Raleigh-Durham investment real estate market report

1Q 2022

The opening months of 2022 were active for the Raleigh-Durham investment market, with transaction volume reaching $2.3 billion.

Unrelenting demand fueled another stellar quarter for multifamily, with $1.5 billion in property trading hands. Record-setting occupancy and rent growth are driving strong demand for both trophy properties and value-add opportunities.

Industrial volume totaled $585 million in the first quarter. Life science once again contributed to this activity with the $80 million sale of The Labs at Research Triangle Park. Historically low vacancy and strong tenant demand are driving increased construction activity, opening up investment opportunities for both traditional industrial product and R&D/Flex properties.

Office sales slowed in the first quarter following a blockbuster performance in the second half of 2021. Volume totaled $198 million, with the largest deal being the $92 million sale- leaseback of Credit Suisse’s RTP office building. Raleigh-Durham’s office market is showing increasing signs of life as more companies re-enter the workplace. First-quarter leasing activity was up 36% year-over-year, and rents continue to see upward movement.

Retail volume was relatively light at $105 million for the quarter, but investor demand has rebounded in recent months. The local retail sector has gained significant traction, with tenant demand strong and vacancy back to pre-pandemic levels.

Robust local economic and population growth should keep investor demand for properties in the region strong throughout 2022, but headwinds such as rising interest rates, inflationary pressures and general uncertainty concerning the U.S. economy may push cap rates higher and lead to some moderation in sales activity.

Download the full Raleigh-Durham Q1 2022 Investment Report

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