February 11th, 2022
Each year, our industry experts evaluate and review the Raleigh, Durham, and greater Triangle commercial real estate market’s annual performance. We share activity and trends from the market data we analyzed and experienced in 2021 to activities we anticipate in 2022.
What are the key market drivers? How have the different real estate sectors performed?
In this segment, we interviewed Rob Griffin, Associate Director of Development & Land to share his thoughts on land trends.
To learn more about other property types click on office, flex, life science, healthcare, investment sales, retail, and warehouse.
The Triangle rolled into 2021 with a head of steam that just kept going… every week seemed to bring a new announcement for firms coming to the area, another accolade or superlative for the area (“Best of…”), or a new development being announced. All of which drove the interest in land here to a fever pitch.
SELLERS… SELLERS… SELLERS were the big winners of land this year. The demand for land, especially anything of size and location that would fit for multifamily, single-family, and industrial led to most listings receiving multiple offers. Depending on the site there may be dozens of offers in a manner of days. The seller wins in that kind of competitive environment.
Last year, we expected interest in our market to continue to grow in the national spotlight, but I believe I can fairly say that no one expected the feeding frenzy we’ve seen in the last 12 months.
The emergence of land acquisitions for life science throughout our region, not just limited to RTP and proximity to the local universities, was a significant factor in Triangle land sales in 2021, and there are no signs of it slowing going forward. Another new trend that hasn’t had the same level of media exposure is the single-family-for-rent product. This product is uniquely geared to address the impact of COVID and desire for space for those in between, or beyond, traditional apartment life and/or homeownership.
We have already witnessed growth expanding outward across our region with areas such as Wendell, Sanford, Knightdale, Fuquay-Varina, Mebane, and other smaller towns benefitting. What were bedroom communities a few years ago are quickly becoming growth areas and are now on developers’ radar screens. Raleigh and Durham have historically been the epicenters of development, but growth here has evolved to the regional level.
Ahead for 2022, we anticipate a very busy year for land planners, planning staff across the region, and closing attorneys! The growth is going to continue to surprise a lot of people as the demand for land, and the pricing it drives, starts pushing developers into areas previously believed to be too far away from the action.
The opportunities are driven largely by the use. For example, industrial is being pushed out of the RDU submarket as land prices get driven up by multifamily and life science users. That’s created wonderful opportunities for sellers, but it has also opened up new industrial opportunities in areas such as north Durham, Wendell, Mebane, and other areas along interstate corridors for industrial growth. The same can be said for many other product types – look at the recent flurry of new residential development in Harnett County and Lee County. As those communities grow and benefit from investors that could not, or would not, compete on land prices closer to Raleigh/Durham, those new rooftops will generate new commercial development opportunities for retail, services, medical office, and beyond.
The latest US Census data shows our area to have been one of the fastest-growing metros from 2019-2020 in the U.S. Due to this accelerated growth, two challenges the Triangle faces ahead are infrastructure and transportation. As demand pushes developers farther afield, the challenge is outrunning the utilities to serve them. If, and when, (fingers crossed) we emerge from Covid, our transportation network will be pushed beyond its intended capacity to get to/from work, shopping, and all the amazing things the Triangle has to offer.
Location, price, utilities, and jurisdictional reputation (what’s it like to work with a particular town or county).
No two deals are ever alike! Every site is different, every buyer’s needs are different, every seller’s goals are different. I love getting to meet new people, helping them with their real estate needs, and developing lasting relationships.
As you look ahead, planning your CRE goals for 2022, let our real estate advisors help guide you with insider market knowledge and experience.
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