The Lewis Group/CORFAC International Represented the Buyer of a Raleigh Commercial Building and Lease to McCormick Paints

Raleigh, NC (October 21, 2015)W. Michael (Mike) Lewis, CCIM, SIOR and Principal of The Lewis Group/CORFAC International announced the sale of a 4,445-square-foot commercial building located in the Hillsborough Street and Western Blvd. corridor in Raleigh and the immediate five-year lease of the property to McCormick Paints.

Lewis represented a local investor and the buyer in the transaction, WooDaddy LLC. The seller was Fred’s Beds, which operated a mattress sales and showroom at the location – 5521 Western Blvd., for many years. The sale price was not disclosed. However, the deal included a yellow, 1999 Volkswagen Beetle that was almost always parked in front of the mattress store and seen by thousands of Raleigh and Cary residents driving by on Western Blvd.

McCormick Paints was referred to Lewis by Brian Coakley, SIOR and a Senior Vice President with Donahoe Real Estate Services/CORFAC International, which has offices in Washington, DC, Tysons Corner, VA and Silver Spring, MD.

McCormick Paints is a family owned business that was incorporated in 1960 and is based in Rockville, MD. The Raleigh store will be the company’s 29th retail outlet when it opens. All of the stores are in the Mid-Atlantic States of Maryland, Delaware, Virginia and now North Carolina.

The new Raleigh location will undergo tenant improvements and should be ready for occupancy in late 2015 or early 2016.

Donohoe Real Estate Services/CORFAC International has exclusively represented McCormick Paints for all of its stores for over 20 years,” said Brian Coakley. “Our membership with CORFAC International has been key in helping us to assist McCormick Paints with their expansion beyond the Baltimore/Washington area. This is the company’s third store outside the region. We worked with another CORFAC affiliate, Porter Realty/CORFAC International in Richmond, VA to open two stores in that market over the last 18 months.”

About CORFAC International

CORFAC International is comprised of privately held entrepreneurial firms with expertise in office, industrial and retail, tenant and landlord representation, investment sales, multifamily, self-storage, acquisitions and dispositions, property management and corporate services. Chicago, IL-based CORFAC has 48 offices in the U.S., 7 in Canada and 24 offices internationally. Founded in 1989, CORFAC firms completed (in 2014) more than 10,000 lease and sales transactions totaling 400 million square feet of space valued in excess of $7.4 billion. For more information on the CORFAC network, call the Chicago headquarters at 224.257.4400 or visit

Retail Real Estate and Industrial Real Estate Benefitting from The Triangle’s Population Growth

While the office market it a little tricky to predict in terms of occupancy (other than the obvious factor – jobs) because there are too many variables, retail real estate and industrial real estate occupancy is more of a numbers game. Namely, head count. As in people. The more people there are, more stuff is going to be sold at the retail level. The more stuff sold in stores, the greater the demand becomes for warehouse buildings and distribution facilities. And so on.

This is not to say that retail and industrial real estate developers are guilt-free of over-building retail and industrial real estate from time-to-time, because they do. Yet short and long-term trends are for the Raleigh Triangle to keep growing at a similar pace to our growth in recent years.

Earlier this year (February) the Urban Institute projected population growth in the Raleigh area to grow by 50 percent between 2010 and 2030. Interested readers of this blog can view the entire report on UNC-Chapel Hill’s Carolina Demography Institute webpage:

Raleigh’s population grew by 8.9 percent from April 1, 2010 to July 1, 2014, according to U.S. Census data. During the same period, Durham County grew by 9.1 percent while Chapel Hill grow at a more historically average rate of 3.7 percent. The State of North Carolina grew 4.3 percent during that +four-year span.

Switching to local real estate market conditions, the overall retail vacancy rate declined in the second quarter to 4.6 percent — down from 4.9 percent at the close of the first quarter this year (all of this and the following data is from CoStar unless otherwise noted). The retail vacancy rate was 5.5 percent at the end of the third quarter last year. Net absorption was positive in 2Q2015 – 631,690 square feet. In the recent four quarters, net retail absorption in Raleigh-Durham was nearly 1.92 million square feet. This includes malls, power centers, specialty centers, shopping centers, general retail properties, strip centers and neighborhood centers. For a market with “only” 95 million square feet of total retail inventory, that’s a lot of net absorption in as year.

During the second quarter, 15 retail buildings totaling 358,121 square feet were brought to market in Raleigh-Durham.

Average rental rates for all product types ended the quarter at $14.55 per square foot, or $0.14 than they were at the end of March this year.

By comparison asking retail rental rates for ground-level space on Madison Avenue (yes, New York) averaged $1,700 a foot in May of this year, according to the Real Estate Board of New York, which is a relative bargain compared with Times Square between 42nd and 47th streets, which was running at $2,413 a foot.

I bet these interesting factoids have got you really wondering what the asking rate for ground floor retail is going for on 5th Avenue! Well here it is: between 49th and 59th Streets, the rate was $3,683 per square foot – a 4 percent increase from May 2014 to May 2015.

5th Avenue, New York City
5th Avenue, New York City

In our next blog, we’ll take a closer look at The Triangle’s industrial market conditions.