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.”