G1. What markets compete with Raleigh as a destination/convention market?
Louisville, Pittsburgh, Providence, Tampa, Austin, as well as big box hotels like Gaylord Nashville, Atlanta Hyatt, and Charlotte Westin, for example.
For more specific details on comp set analysis, see the Hotel Refresh Study document link in the Hotel RFI.
G2. What is the downtown hotel occupancy rate and average daily rate?
The current year-to-date numbers through April 2022 per STR for downtown are as follows: Occupancy 55.3%, ADR $167.63. RevPAR $92.65. Occupancy is up 95%, ADR 50% and RevPAR 194%.
G3. How is the market performing in terms of office and residential fundamentals?
- The office market has accelerated in downtown over the past three years and has added more than 1.5 million square feet since 2015 with two new class A towers completed recently with 301 Hillsborough at Raleigh Crossing and 421 N. Harrington adding more than 500,000 square feet of new space to downtown since fall 2021. Currently, 161,410 square feet of office space is under construction with 1.7 million square feet of space planned. Prior to the pandemic, The Dillon, which opened in 2018, was fully leased within one year, and One Glenwood, which opened in 2019, reached 96% leased before it even delivered and led to a companion tower starting construction immediately after. Overall, the market continues to deliver new supply while maintaining high occupancy at a competitive rate of $36 per square foot for Class A space. (Page 30 of State of Downtown report)
- Residential fundamentals are very strong in downtown with strong demand throughout the pandemic. Since 2015, downtown has delivered 3,451 residential units, nearly all of which are top of the market in rental rates. Our most recent census of residential buildings found them at over 95.8% occupied in Q1 2022. When looking specifically at new buildings and Class A product, those classes also were all between 94%-95% occupied. Currently, 1,456 units are under construction in downtown with over 5,000 units planned and several more projects nearing construction. (Page 23 of State of Downtown report)
G4. What is the State and City hotel tax rate?
The hotel tax rate for Wake County is 6% and the prepared food and beverage tax is 1%. There is no state hotel tax. Wake County was granted special authorization to levy the occupancy and food/beverage taxes by the State’s General Assembly.
G5. What is the tallest building in downtown Raleigh currently?
The tallest building in Raleigh, both in feet and floors, is the PNC Tower on Fayetteville Street. The PNC Tower is 538 feet tall (to spire), 32 floors, and was constructed in 2008.
G6. Could there be a new sports arena downtown?
The Raleigh City Council and Wake County Commission recently approved an amendment to the interlocal agreement that directs funding for the hospitality tax. The amendment does not contemplate a downtown sports arena. Any change would require additional direction from the County Commission and the City Council.
G7. Is there a compiled list or report of general market data related to market rents, construction costs, recent comparable land sales or listings that can be provided? Can JLL provide that data?
Yes, see links below for this information.
- Downtown Asking Rent Per Square Foot (Credit: JLL, Raleigh, NC)
- Downtown Q4 2019 Rent Snapshot (Credit: JLL, Raleigh, NC)
- Downtown Urban Land Comps (Credit: JLL, Raleigh, NC)