One Hot Market: Raleigh Moves from Good to Great

Affluent areas lay nestled in North Carolina’s booming capital.

By Lisa Bertagnoli, Contributing Editor -- Chain Leader, 4/1/2007

This is the year for Raleigh, a city of 341,000 situated in North Carolina’s upper northeast quadrant. In February, Forbes magazine named Raleigh, North Carolina’s capital, the No. 1 job market in the country, an honor due mostly to Research Triangle Park, the world’s largest high-tech research center. Money magazine placed Raleigh fourth on its list of the best big cities in which to live. A reasonable cost of living, clement weather and access to good education landed the city on that list.

Raleigh, like most big cities, has its neighborhoods, and of them, North Raleigh is one of the most desirable. North Raleigh, just north of Interstate 440, the “beltline” that runs around the city, in-cludes ZIP code 27614. That ZIP code is the state’s second wealthiest area, after Myers Park in Charlotte.

Household incomes in 27614 average $145,000 and disposable income, almost $100,000, according to ESRI, a Redlands, Calif.-based demographics research firm. The average home value is $378,475. By contrast, the median home price for all of Raleigh in 2005 was $177,200 and household income was $46,612.

Restaurant Ready

All this makes North Raleigh prime expansion ground for restaurants. “From a merchant category, that’s where the interest is,” says Steve Brown, vice president and director of leasing for Kane Realty Corp., a Raleigh-based commercial real-estate and development firm. Kane’s properties include North Hills, a 1.3-million-square-foot mixed-used development in North Raleigh.

Rents per square foot for restaurants average in the mid to upper $20s, but can extend into the $30 range, Brown says. And the market is competitive: “The good spaces go fast,” he says.

More operator perspectives on North Raleigh.