2023 Triangle Market Overview and 2024 Forecast: LAND

February 16th, 2024

Land Trends and OutlookRob Griffin NAI Tri Properties photo

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 2023 to activities we anticipate in 2024.

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, flexinvestment sales, retail, and warehouse.

What was unique about 2023? And were there any milestones for this property type?

As the Fed helped bring 2022 to a close under cloudy skies, 2023 was the year of the rain that followed. Land deals across most sectors were put to the test as landowners held on to the promise and pricing of 2021-2022 while buyers struggled to get lenders’ waning approval. Lender requirements to close, from more buyer equity to complete permit packages in hand, led to a year of deal extensions and triage.

Who were the big “winners” in this property type?

To be honest, the typical buyer/seller answer would be a challenge for 2023, given the economic headwinds. If anything, I think that our market’s strength, stability, and attractiveness made our region the winner. Buyers were willing to go to extraordinary lengths to make deals work (or to keep them alive, at least) last year, and new parties interested in our area continued to emerge; it is hard to argue that the region’s fortitude didn’t help everyone through 2023.

Do you see any new emerging trends? Where do you see growth occurring?

Densification and infill development will continue, especially in under-utilized suburban areas, while growth will continue to push out along corridors such as US 1, US 64, 401, and I 87, turning what most felt were rural areas prior to Covid into development hot spots.

What do you anticipate for 2024?

Longer contract terms are likely here to stay as tighter lending markets are forcing buyers to get most, if not all, permits in hand in order to close. It’s an unfortunate delay for sellers wishing to unlock value in their real estate; however, permitting delays continue to get longer, so buyers have no option, in many cases, except to negotiate time to “insure” their deals with complete approvals in hand prior to closing.

Where do you see opportunities in your property type for Raleigh, Durham, and the greater Triangle?

Opportunities will follow utilities and transportation, plain and simple. We’ve seen that with industrial along the I 40/I 85 and US 64 corridors and with single-family in municipalities with utility capacity (Sanford, Lillington, etc.). Those areas that have planned ahead for growth through their transportation and utility plans will continue to be the belles of the ball.

In our market, what challenges are there in this property type?

There’s no avoiding repeating last year’s sentiments here – utility capacity and entitlement timelines. When hotbed communities project capacity backlogs until 2026 or 2027, in some cases, we will struggle to keep up with demand. Entitlement timelines have grown from being discussed in terms of months to in terms of years, and that’s a challenge for many sellers, anxious to monetize their land wealth, to understand when buyers make offers that include time for entitlements.

What factors are you seeing drive CRE decisions in this property type?

While utility availability and long entitlement lead times play into the land business, supply, interest rates, and the return-to-work discussion also play into the demand for land. Multifamily supply has leveled off rents in many places, leading to a cooling in multifamily interest in some submarkets. Interest rates impact single-family home sales (and development). The continued influx of new residents has helped keep the two former sectors moving. The return-to-work discussion impacts office leasing and development, which, outside of healthcare/MOB, has been virtually nonexistent in the last few years.

What do you love about working with this property type?

I love the different challenges that each piece of land and each deal brings. I love helping build and develop the knowledge and tools the team needs to get each and every land deal across the finish line, from the clients to the vendors, engineers, architects, legal team, municipal planning staff, and civic leaders necessary to get there.


As you look ahead, planning your CRE goals for 2024, let our real estate advisors help guide you with insider market knowledge and experience.

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