Across the country, warehousing vacancy rates are historically low, and lease prices are historically high. While this isn’t shocking in major hubs like Los Angeles/Long Beach and New York/New Jersey, it’s much less expected in states like North Carolina. In this article, we’ll take a look at North Carolina warehousing capacity and tell you why a more rural location may be right for your business.
North Carolina Warehousing Capacity in the Metro Areas
The story in the major metropolitan areas within North Carolina mirrors that in nearly every other metro area in the country, with low vacancy and high costs.
- In the Raleigh-Durham industrial real estate market, overall warehouse asking lease rates have risen (NNN; triple net) to $8.57 per square foot in Q3 2022 according to Colliers. The vacancy rate has declined to 1.8%.
- In the Charlotte industrial real estate market, overall warehouse asking lease rates have risen (NNN; triple net) to $7.77 per square foot in Q3 2022 according to Colliers. The vacancy rate has declined to 3.6%.
- The vacancy rate in the Greensboro/Winston-Salem market also continues to decline, and now sits at 2.8% in Q3 2022 according to Cushman & Wakefield.
What’s behind these historically low North Carolina warehouse vacancy rates?
The continued rise of eCommerce. The COVID-19 pandemic triggered an online buying boom that persists. This has led to companies taking on new warehousing at a frenzied pace to perform eCommerce fulfillment, which is a space- and labor-intensive operation that requires a large warehousing footprint.
Spillover from other major hubs. The battle for warehousing space has led companies to stray further out from their traditional territories. For example, Southeastern US locations like Savannah, GA, Norfolk, VA, and Charleston, SC have always been popular logistics destinations, but as available warehousing is gobbled up, companies have expanded their searches to other markets. Recent uncertainty with the West Coast port worker contract negotiations has also caused more companies to import into the East Coast instead of Los Angeles/Long Beach and Oakland.
The continued popularity of North Carolina. The Tar Heel State is no longer a best-kept secret among manufacturers and logisticians. It has been named the 2022 Top State for Business by CNBC, the 2020 State of the Year by Business Facilities, and ranked by Forbes as the Best State for Business several years in a row. North Carolina is home to a growing population and a relatively low cost of labor; it is centrally located on the East Coast; and the state continues to invest heavily in its logistics infrastructure. In light of these and other advantages, companies have been flocking here in recent years.
Rural North Carolina offers greater warehousing capacity
Outside of the major cities of North Carolina, there are more rural (but developing) areas that not only have more available space than the rest of the state, but also have room to expand.
The Eastern part of the state is especially ideal from a logistics perspective. One of the country’s busiest roadways, Interstate 95, runs right through Eastern NC, which marks the middle point between Boston and Miami. Eastern NC is now home to a major CSX intermodal rail hub (the Carolina Connector) and a growing manufacturing base in Rocky Mount. The region is also less than two hours from the major seaport at the Port of Virginia and close to the Port of Wilmington, NC.
Most importantly, warehouses in this part of the state have higher vacancy rates and lower costs than the metropolitan regions.
Partner with a 3PL provider for North Carolina warehousing capacity
The Eastern part of the state is also home to a thriving logistics industry, where 3PL providers like Kanban Logistics offer a range of services such as shared and dedicated warehousing and drayage services. By partnering with a 3PL in Eastern, NC, you’ll not only enjoy lower costs and greater warehouse capacity, you can realize the following benefits:
- 3PLs can secure labor in a hyper-competitive market
- 3PLs can reduce your logistics costs and preserve capital
- 3PLs help you avoid technology investments
- 3PLs can provide – or coordinate – multiple logistics services
- 3PLs offer value-added services such as rework and VMI
To learn more about the benefits of basing logistics operations in Eastern, NC, contact Kanban Logistics today.