and local officials to enable them to make informed decisions. Today, despite living in a technology-driven era, we stay focused on the fact that real estate is still a local, relationship business."

Following Stroud's comments, he introduced Governor Pat McCrory who spoke a few minutes about his administration's focus.

Barnes took center stage after the Governor providing the results of the survey taken earlier by attendees:

1. Are you optimistic about the future growth of the Research Triangle Region? 97% said yes.
2. Do you plan on hiring more employees in 2013? 59.26% said yes.
3. Are you considering expanding or relocating your business in 2013? 43.12% said yes.
4. What keeps you up at night? The greatest concern was finding skilled workers, followed by increased taxes and health care expenses. The national deficit and ensuring profitability were last.
   
5. What issue should be addressed first by Governor McCrory? 75.23% said Economic Development, followed by Education at 19.27%, and corporate taxes at 5.5%

Barnes then proceeded to review the past year's commercial real estate landscape and offered NAI Carolantic's forecast for 2013. "National investors are still interested in the Triangle Region for holdings as global metropolitan cities are still hard to penetrate. We expect a continued increase in investments in second tier cities led by apartment buyers, although the retail market has seen a year-end flurry. Well located residential land prices will move upward and existing lot prices level off as national builders get better returns from raw land. Overall, the commercial real estate market is performing well," said Barnes.

NAI Carolantic's survey and analysis showed that, in a market of almost 246 million square feet of office, multipurpose and shopping center space, nearly 29 million square feet remained vacant at year-end. "Vacancy decreased in the office and multipurpose sectors, and dropped one point in the shopping center market. Absorption improved in 2012 and we expect minimal construction starts in the first quarter of 2013. The apartment market continues to be on fire with vacancy dropping to 5.5%. This is the lowest level since 1998," said Barnes.

Following Barnes's presentation, he introduced invited guest speaker Dr. Peter Linneman, NAI Global economist, CEO of the American Land Funds as well as the founding principal of Linneman Associates. He is Professor Emeritus of Real Estate at the Wharton School of Business, the University of Pennsylvania where he served for 32 years. He holds both Masters and Doctorate degrees in Economics from the University of Chicago. The third edition of his book, Real Estate Finance and Investments: Risks and Opportunities, has been adopted at over 80 leading universities. His quarterly report called The Linneman Letter forecasts employment growth and examines how macroeconomic factors influence real estate markets.

Linneman provided insight into the national economy's recovery process, as well as offered his outlook for 2013. Outlining his view of the economy, Dr. Linneman simply stated, "The US recovery continues to underperform, being mediocre for a great country."

Annual Triangle Commercial Real Estate Conference

Dr. Peter Linneman

Since 1985, NAI Carolantic Realty, Inc. has continued to conduct the most comprehensive Triangle-wide Commercial Real Estate Survey. All aspects of the market are researched, and we present our findings to over 1,500 business leaders at our Annual Triangle Commercial Real Estate Conference held at the beginning of each year. Business professionals throughout the Triangle are provided with in-depth facts and figures on the current and future state of the market. Data is collected on office buildings, retail space, business parks, and industrial space. We track and publish data covering in excess of 232 million square feet of floor space from over 6,600+ buildings located throughout the Triangle. Existing space, vacancy rates, absorption, new construction, and planned construction are researched.

NAI Carolantic's Real Estate Conference further emphasizes the firm's position, knowledge, and experience in the marketplace. We believe this collection of data provides us with information pertinent to a successful strategy for the disposition of assets owned or controlled by our clients

General Marketing:

Our experienced Marketing Department designs and produces most marketing materials in-house. This enables us to develop and implement timely and effective marketing mediums, custom designed for the most effective and innovative effort possible. Continual contact between broker, client and the marketing department assures that we reach the targeted end users. By utilizing proven, effective and appropriate methods, we aggressively market the positive aspects specific to a property.

Upon listing a property, NAI Carolantic Realty undertakes various marketing approaches depending on the property and specific needs of the owner while keeping costs as low as possible. At our expense, we install our general sign, create a two-page, 4-color flier, list the property on our website and other databases (local and national), and promote the property to the brokerage community as well as economic development officials. Personal contact with potential tenants and buyers is an important component to any successful marketing campaign as is regular owner reporting.

Kerry Saunders
Vice President & Marketing Director
ksaunders@naicarolantic.com

A part of the NAI Carolantic team since 1987, Ms. Saunders directs all aspects of marketing, research, and business development for the Company. She oversees the production of NAI Carolantic's Annual Triangle Commercial Real Estate Conference, including the compilation of the real estate data, and production of the final report and DVD to our clients and the community.

Ms. Saunders' initial responsibilities with NAI Carolantic in 1987 included research and marketing, as well as directing the Annual Triangle Commercial Real Estate Conference. Upon obtaining her real estate license, she joined the leasing staff to arrange for the lease and/or sale of commercial properties. This experience in successfully closing real estate transactions has been valuable in her transition back in-house to assume expanded responsibilities as NAI Carolantic's Marketing Director.

Prior to joining NAI Carolantic, Ms. Saunders recruited industry to a large metropolitan area for several years as the Assistant Manager of Economic Development at the city's Chamber of Commerce.

Awards:
2010 William P. Eyerman Award, for significant impact within the commercial real estate industry. Presented by the Triangle Commercial Association of Realtors at the 2010 Frontier Awards.

2009 Best Professional Commercial Real Estate Service Award, presented at the Champion Awards sponsored by Triangle Commercial Real Estate Women.

1999 Women in Business Award, presented by the Triangle Business Journal

1999 Woman of the Year Award, presented at the Champion Awards sponsored by Triangle Commercial Real Estate Women (TCREW)

Education:
Awarded a BS in Journalism, Public Relations from the University of Florida, Gainesville, FL.

Susan Fulton
Assistant Marketing Director
sfulton@naicarolantic.com

As Assistant Marketing Director for the Marketing & Research Department, Ms. Fulton assists in preparing marketing proposals, performs research in the field, manages the listing database, and performs other marketing-related projects as needed. In addition, she assists the brokers and staff in solving general computer-related problems. Prior to joining NAI Carolantic, Ms. Fulton worked as an inside sales representative for a manufacturer of safety equipment.

Awards:
2002 Administrative Service Award presented at the Champion Awards sponsored by Triangle Commercial Real Estate Women.

Education:
Graduated cum laude from the State University of New York at Buffalo with a degree in English.

2013 Market Report Graphs

2013 Forecast
2013 Corporate Sponsors

2013 Dr. Linneman's presentation

Dr. Linneman Letter,
Condensed
Market Research Links

Raleigh Overview

Durham Overview