Quarterly Newsletters
Market Insight | Raleigh-Durham Commercial Real Estate
Q2 2025 Triangle Commercial Market Overview
April 1, 2025 to June 30, 2025
Market Summary
The Triangle’s commercial real estate market continued to show signs of divergence across property types in Q2, with resilient population growth and corporate investment supporting retail and industrial, while office and multifamily sectors navigated high vacancies and tempered rent growth.
🏗 Industrial
The industrial market remains steady, though rent growth has cooled. Vacancies held around 7.0% in Raleigh and 7.3% in Durham, as supply caught up with demand. New deliveries have slowed, and absorption has remained positive, led by logistics and advanced manufacturing. Notable projects like Wolfspeed’s $5B facility in Chatham County and FUJIFILM’s expansion in Holly Springs reflect the Triangle’s appeal to high-tech users. With fewer starts ahead, fundamentals are expected to tighten again in 2026.
🏢 Office
Office vacancies edged higher—12.1% in Raleigh and 10.4% in Durham—as hybrid work continues to reshape space needs. Class A buildings in mixed-use nodes like North Hills and RTP are seeing selective interest, while older assets face more pressure. Annual rent growth was modest (1.3%), and effective rents declined due to concessions. Developers have pulled back, with under-construction totals dropping significantly, helping prevent further oversupply.
🏬 Retail
Retail remains the Triangle’s top performer. Availability rates are among the lowest nationally—2.6% in Raleigh and 2.7% in Durham. Tight supply and growing suburban demand have pushed rent growth to 7.7% in Raleigh and 2.3% in Durham. Construction activity is minimal, and over 80% of current projects are preleased. Medical, food & beverage, and service-oriented tenants remain especially active in securing space.
🏘 Multifamily
Multifamily demand remains historically high, but record deliveries continue to weigh on vacancies—12.2% in Raleigh and 12.1% in Durham. Absorption reached 8,100 units in Raleigh and 2,900 in Durham, nearly double their long-term averages. Still, rents declined –1.4% in Raleigh and –1.7% in Durham. Developers are shifting focus to smaller, suburban projects as construction pipelines slow. Recovery in rent growth is expected in 2026 as deliveries taper.
Full Report Highlights
- Industrial: Vacancy steady at 7.0% (Raleigh), 7.3% (Durham); rent growth slowed to 3.7%; major high-tech users expanding
- Office: Vacancies at 12.1% (Raleigh), 10.4% (Durham); leasing tours up; rent growth at 1.3% with rising concessions
- Retail: 2.6%–2.7% availability; 7.7% rent growth in Raleigh; low construction keeps fundamentals tight
- Multifamily: 12%+ vacancy; record absorption; rent growth negative; pipeline easing after record deliveries
Insider Insights
“Across the Triangle, we’re seeing a clear shift: tenants are prioritizing flexibility and value over size and prestige. Whether it’s smaller office footprints, suburban multifamily builds, or retail operators expanding cautiously into secondary corridors, the market is adjusting in real time. The next 12 months will be less about expansion—and more about smart positioning.”
Q3 2025 Triangle Commercial Market Overview
July 1, 2025 to September 30, 2025
Market Summary
The Triangle’s commercial real estate market remained resilient in Q3, supported by strong population growth, expanding corporate investment, and a recent Federal Reserve rate cut that began to restore investor confidence. Industrial and retail fundamentals remain among the strongest in the nation, while office and multifamily sectors continue to work through elevated vacancies and rent softness from recent supply peaks. Overall, the market is stabilizing, with fewer new construction starts and early signs of balance returning across key asset classes.
🏗 Industrial
Industrial fundamentals held steady through Q3 as absorption remained healthy and developers continued to scale back new projects. Vacancies rose slightly to 6.9% in Raleigh and 7.7% in Durham, as new supply outpaced demand. Annual rent growth has slowed to around 3%, but remains above the national average. Key projects like Wolfspeed’s $5B silicon carbide facility and FUJIFILM Diosynth’s $2B Holly Springs plant continue to draw skilled labor and high-tech manufacturing tenants. With 3–4 million SF under construction across the region and fewer speculative starts, industrial vacancies are expected to stabilize in 2026 as the current wave of supply is absorbed.
🏢 Office
Office demand remained soft but stable this quarter as tenants continued to prioritize quality over quantity. Vacancies held at 11.3% in Raleigh and 9.8% in Durham, while leasing activity showed signs of life in mixed-use nodes like North Hills, Downtown Durham, and RTP. Annual rent growth slowed to just over 1%, and rising concessions have further reduced effective rents. With only 640K SF under construction in Raleigh, developers have largely paused new projects, which will help the sector find equilibrium. The flight-to-quality trend persists, with Class A buildings in amenity-rich areas outperforming older, less adaptable assets.
🏬 Retail
Retail continues to outperform all other property types, driven by record-low availability and sustained rent growth. Availability sits at just 2.7% in both Raleigh and Durham, among the tightest rates in the nation. Rents are up 8.0% in Raleigh and 1.0% in Durham, with landlords still commanding multiple offers on quality space. Construction remains limited—about 80% of new projects are preleased—and demand from food, beverage, and service tenants remains strong, especially in fast-growing suburban corridors. Investor activity picked up in Q3, highlighted by the $290M sale of Crabtree Valley Mall, underscoring long-term confidence in the region’s retail fundamentals.
🏘 Multifamily
Multifamily demand remains strong across the Triangle, but elevated vacancies and negative rent growth persist as the market digests years of record deliveries. Vacancies have eased to 10.9% in Raleigh and 11.0% in Durham, down from recent peaks, while absorption remains robust—8,300 units in Raleigh and 2,700 in Durham over the past year. Rent growth has turned slightly negative (–1.6% in Raleigh; –1.1% in Durham), reflecting competition among newer, high-end properties. Construction pipelines are finally easing, with 4,400 units underway in Raleigh and 4,700 in Durham, setting the stage for rent recovery in 2026 as new supply slows and demand remains consistent.
Full Report Highlights
- Industrial: Vacancies up slightly to 6.9% (Raleigh) and 7.7% (Durham); 3% rent growth; supply moderating
- Office: Vacancies stable at 11.3% (Raleigh) and 9.8% (Durham); leasing steady; limited new starts
- Retail: Record-low 2.7% availability; 8% rent growth in Raleigh; investor activity strengthening
- Multifamily: Vacancies easing but still high (10.9% Raleigh / 11.0% Durham); rent growth negative; pipeline slowing
Insider Insights
“Momentum is returning across the Triangle as rate cuts and moderating construction begin to rebalance the market. Industrial and retail continue to shine, while multifamily and office are showing the first signs of stabilization. The next 12 months will be about absorption and smart investment decisions rather than aggressive expansion.”
Q4 2025 Triangle Commercial Market Overview
October 1, 2025 to December 31, 2025
Market Summary
The Triangle closed Q4 2025 in a period of stabilization, continuing to outperform much of the nation due to strong population growth, a highly educated workforce, and sustained investment in life sciences, advanced manufacturing, and technology. While elevated interest rates and recent supply waves continue to weigh on select sectors, leasing and investment activity showed signs of recalibration as buyer and seller expectations began to align. With development activity slowing across most asset classes, market fundamentals remain stable and position the region for gradual improvement heading into 2026.
🏗 Industrial
Industrial fundamentals remain healthy as the market works through elevated levels of new supply. Vacancy rates stood near 6.9% in Raleigh and approximately 7.7% in Durham, reflecting normalization rather than weakening demand. Absorption remained well above long-term averages, supported by logistics, life sciences, and advanced manufacturing users. Construction activity has begun to slow as developers scale back speculative starts, and with fewer deliveries expected, fundamentals are anticipated to tighten again in 2026.
🏢 Office
The office market remains in transition, with vacancies elevated but stabilizing—approximately 11.2% in Raleigh and 9.8% in Durham. Leasing activity improved modestly, particularly in high-quality, amenity-rich environments such as North Hills, RTP, and Downtown Durham, as tenants continue to downsize but upgrade. Rent growth remained limited amid elevated concessions, though sharply reduced construction pipelines are helping limit additional vacancy pressure and support gradual improvement over the medium term.
🏬 Retail
Retail continued to outperform all other property types across the Triangle. Availability rates remained extremely tight—approximately 2.6% in Raleigh and 3.1% in Durham—well below national averages. Limited new construction, strong population growth, and steady consumer spending supported robust rent growth, particularly in Raleigh. Most new development remains heavily pre-leased, reinforcing landlord leverage and keeping retail fundamentals among the strongest in the Southeast.
🏘 Multifamily
Multifamily demand remained strong across both Raleigh and Durham, driven by continued in-migration and employment growth. While vacancies remain elevated at approximately 10.9% in both markets due to a recent wave of deliveries, absorption has remained well above historical norms. Rent growth stayed slightly negative as owners compete for tenants, though a declining construction pipeline and fewer deliveries expected in 2026 should support gradual vacancy improvement and eventual rent stabilization.
Full Report Highlights
- Industrial: Vacancies near 7%; absorption above long-term averages; construction activity slowing as deliveries taper
- Office: Vacancies elevated but stabilizing; demand focused on Class A and mixed-use locations; pipeline sharply reduced
- Retail: Availability near historic lows; strong rent growth; limited new supply largely pre-leased
- Multifamily: Strong absorption; elevated vacancies from recent supply; rent growth negative but stabilizing as pipeline eases
Insider Insights
“Across the Triangle, Q4 reflected a shift from correction to recalibration. Tenants and investors remain selective, prioritizing quality, location, and flexibility, while developers are exercising discipline amid higher costs. With supply pipelines shrinking and population growth continuing, the region is well positioned for healthier fundamentals as we move into 2026.”