News

Feb 25, 2008
Office space in demand
By Jack Hagel, News & Observer

New and expanding companies continue to fill buildings in western Wake County:

* Ply Gem Industries, which said in October that it was moving its headquarters to Cary, has agreed to lease about 20,000 square feet at Weston II, an 80,000-square-foot office building being developed by Capital Associates. Ply Gem was offered about $200,000 in state and municipal economic incentives to move from Kearney, Mo. It expects to eventually have 100 employees locally. Weston II opens in May.

* SciQuest, agreed to expand by about 50 percent at 6501 Weston Parkway. The software company, which had been leasing about 21,000 square feet, agreed to take an additional 8,000 square feet for now, and another 3,000 square feet when another tenant moves out.

Companies have flocked to Cary in recent years because of its location -- central to the region, close to the airport and Interstate 40 and near plentiful housing.

About 8 percent of Cary's 4.1 million square feet of leasable offices were empty at the end of the year, according to Karnes Research of Raleigh. That's down from 14.1 percent two years ago.

Average rents have surged 8 percent to $19.90 per square foot during the period.

Developers are building another 300,000 square feet and proposing 2 million square feet more.

Across the town line, at Morrisville's Perimeter Park:

* Array BioFarma, a Colorado company developing cancer treatments, leased about 20,000 square feet at Duke Realty's Perimeter One. The company has an option to double its space in the building.

* Defense contractor Northrop Grumman agreed to take 30,000 square feet in Perimeter One.

The tenants are to move in the summer, joining Duke, Vicious Cycle Software and Progress Software to make the 204,000-square-foot building at least 60 percent occupied.

That's a speedy lease-up, especially considering that more than one-fifth of the 9.3 million square feet of offices in the Research Triangle Park submarket are empty, Karnes data show.

Duke, an Indianapolis real estate investment trust, expected the building to be less than one-quarter leased at the end of 2007.

The company's local chief, Jeff Sheehan, says tenants have been attracted to the building's 40,000-square-foot floors. That's bigger than those in most suburban offices in the region, offering companies the ability to house more departments on one floor and improve their efficiency.

Duke Realty's 2.5 million-square-foot Triangle office portfolio was 99 percent occupied at the end of December, up from 98 percent at the end of 2006.