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Record-setting rental rates come to fruition as the Raleigh skyline transforms
Trophy office space in The Triangle hit a record high, with asking rates of over $40.00 per square foot (psf) seen with recent developments. Tower IV at North Hills, set to deliver in the third quarter of 2020, has set an asking rate of $41.50 psf. Other new buildings delivering soon with similar asking rates include Raleigh Crossing, Hillsborough Street and Nash Square. The average asking rate in the downtown Raleigh submarket ended the third quarter at $32.07 psf, with overall market asking rate at $26.94 psf. Climbing rental rates reflect not only the rising demand of office space, but also the caliber of the growing metro area. Even as top-of-market rents are achieved, rising construction costs have given developers some pause, resulting in a shortage of new available space. This tightening of the market will bring on high preleasing demand and continued low availability (which currently sits at 13.6% for the market).