The Raleigh Commercial Real Estate Market

Apr 23, 2024

Raleigh, North Carolina's "City of Oaks," stands as one of the nation's fastest-growing commercial real estate investing and leasing markets.

The dynamic metro area has seen a surge in population and employment growth in the last decade, making it a competitive market for office and retail investments as the city expands. Crexi equips individuals seeking to invest or lease in Raleigh commercial real estate with the tools to quickly search, analyze, and transact property.

Raleigh brokers and those representing Raleigh properties nationwide harness Crexi's robust platform and marketing tools to develop their networks and close more deals. Crexi-empowered brokers have completed more than $615 billion in commercial transactions and represented more than $7 trillion in property listings.

Crexi proudly supports Raleigh, Chapel Hill, Durham, Garner, Cary, and surrounding communities as the region's fastest-growing online CRE platform.

The State of Raleigh Commercial Real Estate

The Raleigh-Durham metropolitan area, also known as the Research Triangle, is a vibrant and rapidly growing region, combining the charm of historical Southern cities with the innovative spirit of modern urban development.

Situated in the heart of North Carolina, the market includes the cities of Raleigh (the state capital), Durham, and Cary. The metro area is renowned for its high concentration of research institutions and technology companies, with a reputation as a hub for innovation and education in the Southeastern United States.

Prestigious universities such as Duke University, North Carolina State University, and the University of North Carolina at Chapel Hill contribute to the area's dynamic atmosphere, creating a culture of academic excellence and cutting-edge research.

The economy in Raleigh-Durham has seen significant growth and diversification over the past few years, attracting a myriad of businesses across sectors such as biotechnology, information technology, and clean energy.

This economic boom has been accompanied by a surge in real estate development, with the addition of modern residential communities, commercial spaces, and revitalized downtown areas that blend historical architecture with contemporary designs.

Raleigh Regional Breakdown

Raleigh-Durham was ranked among the top 25 fastest-growing places in 2023. The region's population is young, diverse, and well-educated. Residents are attracted by the promise of employment opportunities, quality of life, and the area's rich cultural scene that includes art galleries, theaters, and a thriving local food movement.

Population of Wake County (where Raleigh is located) has increased by nearly 30% since 2010, based on data from the United States Census Bureau.
Most populous cities include Raleigh, Durham, Fayetteville, and Cary.
Median age is 37.8, according to CensusReporter.org, a figure that is a little less than the US.
Per capita income is $46,696, about 10% higher than the amount in the US.
Median household income is $87,180, about 20% higher than in the United States.

Raleigh Job Market

According to the Milken Institute, Raleigh's economy is ranked as the second best-performing in the nation. This is a testament to its dynamic job market and innovative sectors, which continue to attract professionals and businesses alike. Key industries such as biotechnology, information technology, clean energy, and an emerging fintech sector benefit from the area's rich pool of talent, largely thanks to local college graduates opting to work locally.

Total gross domestic product for the Raleigh MSA is nearly $120 billion, up from $85 billion in 2017, according to the most recent report from the St. Louis Federal Reserve.
According to data from the US Bureau of Labor Statistics (February 2024), the unemployment rate is at a near-historic low of 3.3%.
Target industries in Wake County include life sciences, advanced manufacturing, IT and technology, and clean tech/smart grid.
The region has been ranked #1 for the lowest unionization rate in the US, #2 best place for IT professionals to live and work, and #3 for the fastest-growing cleantech cluster.
WalletHub ranks Raleigh as the 14th best metro area for STEM professionals in 2024, based on key criteria like job openings, share of workforce in STEM, and STEM employment growth.
Major employers in Wake County and Durham include Duke University and Duke Health Systems, State of North Carolina, Wake County Public School System, Walmart, AISIN auto manufacturing, Blue Cross and Blue Shield, and Wolfspeed semiconductor manufacturing.
Raleigh and Durham also rank among the best large cities to start a business, based on factors such as average growth in small businesses and startups per capita.
Triangle area boasted two of the nation's priciest office deals in 2023 – Midtown Plaza in Raleigh's Park District and The Carmichael and Research Labs buildings in Durham.
The Research Triangle, nestled between Raleigh, Durham, and Chapel Hill in North Carolina, is a vibrant hub of innovation and collaboration, home to over 250 businesses ranging from startups to Fortune 100 companies across 7,000 acres.
More than 50% of residents hold a bachelor's degree or a postgraduate degree, which is 1.4 times the rate in the US.
The Raleigh-Durham area is home to three of North Carolina's largest institutions for higher education: North Carolina State University at Raleigh, University of North Carolina at Chapel Hill, and Duke University.
Transportation infrastructure includes the Raleigh-Durham International Airport (RDU), major highways like Interstate 40 and Interstate 95, and comprehensive rail services for both freight movement and passenger travel.

Raleigh Industrial Market

The industrial market in Raleigh is seeing significant new leasing activity and a robust pace in warehouse/distribution asking rents. Demand is particularly strong in the Eastern Wake County and RTP/I-40 Corridor submarkets. This activity, combined with the delivery of new construction aimed at meeting modern space requirements, suggests the market is poised for future growth as it continues to attract and accommodate diverse industrial tenants.

Market overview (Cushman & Wakefield Q4 2023 Raleigh Industrial Report)

Inventory: 55,795,729 SF
Vacancy rate: 8.6%
Absorption: -52,000 SF (in 2023)
Completions: 1,881,057 SF
Under construction: 4,050,697 SF
Key leases by tenant: Freight Company, Tecan US Inc
Largest submarkets: RTP/I-40 Corridor, Eastern Wake County, US 1/Capital Blvd

Crexi Insights

These are the most recent industrial lease and sales trends from Crexi Insights (as of April 2024):

For Lease (active)

Asking rate/SqFt (median): $17 per year
Median SqFt/listing: 14,500
Days on market: 342
Total listings on Crexi: 84 spaces

For Sale (active)

Median asking price: $1.79 million
Price/SqFt: $209
Asking cap rate: 6.2%
Days on market: 132
Total listings on Crexi: 16

Sales Comps (past 12 months)

Median sold price: $1.75 million
Sold price/SqFt: $197
Total sales volume: $277 million
Sold cap rate: 6.0%
Median SqFt sold/transaction: 7,250
Total SqFt sold: 1.41 million
Days on market (median): 100

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Raleigh Office Market

While the direct vacancy rate has remained stable, some submarkets in the Raleigh office market show signs of robust activity, while others grapple with occupancy losses. Leasing activity remains steady, with both consistent renewals and new leases. There is also a notable uptick in the average size of new leases compared to previous quarters, suggesting a gradual adjustment of demand for office spaces in the region.

Market overview (Cushman & Wakefield Q4 2023 Raleigh Office Report)

Inventory: 55,412,708 SF
Vacancy rate: 14.1%
Net absorption: -27,611 SF (in 2023)
Leasing activity: 2,655,337 SF (in 2023)
Under construction: 1,795,311 SF
Key leases by tenant: State of North Carolina, BioMerieux, Precision Bioscience
Largest submarkets: RTP/I-40 Corridor, Cary, Downtown Raleigh, West Raleigh

Crexi Insights

For the latest updates on the Raleigh office market, turn to Crexi Insights. Here is the detailed information on recent sales and leasing trends as of April 2024.

For Lease (active)

Asking rate/SqFt (median): $27 per year
Median SqFt/listing: 2,559 SF
Days on market: 358
Total listings on Crexi: 832 spaces

For Sale (active)

Median asking price: $1.49 million
Price/SqFt: $278
Asking cap rate: 6.7%
Days on market: 185
Total listings on Crexi: 42

Sales Comps (past 12 months)

Median sold price: $580,000
Sold price/SqFt: $276
Total sales volume: $320 million
Sold cap rate: 6.6%
Median SqFt sold/transaction: 2,100 SF
Days on market (median): 94

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Raleigh Retail Market

The Raleigh-Durham metropolitan area's retail market is experiencing vibrant growth and development, driven by strong economic fundamentals. Significant job additions and an expanding labor force drive consumer demand and retail occupancy. With modest construction activity and a low vacancy rate reflecting tight market conditions, the sector is seeing increased competition for premium retail space for lease in Raleigh.

Market overview (CBRE Q4 2023 Raleigh-Durham Retail MarketView)

Inventory: 42,838,302 SF
Vacancy rate: 6.2%
Net absorption: 262,616 SF (in 2023)
Under construction: 613,647 SF
Key leases by tenant: Nova Trampoline Park, Hobby Lobby, Bob’s Furniture, Nordstrom Rack
Largest submarkets: Cary, US 1/Capital Boulevard, Southern Wake, South Durham

Crexi Insights

Retail lease and sales trends from Crexi Insights (as of April 2024):

For Lease (active)

Asking rate/SqFt (median): $27 per year
Median SqFt/listing: 2,901 SF
Days on market: 286
Total listings on Crexi: 419 spaces

For Sale (active)

Median asking price: $3.03 million
Price/SqFt: $359
Asking cap rate: 6.0%
Days on market: 104
Total listings on Crexi: 45

Sales Comps (past 12 months)

Median sold price: $1.7 million
Sold price/SqFt: $382
Total sales volume: $360 million
Sold cap rate: 6.0%
Median SqFt sold/transaction: 3,655 SF
Days on market (median): 124

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Raleigh Multifamily Market

The multifamily market in Raleigh is seeing a shift in momentum. While tenant demand and rent gains remain healthy, increased supply pressures are leading to a minor rise in vacancies. This adjustment likely reflects a market recalibration, balancing robust renter interest and the number of new apartment deliveries in Raleigh.

Market overview (Northmarq Raleigh 4Q23 Multifamily Market Insights Report)

Total housing units: 930,873
Multi-unit inventory: 232,718 units
Vacancy rate: 7.5%
Average rent per unit: $1,573
Units delivered: 11,319
Under construction: 18,882 units
Recent sales transactions by property: The Reserve at Meadowmont $83.6 million, 501 Estates $70 million, NorthCity 6 $64.2 million, Shadowood $42.5 million

Crexi Insights

Here are the most recent multifamily Insights from Crexi (as of April 2024):

For Sale (active)

Median asking price: $2.4 million
Price/SqFt: $165
Price/Unit: $379,000
Asking cap rate: 6.1%
Days on market: 243
Total listings on Crexi: 5

Sales Comps (past 12 months)

Median sold price: $550,000
Sold price/SqFt: $223
Sold price/unit: $212,000
Total sales volume: $986 million
Sold cap rate: 6.6%
Total SqFt sold: 2.49 million
Days on market (median): 125

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Get more in-depth Raleigh market data with Crexi Intelligence.