Triangle builds up.

 
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With a crash and shower of pine needles from falling trees, the future is taking shape north of Raleigh. It's the broad pathway being cleared for what in a few years will become the 1-540 Outerbelt.

To the south, the future came 18 months ago when dignitaries cut a ribbon for the first passengers at Cary's new train station. By 2003, when motorists drive the Outerbelt in the north, workers could be boarding commuter trains for offices in the Research Triangle Park, Durham and Raleigh.

"Clearly," says Ron Gibson, chief executive of Highwoods Properties in Raleigh, which will build many of those offices, "the defining factor in the Triangle in coming years will be our transportation system."

David Waggoner, Raleigh area manager for Heery International Inc., a national architectural and construction-management firm, believes public transit will be particularly important. "Most people think it has been late in starting and that we need to get on board quick," he says.

In the next decade, the commercial real-estate market will continue to be driven by the powerful engines of high technology and the Research Triangle Park, which have created 77,000 new jobs in the region since 1992. But how people get to and from those jobs and to the shops and stores they frequent to the tune of $10.8 billion a year will mold decisions about where to put business parks, industrial projects and shopping centers in the Triangle's second building boom in a generation.

It is a construction spree that, with the possible exception of retail development, experts believe is fundamentally more sound than that of the 1980s. Then, easy loans and generous tax breaks lured developers into risky ventures that failed or produced only lackluster results. Paradoxically, more money is available today, but it's safer, says Holly Alderman, vice president of Investors Title Insurance Co., a Chapel Hill insurer of property titles.

On one hand, real-estate investment trusts, behind much of the building, are traded publicly and subject to intense scrutiny by both regulators and investors. On the other, conduit financing, a form of lending in which investors pick how much risk they can tolerate when investing in commercial mortgages, enables owners of older buildings to refinance and use the money to build new ones.

The bottom line? "This is probably one of the strongest commercial real-estate markets in the United States," says Eric Karnes, president of Karnes Research Co. in Cary, which tracks commercial real-estate trends. "Developers, lenders and institutions don't come here just to watch Carolina play basketball."

"It's a healthy time for builders," agrees Allen Jones, vice president of Davidson, Jones & Beers, a Raleigh-based construction company whose $115 million in revenues this year are up 30% from a year ago. "Unfortunately, there are opportunities we have to let go by. We simply don't have the capacity to handle them."

The 7.4 million square feet of office, industrial and retail space that developers have on drawing boards for the coming months equals six Crabtree Valley shopping centers. It comes in a variety of shapes and locations. But whether it's a $31 million plan to convert aging Durham tobacco warehouses into apartments and shops or new developments like Globe Center - a Craig Davis Properties light-manufacturing/distribution park in Raleigh - confidence in the economy undergirds it.

"Just look at the Research Triangle Park alone," says Jeff Glenn, head of investment sales for Raleigh's CB Commercial/Koll Real Estate, formerly Property...

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