Q3-2019
ECONOMIC DEVELOPMENT REPORT
DOWNTOWN RALEIGH
The Downtown Raleigh Alliance produced this quarterly report. The Alliance is an award-winning nonprofit
organization whose mission is to continue to revitalize Raleigh’s downtown by enhancing its quality of life
and contributing to its economic success (For more information, visit www.downtownraleigh.org). The City
of Raleigh is a key partner of the DRA in its economic development efforts to revitalize downtown. DRA
receives a grant from the city to enhance its tax base by generating new jobs, supporting existing busi-
nesses, and attracting new businesses—in particular storefront businesses.
3rd QUARTER 2019
Economic Development Report—Downtown Raleigh
Disclaimer – The information contained herein has been obtained from sources deemed to be reliable. While we do not doubt
its accuracy, we have not verified it and make no guarantee, warranty, or representation about it.
TABLE OF CONTENTS
ECONOMIC DEVELOPMENT REPORT Highlights ..................................................................................... 1
Real Estate & Population Snapshot .......................................... 3
Historic Trends ............................................................................ 4
Third Quarter Street-Level Business Activity ............................. 5
Development Pipeline ................................................................ 7
Food and Beverage Tax Revenue ............................................12
Cover photo by Flyboy Aerial Photography
ECONOMIC DEVELOPMENT REPORT
Highlights
3rd QUARTER 2019
Economic Development Report—Downtown Raleigh
1
Downtown Raleigh’s Third Quarter of 2019 saw new street-level businesses
open and strong growth in food and beverage sales. More major construction
projects have begun and been announced while others near completion.
Development Pipeline
Projects totaling at least $2.3 billion have been delivered in 2015-2019,
are under construction, or were planned/announced for downtown in the
near future. There are also several more major development projects that
have not announced their total investment figures. More than $1.04 billion
in projects has been completed since 2015. Projects under construction in
Downtown Raleigh currently total $666 million and over $500 million in
projects announced with more projects announced and yet to release in-
vestment totals.
Public investment remains a vital component of downtown’s growth, as
$200 million in public projects are underway, planned or have been com-
pleted in the past three years. The grand reopening of Moore Square cele-
brated its renovation and immediately kicked off consistent community
use of one of Downtown Raleigh’s great public spaces. Other public pro-
jects include Capital Boulevard/Peace Street bridges and interchanges,
still underway on the north side of downtown.
Retail & Storefront Market
Downtown’s much-anticipated, first grocery store, Weaver Street Market, opened in September. Holly Ai-
ken, a women’s accessory and gift boutique, has returned to Raleigh with a store inside DECO Raleigh.
And Edge of Urge has also opened a new retail concept, RENEW House of
Self-Love. Downtown continues to serve as a hotspot for prominent chefs
and restaurateurs, as Poole’side Pies from Ashley Christensen and Jolie
from Scott Crawford opened in the past quarter, and the owners of Brewery
Bhavana and Bida Manda will be launching a new concept, Luang Prabang
Laotian Grill and Garden Bar, at The Dillon. Other notable additions include
Square Burger, Reuben’s NY Deli, Sweet Tea and Cornbread Grill and Eat-
ery, and Riddle Raleigh. Downtown has also added a new music venue with
the opening of Tin Roof.
During the third quarter, 14 new street-level businesses opened in down-
town. Overall, 169 storefront businesses have opened since the start of
2016. At least 19 more street-level businesses have been announced or
confirmed and are expected to open during the next few months, including retail, restaurants, and bars.
Downtown Raleigh Alliance has partnered with Wake Tech for a pop-up program. The program serves to
provide a downtown storefront space that attracts entrepreneurs from diverse backgrounds. The first
business to pop-up in the space is The Nutty Bavarian, which opens in late October.
$666 Million Under Construction
$1.04 Billion Recently Completed
$525 Million Announced
35 New Storefront
Businesses in 2019
$2.3 Billion Delivered, Under Construction, and
Planned
8 New Food Hall Vendors in 2019
ECONOMIC DEVELOPMENT REPORT
Highlights
3rd QUARTER 2019
Economic Development Report—Downtown Raleigh
2
Residential Market
Construction is underway on 1,019 residential units in downtown. FNB Tower has
239 units currently under construction and is nearing completion. Phase I and
Phase II of Kane Realty’s Smoky Hollow project are both progressing and will bring
417 and 283 units to the market, respectively. The Fairweather has 45 units under
construction and serves as downtown’s first condominium project since before the
Recession. The second phase of West + Lenior was recently completed, adding nine
more units to downtown’s inventory. Since 2015, 2,426 units have been delivered
and 1,522 units are currently proposed for the near future.
Dining & Hospitality Market
Downtown Raleigh set a new record in the third quarter of 2019 with $66.8 million
in sales. September was the highest food & beverage sales month ever recorded in
downtown at over $24.8 million. Additionally, Warehouse District sales alone were
up 62% in Q3 of 2019 over Q3 2018 and are up 63% this year over last year. Over-
all, Glenwood South still accounts for the largest portion of downtown’s food and
beverage sales, bringing in nearly 32% of all sales. There are now more than 200
restaurants, cafes, and bars/clubs/lounges in downtown.
In the hotel market, demolition and site clearance for The Willard is underway. This
will bring a 147-room hotel to Glenwood Avenue. Origin Hotel, also located in Glen-
wood South, currently has 126 rooms under construction. Renovations continue
on The Longleaf Hotel, which is transforming the former Days Inn on N. Dawson
Street into a 57-room boutique hotel.
Office Market
Office occupancy continues to be strong in downtown at 95.5%, according to JLL.
Downtown Raleigh has seen a total net absorption of 239,818 square feet so far in
2019. Downtown Raleigh has a Class A average asking rate of $35.58 per square
foot and an overall asking rate of $34.89 per square foot.
New Development News
Preferred Office Properties submitted plans for 121 Fayetteville, which would bring a 32-story tower and
additional parking to the north end of Fayetteville Street. Plans for the office building feature 375,000
square feet of rentable space, including 10,242 square feet of retail. Phase 1 of 301 Hillsborough at Ra-
leigh Crossing has broken ground. This project will add 287,252 square feet of office space and 12,500
square feet of retail to Downtown Raleigh. Plans were submitted for new development at Seaboard Sta-
tion on the north end of downtown. Phase 1 includes 96 housing units, a 150-room hotel, and 12,000
square feet of retail.
Two major projects recently approved for rezoning to build high-rises up to 40 stories are Kane Realty
Corp.’s Smoky Hollow Phase 3 and GoTriangle's new Raleigh Union Station Phase II project, known as
RUS-BUS, which will feature a mixed use tower and regional bus facility in the Warehouse District.
1,019 Residential units
under construction
95.5% Office occupancy rate
10.8% growth in food and
beverage sales in 3rd Quarter 2019 over 3rd
Quarter 2018
$66.8 million in food and beverage sales in 3rd Quarter
2019, a new record for downtown
2,426 Residential units
Delivered since 2015
Downtown Dashboard
3rd QUARTER 2019
Economic Development Report—Downtown Raleigh
3
18,826 Residents within one
mile of downtown core
95.5% Office occupancy rate in Q3 2019
(JLL)
10.8% Growth in food and beverage sales in Q3 2019 over Q3 2018
10,877 Population estimated
in downtown
6,889 Downtown
Residential Units
1,522 Units currently
planned
50.8% of residents with
Bachelor’s Degree or Higher
2,426 Units delivered
since 2015
1,019 Units under construction
1.75 Average household
size within 1-mile radi-us
$68,992 Average household
income within 1-mile of downtown
48,000 Employees estimated
in downtown
85 Employees per acre, densest office market
in region
269,100 Square feet of
co-working space in downtown
239,818 Net absorption square
footage YTD (JLL)
$66.8 million in food and beverage
sales in Q3 2019
227 Restaurants and
bars in downtown
40+ New retailers since
2014
16 James Beard Award Nominations since
2010
1,266 Existing rooms in
downtown
330 rooms Rooms under con-
struction
74.9% Hotel occupancy in
2018
3.4 million Visitors to top
downtown attractions in 2018
47% Increase in visitors
since 2007
7,479,214 Commercial office
space
1,444,720 Retail space
6,964,275 Government office/
facility space
5,330,977 Other: educational,
religious, institutional
25,471,919 Total existing space
31,628,850 Combined existing, under construction
and planned
2,544,778 Under construction
Sources: DRA, U.S. Census, Greater Raleigh CVB, STB Travel, CBRE Raleigh
33.8 Median Age for residents within
1-mile radius
Residential Market and Demographics
Office Market
Dining & Hospitality Market
Tourism & Hotel Market
Real Property Square Footage Within the Downtown MSD
Economic Development Report—Downtown Raleigh
3rd QUARTER 2019
4
Sources: DRA internal tracking, JLL
Storefront and Development Trends
Historical Trends Q1-Q4
2011
Q1-Q4
2012
Q1-Q4
2013
Q1-Q4
2014
Q1-Q4
2015
Q1-Q4
2016
Q1-Q4
2017
Q1-Q4
2018
Q1-Q3
2019
Street-Level Business Openings 41 38 31 36 29 46 40 46 35
Street-Level Business Closings 26 17 15 16 15 30 23 22 23
Net Gain 15 21 16 20 14 16 17 24 12
Year-End Office Occupancy 89.9% 89.2% 93.3% 89.9% 89.4% 88.6% 94.7% 94.9% 95.5%
Public Investment started or
underway (millions) $0 $205 $187 $0 $91 $169 $137 $137 $37
Private Investment started or
underway but not completed
(millions)
$106 $117 $351 $133 $261 $242 $288 $290 $629
Projects Completed 5 5 8 5 15 10 3 14 5
Total Investment completed
(millions) $22 $160 $343 $115 $260 $200 $104 $298 $154
Data provided in partnership with:
3rd Quarter Storefront Business Activity
Economic Development Report—Downtown Raleigh
3rd QUARTER 2019
5
See next page for announced businesses coming soon.
Business Openings in 3rd Quarter:
Name Type
1 Weaver Street Market Retail
2 Renew House of Self Love Retail
3 Holly Aiken Retail
4 Jensy Organics Retail
5 Tin Roof Bar/Restaurant/Music Venue
6 Riddle Raleigh Restaurant
7 Square Burger Restaurant
8 Sweet Tea and Cornbread Grill and Eatery Restaurant
9 Jolie Restaurant
10 Reuben's NY Deli Restaurant
11 Poole'side Pies Restaurant
12 Black and White Coffee Roasters Coffee Shop
13 BREW Coffee Bar Coffee Shop
14 Sass Nails Service
1 The Raleigh Mini Donut Company Food Hall
2 Alimentari at Left Bank Food Hall
Business Closings in 3rd Quarter:
1 Designed for Joy Retail
2 18 Seaboard Restaurant
3 Pho Pho Pho Restaurant
4 Growler USA Restaurant
5 Living Kitchen Restaurant
6 Pharaoh's Restaurant
8 Pizza La Stella Restaurant
7 BREW Coffee Bar Coffee Shop
1 Carroll's Kitchen Food Hall
2 Cocoa Forte Food Hall
3 Quintessential Candles Food Hall
4 The Cookie People Food Hall
5 That's Good Chocolate Food Hall
Business Closings in Early 4th Quarter:
1 Xoco Restaurant
Economic Development Report—Downtown Raleigh
3rd QUARTER 2019
6
Announced Storefront Businesses (Coming Soon)
1 Publix Retail
2 Saxapahaw General Store Retail
3 Flying Mayan Restaurant
4 Luang Prabang Laotian Grill and Garden Bar Restaurant
5 Blowfish Restaurant
6 Standard Beer and Food Restaurant
7 Rush Bowls Restaurant
8 Sam Jones BBQ Restaurant
9 Zambrero Restaurant
10 Chef Katsuji Tanabe Concept Restaurant
11 Rainbow Luncheonette Restaurant
12 (ish) Delicatessen Restaurant
13 Iris Coffee Lab Coffee Shop
14 Pink Lamp Lounge Bar
15 Johnson Street Yacht Club Bar
16 Wine and Design Bar, Coffee Shop, Events
17 The Vault Craft Beer Brewpub
18 Shred415 Fitness
19 Current Wellness Wellness Center
1 Longleaf Swine Food Hall
2 Sweet Peas Urban Gardens Food Hall
3 Primal Cuts Food Hall
4 Pazza Pasta Food Hall
5 Aunty Betty's Food Hall
3rd QUARTER 2019
7
In 2019, new projects have been announced that will bring significant changes to Downtown Ra-
leigh. Completed projects have delivered residential units along with Class A office and retail space.
Several more projects are nearing completion over the next few months such as FNB Tower, Origin,
and The Saint.
Downtown Raleigh Development and Investment
Completed in 2019
Project Name Investment Project Type Square Footage
Housing
Units/Hotel
Rooms
District
Metropolitan Apartments $ 52,500,000 Apartment 274,959 241 units Glenwood South
One Glenwood $ 86,000,000 Mixed-use (Office/
Retail)
212,500 (office) n/a Glenwood South
14,914 (retail)
West + Lenoir Townhomes
Phase II $ 1,734,216 Residential 13,349 9 units Warehouse
Moore Square Renovation $ 13,000,000 Park renovation n/a n/a Moore Square
Tin Roof $ 842,949 Restaurant/Music
Venue 7,526 (retail) n/a Glenwood South
Total $ 154,077,165 212,500 (office) 250 units
22,440 (retail)
3rd QUARTER 2019
8
Downtown Raleigh Development and Investment
Under Construction
Project Name Investment Project Type Square Footage
Housing
Units/Hotel
Rooms
District
Peace St/Capital Blvd $ 36,900,000 Infrastructure n/a n/a Capital
Longleaf Hotel $ 6,500,000 Hotel 20,812 57 rooms Capital
The Saint $ 23,000,000 Townhomes n/a 17 units Glenwood South
Origin Hotel $ 22,702,726 Hotel 4,000 (retail) 126 rooms Glenwood South
Peace (Smoky Hollow
Phase 1) $ 150,000,000
Mixed-use
(Residential/Retail) 51,600 (retail) 417 units Glenwood South
FNB Tower $ 118,000,000 Mixed-use (Office/
Residential/Retail)
152,000 (office) 239 units Fayetteville St
11,010 (retail)
107 W. Hargett $ 4,000,000 Retail/Office renova-
tion
17,634 (office) n/a Fayetteville St
3,780 (retail)
The Fairweather $ 12,679,746 Mixed-use
(Residential/Retail) 1,836 (retail) 45 units Warehouse
Sir Walter Apartments
(Renovation) $ 15,000,000 Senior Housing 20,000 (retail) 18 new units Fayetteville St
Rainbow Upholstery
Building $ 2,859,105
Retail/Office Renova-
tion
13,540 (office) n/a Glenwood South
5,760 (retail)
Tower II at Bloc 83 $ 108,000,000 Mixed-use (Office/
Retail)
241,750 (office) n/a Glenwood South
30,000 (retail)
Smoky Hollow Phase II Not Announced Mixed-use (Office/
Residential/Retail)
225,000 (office) 283 units Glenwood South
41,142 (retail)
Raleigh Crossing
Phase 1 $ 160,000,000
Mixed use (Office/
Retail)
287,252 (office) n/a Glenwood South
12,500 (retail)
The Willard Not Announced Hotel 3,860 (retail) 147 Rooms Glenwood South
Wells Fargo Capitol
Center (Renovation) $ 7,000,000 Office Renovation n/a n/a Fayetteville St
Total $ 666,641,577 937,176 (office) 1,019 units/
185,488 (retail) 330 rooms
3rd QUARTER 2019
9
Downtown Raleigh Development and Investment
Completed in 2018
Project Name Investment Project type Square Footage
Housing
Units/Hotel
Rooms
District
Poyner YMCA $ 3,000,000 Service 28,000 n/a Fayetteville St
The Dillon $ 150,000,000 Mixed-use (Office, Resi-
dential, Retail
210,000 (office) 271 units Warehouse
52,000 (retail)
10Arros $ 1,805,000 Townhomes n/a 10 units Moore Square
Union Station $ 111,400,000 Infrastructure 26,000 n/a Warehouse
Guest House $ 850,000 Hotel 4,756 8 rooms Moore Square
Morgan St. Food Hall $ 2,000,000 Retail/Restaurant 22,000 (retail) n/a Warehouse
Junction West $ 4,200,000 Office/Event Space Ren-
ovation 9,473 n/a Warehouse
Revisn $ 6,540,000 Residential n/a 48 units Glenwood South
Transfer Co. $ 19,000,000
Retail/Restaurant 42,000 (retail) 15 units Moore Square
The Ware Townhomes
Total $ 298,795,000
210,000 (office) 344 units
116,000 (retail) 8 rooms
3rd QUARTER 2019
10
Note: these projects are subject to change and should be considered estimates based on public information. Additionally, several projects have not finalized their investment total. As such, planned investment dollars are likely higher and project costs likely to change.
Downtown Raleigh Development and Investment
Proposed
Project Name Investment Project Type Square Footage
Housing
Units/Hotel
Rooms
District
The Nexus Not announced
Mixed-use (Office,
Retail, Residential,
Hotel)
327,375 (office) 414 units/ Fayetteville St
48,000 (retail) 264 rooms
Seaboard Station
Phase 1 $ 250,000,000
Mixed-use
(Residential, Retail,
Hotel)
12,000 (retail) 96 units/ Seaboard/
Person St. 150 rooms
Seaboard Station
Phase 2 Not announced
Mixed-use
(Resdential, Retail) 45,000 (retail) 549 units
Seaboard/
Person St.
Hilton Garden Inn/
Homewood Suites Not announced Hotel 1,810 (retail) 259 rooms Fayetteville St
Raleigh Crossing
Phase 2 Not announced
Mixed (Residential/
Hotel/Retail) 7,000 (retail)
136 units Glenwood South
169 rooms
Courtyard Marriott $ 30,000,000 Hotel n/a 179 rooms Fayetteville St
Home2 + Tru Raleigh Not announced Hotel n/a 190 rooms Fayetteville St
The Edge $ 75,000,000 Mixed-use (Office/
Retail)
242,000 (office) n/a Moore Square
8,300 (retail)
Fourth Ward Not announced Residential n/a 10 units Warehouse
City Gateway $ 70,000,000 Mixed-use (Office/
School)
144,130 (office) n/a Fayetteville St
52,672 (school)
South Street Condos Not announced Residential n/a 87 units Warehouse
400 H $ 100,000,000 Mixed-use (Office,
Retail, Hotel)
144,410 (office) 216 units Glenwood South
16,935 (retail)
St Mary's Townhomes Not announced Residential n/a 6 units Glenwood South
Nash Square Hotel Not announced Hotel 4,224 (retail) 190 rooms Warehouse
City View Townes Not announced Residential n/a 8 units Warehouse
121 Fayetteville Not announced Mixed-use (Office,
Retail)
375,000 (office) n/a Fayetteville St
10,242 (retail)
Total $ 525,000,000
1,232,915 (office) 1,522 units
153,511 (retail) 1,401 rooms
3rd QUARTER 2019
11
3rd QUARTER FOOD AND BEVERAGE SALES IN DOWNTOWN
Food and beverage sales for downtown were up 10.8% for 3rd Quarter
2019 over 3rd Quarter 2018. Downtown restaurants and bars are continu-
ing their strong performance over the past seven years as 3rd Quarter
2019 is up 84.7% compared to the 3rd Quarter 2012.
Sources: Wake County Tax Assessor
3rd QUARTER 2019
12
YEAR-TO-DATE FOOD AND BEVERAGE SALES IN DOWNTOWN
Downtown’s food and beverage sales are up 8.8% for 2019 compared to
the first three quarters of 2018. The first three quarters in 2019 are up
79.2% over the first three quarters of 2012, showing rapid growth in down-
town’s food and beverage sales.
Sources: Wake County Tax Assessor
3rd QUARTER 2019
13
MONTHLY FOOD AND BEVERAGE SALES IN 2018 AND 2019
Downtown monthly food and beverage sales continue to steadily grow. Sep-
tember has been the highest grossing month in 2019 and highest sales
month ever recorded in downtown, exceeding $24.8 million. Every month
of Q3 2019 was greater than in Q3 of 2018.
Sources: Wake County Tax Assessor
3rd QUARTER 2019
14
FOOD AND BEVERAGE SALES GROWTH BY DISTRICT
Commercial districts throughout downtown experienced growth in food and
beverage sales in 2019 compared to 2018. In the Warehouse District, sales
were up 63.3% so far in 2019 over 2018. The Warehouse District has seen
considerable growth in restaurants over the past year including Morgan Street
Food Hall, A Place At the Table, O-Ku Sushi, Oak Steakhouse, Heirloom
Brewshop, and Barcelona Wine Bar.
Sources: Wake County Tax Assessor
3rd QUARTER 2019
15
FOOD AND BEVERAGE SALES DISTRIBUTION BY DISTRICT
Third quarter saw the Warehouse District increase its share of downtown’s
food and beverage sales from 8.7% in 1st Quarter of 2019 to 13.8% after
the 3rd Quarter of 2019.
Glenwood South brings nearly one third of all downtown food and beverage
sales with the Fayetteville Street district accounting for the second most
sales among districts at 29.5%.
Source: Wake County Tax Assessor