Why Companies Are Choosing The Triangle

Why Companies Are Choosing The Triangle

My wife moved here three years ago and me following suit shortly one year after. Why? She got accepted into the #1 pharmacy school in the nation. (UNC Eshelman School of Pharmacy) The triangle of North Carolina (Raleigh, Durham, Chapel Hill) is known for its outstanding academics and therefore, good workers. Duke is ranked in the top ten, Chapel Hill following in the top thirty and NC State rounding out the top 100 (81). Not only do these colleges rank high in undergrad education but they also offer some of the best medical practices in the nation. Duke overall ranks number 17 and UNC is also in the rankings. With being such an educated market, it also means companies want to choose the triangle and the high IQ that is right in their backyard.

why do companies move to the triangle

There is also an excitement around the triangle of cities being rated as top places to live. Raleigh/Durham ranks #13 on the best places to live thanks to affordability and the job market created around a very green and active community that continues to produce more outside activities every year. For example, hop on the newly completed American Tobacco Trail and go from Apex all the way, 22.6 miles later through Cary, finishing in downtown Durham for some great food at the many local restaurants. Another reason the triangle is so special is the access to having it both ways in terms of outdoor activities. Mountains and beach are both within distance of a days trip. A drive to the beach is an accessible 130 miles and to the mountains in just over a couple hours for hiking, skiing, and adventure. During these drives stop along the way to compete in a plethora of events from half ironman triathlons to 100 mile bike races through the Appalachian Mountains near Asheville. Or you could just stop for a casual beer from one of the many towns that have their own breweries or wineries! With so many things to do it is no doubt that appreciation will keep rising in this area.

Appreciation has grown as much as 9 percent in Raleigh for commercial space into the year of 2018. Reasoning behind that would be because vacancies are below 5 percent and the market has absorbed 1.3 million sq. feet of commercial space in 2018. Durham is falling behind those numbers at 18 percent for vacancies and absorption is in the negative. Housing is following the same trend line with home prices from 2016 to 2017 rising 7.5 percent in Raleigh and only a 2 month supply of housing. These numbers are above the national average and continue to rise month by month.

These spaces are being filled up with tech, healthcare, and financial companies. Including the possibility and excitement of both Apple and Amazon. Amazon has announced that the triangle made the short list of 20 out of hundreds. Meaning that with the vacancies so low in Raleigh that the Durham market could soon turn for the better and close the gap in vacancies and absorption. Both cities are located close to a thriving airport that is adding more flights monthly from domestic to now international to help ease the travelers wanting to go to Europe.

With markets tightening up and driving up prices, you need a strong commercial team behind you when finding your next space. With over 40 years experience on the Kima Commercial team. Whether it is finding a space to fill or a lot to build on. Our rounded team can help you from start to finish.

To learn more about what’s happening in the commercial real estate world in the Raleigh, Durham and North Carolina markets do not hesitate to contact us at Kima Commercial, LLC.  Our team of Brokers, REALTORS® and staff are here to meet your real estate needs.

https://www.usnews.com/best-colleges/duke-university-2920
http://www.triangletrails.org/pdfs/OBSERVERMAP.pdf

We look forward to working with you!

What Am I Renting? – Load Factors and Loss Factors

What Am I Renting? – Load Factors and Loss Factors

The way commercial real estate is priced and leased is often misunderstood due to matters of rentable square footage. Below is a brief discussing of Load Factors and Loss Factors to provide some insight into these critical components of office leasing. It looks at the way load and loss factors affect both Landlords and Tenants which is particularly helpful as a matter of insight.

renting load factors loss factorsLoad and loss factors both refer to the amount of space that you pay for but don’t occupy as a part of your commercial real estate lease. As defined by BOMA standards, most multi-tenant buildings have a mixture of usable space, which is the area inside your walls, and common area space, which is the shared parts of your building’s interior. Your rentable space, which includes both types of space, is what you pay for. Load and loss factors are different ways of describing that additional space.

Load and Loss Factors

The load or loss factor is equal to the percentage that gets tacked on to your space to account for your pro-rata share of the common area space. To understand how it works, take a floor with these measurements, based on BOMA standards:

Gross Measured Area: 10,000 square feet (100×100 square from the inside of the building wall)

Vertical Penetrations: 250 square feet (elevator shafts and stairwells)

Rentable Area: 9,750 square feet (gross measured areas less vertical penetrations)

Floor Usable Area: 8,300 square feet (located inside demising walls of suites)

Floor Common Area: 1,450 square feet (hallways, elevator lobbies, restrooms, supply room)

The two names, load and loss, are interchangeable, as is “core” in some parts of the country. Which one you use depends on your perspective. You might think of yourself as paying for your share of the “core” of the building. On the other hand, the common area might be a “load” on top of your additional rent. To your landlord, the space is a “loss” relative to the more valuable usable space. BOMA Standards typically refer to “load” factor as the preferred term.

The terms load, loss and core are interchanageable and depend entirely on perspective. A landlord’s loss factor will not mean the same to you as a tenant. The building’s loss or load factor is equal to the common area divided by the usable area: 1450 divided by 8,300. This gives a load factor of 17.47%. This means that a tenant would pay their actual usable space plus 17.47%. If a tenant takes up half the floor – 4,150 usable square feet, they would pay for an additional 725 square feet of space for a total of 4,875 rentable square feet.

Another Loss Factor

Some landlords will incorrectly refer to their vertical penetrations as a loss factor. In that instance, the term is used to refer to lost space relative to the building’s actual gross measured area. This term pops up periodically and is a good reminder that just because terms have a technical meaning under BOMA standards or real estate law doesn’t mean that the correct meaning is always used.

What’s My Factor?

Calculating your load, loss or core factor can be challenging, especially given the newest updates to BOMA standards. The factor used to be calculated on a floor by floor basis. Relatively efficient spaces on higher floors had low load factors while ground floors with expansive lobbies had very high load factors. Since tenants wouldn’t absorb the cost of the load on all floors, landlords would be forced to reduce the load factor they applied and lose space. Newer BOMA standards measure load factors across an entire building, making everyone pay for the common areas.

On occasion, Landlords may change the load and loss factors when they get a new tenant. There are two ways to protect yourself against this. The first is to request a space and building measurement that is tantamount with BOMA standards. The second is to always work with a commercial real estate expert that can protect your interests against a “creative” landlord. Make the most of your usable space.

At Kima Commercial, we’d be honored at the opportunity to help you with any of your commercial needs – whether that be purchasing, leasing, selling, or answering any questions you have. Give us a call at (919) 336-1700 and let us know how our experienced commercial team can help!

We look forward to working with you!

Public Land Use Controls – How Your Project May Be Affected

Public Land Use Controls – How Your Project May Be Affected

 

Almost any commercial real estate project, large or small, may likely have Public Land Use Controls as a key component of successful navigation toward completion. Single Use Zoning, or Euclidean Zoning (taken from an early Supreme Court case involving the Village of Euclid, Ohio) has long been the basis of land use ordinances. In this type of land use control, areas of a jurisdiction are divided into residential, commercial, or industrial areas. These areas are known as zoning districts with each district having specific use guidelines and criteria for their development. Sometimes, navigating these guidelines can make or break the success of a project.

approved-29149_640The first step in navigating the zoning process is starting early in the development cycle to identify the implications of the subject zoning ordinance on the parcel or parcels of land contemplated to be developed or re-developed to a specific use. Your local zoning officer or planning staff member should be able to help get this process started by helping to identify the zoning district of the subject parcel, the permitted uses in that district, and the type of permit, if any, needed for the proposed use. Types of zoning permits include but are not limited to Special Use Permits, Conditional Use Permits, or simply a certificate of compliance that the subject land use in its current zoning district is allowed by right. Further, a developer may find themselves in a situation in which the proposed use is not allowed in the zoning district in which it is located. In this instance, the process of re-zoning a parcel of land may be the only option if the project is to go forward. Re-zoning a parcel is not to be taken lightly and will generally require a land-use attorney to become involved given the complexities of the process. These complexities include the nature of the zoning transition in the area, nearby uses, and public opinion toward the project. Such cases are usually heard by an elected body such as the City Council or Board of County Commissioners, depending on the jurisdiction. Their decision can often hinge on the matter of “Spot Zoning”.

Spot Zoning is the application of zoning to a specific parcel or parcels of land within a larger zoned area when the rezoning is usually at odds with a city’s master plan and current zoning restrictions. Spot zoning may be ruled invalid as an “arbitrary, capricious and unreasonable treatment” of a limited parcel of land by a local zoning ordinance. While zoning regulates the land use in whole districts, spot zoning makes unjustified exceptions for a parcel or parcels within a district.

The small size of the parcel is not the sole defining characteristic of a spot zone. Rather, the defining characteristic is the narrowness and unjustified nature of the benefit to the particular property owner, to the detriment of a general land use plan or public goals. The rezoning may provide unjustified special treatment that benefits a particular owner, while undermining the pre-existing rights and uses of adjacent property owners. This would be called an instance of spot zoning. On the other hand, a change in zoning for a small land area may not be a spot zone, if it is consistent with, and furthers the purposes of the general area plan.

When determining how zoning may affect your project, it is important to work directly with the local jurisdiction. Further, it may be of critical importance, in certain instances, to hire a land-use attorney to help navigate the process in order to increase the likelihood of the successful zoning of your project.

Please call us and let us know how we can assist you with any of your commercial real estate needs! From land to leasing to multi-family and commercial development – even design/build – we’d love the opportunity to help you with your commercial real estate needs!

Be sure to keep up with us on Facebook at Facebook.com/KimaCommercial to stay in the loop on what’s going on in the Raleigh/Durham area – and beyond – when it comes to commercial real estate, to see our featured listings and more! Call us today at (919) 336-1700!

 

<<< BACK TO BLOG

Keller Williams Preferred Realty, 7751 Brier Creek Parkway, Suite 100, Raleigh, NC

919-336-1700

Peter@KimaCommercial.com

We look forward to working with you!