Charlotte, NC vs. Raleigh, NC: Which Is Better for Businesses?

Published: 08-01-2022  Category: General CRE

North Carolina has a lot to offer the businesses that call it home. The cost of starting a business in North Carolina is lower compared to other states and it has a large population to contribute to the workforce.

Charlotte and Raleigh are two of the biggest cities in North Carolina and home to a wide variety of businesses and industries.

We’ll take a look at the pros and cons of both areas so you can make an informed decision about where to move or start your business.

Read on to learn the most important factors to think about.

Population Comparisons

The population statistics of Charlotte and Raleigh can tell you a lot about how lucrative of an area it would be for your business.

Compare demographics like household income and population size so you know whether they will have an effect on your business based on the activity you’re conducting.

Average Demographics

Charlotte is by far the largest city in North Carolina, with a population size of 879,079.

Here are a few other key demographics for Charlotte:

  • 52% of the population is female.
  • About 59% of the population is between the ages of 18 and 65.
  • The median age is 34.2 years old.

Raleigh, NC has a population size of 469,124 and is the second largest city in North Carolina.

A few other key demographics for Raleigh include:

  • 51.7% of the population is female.
  • About 63% of the population is between the ages of 18 and 65.
  • The median age is 34.5 years old.

As you can see, Charlotte and Raleigh are both pretty similar in age and gender, but Charlotte has almost double the population that Raleigh has.

That could have an impact on your business if you plan to rely heavily on recruiting employees from the area.

Median Household Income

The median household income of an area can be indicative of employment and education levels, too. Charlotte and Raleigh are very similar in median household incomes.

The median household income in Charlotte is $65,359.

The median household income in Raleigh is $69,720.

Commercial Real Estate Comparisons

Specifically compare the commercial sector of both Charlotte and Raleigh so you can understand more about how to open your business there.

Average Commercial Rents

The average cost of commercial rent in Charlotte is:

  • Class A Office Space: $31.20 per square foot.
  • Class B Office Space: $25.94 per square foot.
  • Class C Office Space: $16.85 per square foot.

The average cost of commercial rent in Raleigh is:

  • Class A Office Space: $31.59 per square foot.
  • Class B Office Space: $24.62 per square foot.
  • Class C Office Space: $19.92 per square foot.

Both Charlotte and Raleigh have fairly equal average commercial rent costs. However, if you’re specifically looking for Class C office space, Charlotte averages about $3.00 less per square foot.

Commercial Vacancy Rates

Look at the commercial vacancy rate to assess how competitive the two markets are. Typically, a lower vacancy rate means a more competitive market.

  • The commercial vacancy rate in Charlotte is 12.72%.
  • The commercial vacancy rate in Raleigh is 9.63%.

Charlotte has more vacant space available, which tells us that Raleigh is probably the more competitive market.

CRE Market Outlook for 2022

When you look at the market outlook for a region, you want to see how fast or how well it’s growing.

Look at job growth and population growth, as well as other relevant indicators.

So far in 2022, Charlotte has seen 4,700 announced new jobs and a net average growth of almost 15,000 jobs. The city has also seen its employment rate return to pre-pandemic levels.

In Raleigh, the city hasn’t recovered quite as quickly from the pandemic as Charlotte, but the job market is showing signs of improvement.

Commercial Activity Comparisons

When you look at the breakdown of real estate activity in Charlotte and Raleigh, you can get a better understanding of how profitable the area will be for your specific business needs.

Retail: In-Person Shopping Versus Online Shopping

Charlotte has almost double the population size of Raleigh and therefore has a lot more retail opportunities and activity. There are lots of luxury department stores, outlet shopping centers, and everything in between.

Raleigh’s retail activity suffered during the pandemic but activity has slowly been picking back up. There are several retail areas like the Raleigh Market and the Crabtree Valley Mall.

Industrial: Warehouse & Facilities Activity

Advanced manufacturing generates more than 91,000 jobs in Charlotte. It’s one of the main industries that drives the economy.

Other industries that drive the economy include logistics and distribution, healthcare, and technology.

Industrial activity in Raleigh is similar to Charlotte. There’s a high demand for industrial space in the area which has increased the average asking rents and lowered the vacancy rate.

Office: Office Space Activity

In Charlotte, office space activity has recently started to increase after the pandemic. Rents have been steadily rising in the area and the demand is catching up.

The office activity in Raleigh is booming. Apple and Amazon have already made plans to either open offices or hire employees from the Raleigh area. And Meta is considering an office expansion in Raleigh.

Multifamily: Vacancy Rates & Leasing Activity

The multifamily market in Charlotte has recently seen record growth, with the ongoing influx of job growth and people moving to the area. The need for multi-unit apartment buildings is higher than ever.

Raleigh’s multifamily market isn’t growing nearly as quickly as Charlotte, but it has some advantages. Home prices in the area have surged which is causing a higher demand for renting as opposed to buying.

Deciding Which Location Is Right for Your Business

Both Charlotte and Raleigh have a lot of advantages for businesses.

Now that you have some factual information on commercial real estate in each of these areas, consider your business goals and the activity you’ll be conducting.

This should help you decide which area is better for your business.

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