Downtown Durham tower will get speculative lab space built to jumpstart leasing
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The Venable at Roxboro tower in downtown Durham. Photo: CBRE
A Raleigh developer will build speculative lab space inside a recently opened Durham office tower to jumpstart leasing activity at the building.
Why it matters: The office and life sciences markets in the Triangle have both seen their vacancy rates increase, as developers deal with a difficult funding environment for startups as well as a glut of of empty office space exacerbated by remote work.
Zoom in: Finished in 2022, the Roxboro is one of the few office towers to open in downtown Durham in recent years, and its 202,000 square feet of office space is still available to lease.
- Its leasing activity has been affected by the tower's opening around the time Duke University put much of its space up for sublease during the pandemic, said Jeff Sheehan, a managing partner at Trinity Capital, one of the investors in the building.
- "They had 350,000 feet in downtown Durham that you know now is full with subleases," he noted, "but those were otherwise office and lab tenants that we would have had a better shot at."
Driving the news: In response to those challenges, Trinity Capital will build out move-in ready lab space on a full floor of the building, in an effort to make it cheaper and easier for smaller biotech companies to move into the building.
- The firm may expand the lab space to another floor, depending on leasing demand.
- Sheehan said his firm has had success leasing smaller speculative lab spaces already in the area at its Southport Innovation Center in Morrisville.
- He also believes downtown Durham will still benefit from spillovers from Duke University's research.
The big picture: Notably, no office construction starts are expected in the Triangle for the foreseeable future, as existing landlords try to find ways to fill their empty office space, a CBRE report from August noted.
- Sheehan said a similar trend could be seen in the life science sector after several large projects, including Trinity's own Spark LS project in Morrisville, are expected to be completed this year.
- At least two other projects, including Via Labs in Research Triangle Park and Heritage Square in downtown Durham, have opted not to begin construction before signing initial tenants.
Editor's note: This story has been updated with additional details about Trinity Capital's plans for lab space at the Roxboro.