Once Neglected North Durham Sees Strong Industrial Development Pipeline
Durham, NC - For as long as I’ve lived in Durham, now nearly 27 years, North Durham has always been one of the more overlooked parts of the Triangle. It had an aging population, little new housing stock and household and income demographics that didn’t check enough boxes on retailers’ site selection criteria to sign a lease. From an economic development standpoint, most prospective job-creating companies would cross North Durham off their site list with little consideration. North Durham was not convenient to the vast majority of the Triangle’s workforce and not well-served by the region’s road networks. Even with I-85 slicing through it, access to the greater Triangle was limited. It also had no quality industrial space in the market ready for occupancy, even if one wanted to locate there.
The exception to this general rejection of North Durham was Treyburn Corporate Park, which to this day houses a handful of international manufacturing companies on large campuses, such as AW North Carolina, bioMerieux, Merck and Corning. These companies needed significant land with heavy industrial zoning for large-scale projects, and relied just as much on a workforce from the northern counties and Southern Virginia as they did on employees from the core of the Triangle. They built purpose-specific manufacturing plants, often with incentives and investment dollars from Durham County as well as the State of North Carolina. They did not move into flexible, ready industrial buildings. Those types of buildings would not work for them and simply did not exist in the submarket.
A Limited and Aged Market
Today, there is still not a single square foot of leasable Class A industrial product in the area north of I-85 in Durham County to lease. In fact, the entire submarket, based on my research using CoStar, has only roughly 658,000 square feet of industrial space spread out over 56 properties (in other words, mostly very small buildings). The average age of these buildings is 40 years and nothing is newer than 2006. This search did remove the owner-occupied Treyburn campuses as well as any government-owned properties, which are not available for lease. The CoStar information can only get so granular in detail, but after reviewing these 56 properties more closely, I have inferred that the vast majority of them are owner-occupied, either partially or completely, meaning there is far less industrial space in the North Durham submarket that can be leased. In fact, currently only 36,000 SF shows as being available in the market for lease at two properties. To summarize, the industrial market in North Durham is small, aged and mostly owner-occupied, with little availability at all.
Changes are Coming
The recent addition of the 11.5 mile East End Connector, which motorists know as I-885, has changed the calculus in the North Durham industrial market. Developers have noticed that this area is now much more accessible to the Greater Triangle than it previously was, as the connection to I-40 has improved. Continued improvements to Highway 70 have also helped the flow of workforce and goods to the area. The I-85 industrial corridor, which has exploded as a venue of choice for the logistics, distribution and manufacturing sectors since the Covid pandemic, has brought new attention as it snakes its way across roughly 13 miles of Durham County in the north. Improvements in road connections and strategic
changes in where products are made (for example, more on-shoring) and how quickly they need to reach the end-user (e-commerce same day or next day delivery) has finally put North Durham on the map. Residential and commercial developers have taken notice too, adding to the housing stock with new single family and multifamily projects and delivering new and higher quality retail shops, including what will be the area's first Publix Supermarket.
Two massive industrial projects and one “smaller” project are currently under construction. Scannell Properties, which successfully redeveloped the Regional Commerce Center between Briggs Avenue and Ellis Road, will deliver “Durham 85”, a two-phase project consisting of 7 industrial buildings and over 1,500,000 SF of Class A Industrial space. The
project, which is underway, is located at Junction and Ferrell Roads by the East Club Blvd and I-85 exit. Further North, near the split at Hamlin and Old Oxford Roads, adjacent to the long-time location of KBI BioPhara and bioMerieux’s-leased space, The Welcome Group is developing Welcome Venture Park. With over 1,000,000 SF of bulk distribution, shallow bay industrial and manufacturing-ready buildings, the park will be fit-up ready for a variety of industrial user types. Finally, at Camden Avenue near I-85, very much within the City of Durham, Logan Commercial Properties and Hughes Commercial Properties are planning the Durham Logistics Center, a single industrial building consisting of 351,000 SF. According to Matt Gladdek, Vice President of Economic Development at the Greater Durham Chamber of Commerce, who leads business recruitment efforts in the County, the additions are coming at the right time. “These projects have the ability to serve a growing Durham and create jobs here. They also can tap into labor sheds such as Roxboro and Oxford and support jobs for their residents and revitalization in those towns.” From a submarket with negligible leasable industrial space, and absolutely no Class A industrial space, to one that will shortly offer nearly 3,000,000 SF of Class A, the once forgotten and rejected North Durham is very much on the map, and is certain to attract more jobs and additional development.
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For more information, please contact Carey Greene, Managing Director of SVN | Real Estate
Associates and leader of the Ascend Industrial Team at carey.greene@svn.com or by calling
919-287-2135. Did you enjoy this article? Please let me know!