INC fills office vacancy

A growing contract research organization continues to nurse a tech-busted North Raleigh building back to health.

INC Research, which helps drug makers test new treatments in humans, agreed to double its space at 4800 Falls of the Neuse to a total of about 58,000 square feet.

It's the company's second growth spurt in the Highwoods Properties building. Last year, INC agreed to lease 29,000 square feet there as part of a plan to add 100 jobs.

The latest deal brings occupancy of the 168,00-square-foot building to about 90 percent -- a brisk about- face after being abandoned by its only tenant, IBM, four years ago.

Highwoods spent about $2 million fixing up the building. And in the past year, INC, Choate Construction, the Social Security Administration, Surgical Review, Amica Insurance and SoftPro have filled it up.

The deals continue to help tighten the Falls of the Neuse office corridor, where in the past few years landlords have had a hard time keeping and attracting tenants. The submarket's office vacancy rate had risen from 12.1 percent to 17.5 percent in 2006, while the entire region's vacancy rate sank from 14.1 percent to 13 percent.

The vacancy rate in the Falls submarket has since fallen to 15.3 percent.

The deal is also expected to push Highwoods closer to its goal of ending the year with at least 91 percent of its 26.8 million-square-foot portfolio occupied.

The Raleigh real estate investment trust recorded 1.7 million square feet of leases in the second quarter, up 21 percent from the first. We'll see how that translates to the bottom line this week, when Highwoods reports second-quarter financial results.

The company has spent the the third quarter pushing toward other goals in its three-year strategic plan. Last week, it introduced Dan Clemmens as chief accounting officer, a new position designed to oversee all aspects of financial reporting -- crucial, considering accounting errors led the U.S. Securities and Exchange Commission to probe accounting related to certain Highwoods property sales. The investigation ended last year without punishment.

Highwoods also said it plans a $9.4 million, 62,000-square-foot call center in Memphis, Tenn. It'll be leased by cable-TV provider Comcast when finished in 2008. Highwoods is 4.2 percent shy of its goal of starting $545 million in projects during the three years ending Dec. 31.