July 26, 2024

Alamance County's Industrial Market: Q2 2024

- A Vibrant Hub of Growth & Opportunity

By Brian Alonso, Advisor

Alamance County's industrial market is experiencing a period of robust growth, driven by a powerful combination of factors. The national economy continues to hum along, fueling consumer demand and driving a surge in activity within the industrial sector. While the first quarter of 2024 saw a slight slowdown, the second quarter witnessed a strong rebound, with a substantial increase in net absorption and continued positive trends for the industry.

_{Source: CoStar 2024 Q2 Industrial Market Report}

The ripple effects of these national trends are felt acutely in Alamance County, where a vibrant economic landscape is attracting new businesses and fostering a robust demand for industrial space. Furthermore, the county is experiencing exciting developments in neighboring areas, which are creating opportunities for spillover growth in Alamance County.

National Trends: A Powerful Force

The national industrial market is currently experiencing a dynamic period, marked by a remarkable increase in net absorption - a clear indication of strong demand. This surge in demand is largely attributed to the continued rise of e-commerce. Consumers are increasingly relying on online shopping, and this shift has created a tremendous need for efficient warehousing and distribution facilities to manage the flow of goods and meet the demands of online shoppers.

The construction pipeline, however, is shrinking nationwide, with only 343 million square feet (msf) of industrial space currently under construction. This limited supply is poised to create a tighter market and further strengthen demand for existing properties in the coming quarters. This tightening supply dynamic is also expected to impact Alamance County, potentially creating a more competitive landscape for industrial space.

While asking rents across the US are still rising, the growth rate has slowed to 3.7% year-over-year (YOY), the lowest since 2020. This moderation in rent growth signals a potential plateau in the national market. However, it's important to note that Alamance County, due to its own local growth factors, may experience a more pronounced upward trend in rents.

Alamance County: A Regional Hub of Growth and Opportunity

Alamance County, strategically positioned within North Carolina's thriving economic landscape, is experiencing its own unique growth story, further enhancing its position as a major industrial hub. While the county itself is experiencing steady growth, a number of projects in neighboring counties are creating opportunities for spillover growth in Alamance County:

• Ionna, LLC in Durham County: This company's investment of $10 million in Durham County, adding 203 jobs to build electric vehicle charging stations, is a sign of the growing EV industry. This project could attract more businesses related to the automotive sector to the region, potentially creating new opportunities for industrial development in Alamance County.
• Innovative Construction Group in Chatham County: This company's $39.8 million investment, adding 157 jobs for construction design and off-site manufacturing, is a testament to the state's thriving construction sector. This project could spark further development of industrial parks and manufacturing facilities in surrounding counties, including Alamance, as businesses supporting the construction industry seek space.
• Clearly Clean Products in Guilford County: This company's $24.9 million investment in Guilford County, adding 80 jobs for food packaging manufacturing, shows a growing focus on the food industry. This project could attract more food processing and distribution businesses to the region, creating new demand for industrial space in Alamance County.

These large-scale projects are driving a significant increase in demand for industrial space in the region, further tightening the market and potentially pushing rent rates upward. This positive economic activity is likely to create new opportunities for businesses operating within the Alamance County industrial sector.

_{Source: Economic Development Partnership of NC}

The Future: A Promising Outlook for Alamance County

The future of the Alamance County industrial market appears bright. The county's strategic location, strong economy, and thriving manufacturing sector make it an attractive destination for businesses seeking industrial space. This combination of factors will likely drive continued growth in the market, leading to increased demand, potentially higher rents, and an overall positive outlook for the industry.

Key factors to watch in the coming months include:

• Continued Impact of National Trends: The industrial market in Alamance County will be closely tied to national economic trends. The continued strength of the national economy and consumer spending will likely drive further growth in the market.
• The Construction Pipeline: The limited supply of new construction nationwide and in Alamance County, will likely create a tighter market, potentially pushing up rents and property values.
• Local Economic Development: Alamance County's ongoing efforts to attract new businesses and industries will continue to stimulate demand for industrial space.

The Spillover Effect: The growth in neighboring counties, fueled by projects like the Ionna, Innovative Construction Group, and Clearly Clean Products initiatives, will likely drive demand for industrial space in Alamance County as supporting businesses seek to establish a presence.

Conclusion

The Alamance County industrial market is currently experiencing a dynamic period of growth, with strong fundamentals, positive economic indicators, and significant local investment fueling the market. This makes it a promising area for those seeking to invest in or operate within the industrial sector. As the national trends continue to favor the industrial market, Alamance County is well-positioned to capitalize on this growth and solidify its position as a major industrial hub in the region. The county's strategic location, combined with its business-friendly environment and a strong workforce, will likely continue to attract new investments and foster economic prosperity for years to come.