Land Trends and Outlook

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 2024 to activities we anticipate in 2025.

What are the key market drivers? How have the different real estate sectors performed?

In this segment, we interviewed Rob Griffin, Director of Land Sales to share his thoughts on land trends.

To learn more about other property types click on office, flex, investment sales, retail, and warehouse.

What was unique about 2024? And were there any milestones for this property type?

My opening line to this question last year was: “As the Fed helped bring 2022 to a close under cloudy skies, 2023 was the year of the rain that followed.” Fittingly, 2024 was when the sun came out, and things started growing again. Although rates didn’t come down like everyone hoped, investors and developers have adjusted the best they can to the new normal and started looking for sites again. The “pencils down” era left gaps in development pipelines that need to be caught up.

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

Owners with the foresight to see trends and progress coming their way, and with the gumption to take on improving their land, either through rezoning, securing access to utilities if they had none, or even just doing some concept planning to help paint a picture of what’s possible. Those efforts make the path forward for buyers/developers much easier and make those sites immediately more attractive.

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

Build to rent development (townhomes, duplexes, detached cottages operated as a unified for rent community) has gained a foothold and is one of the single most common requests for sites. Growth will continue to follow along the 540 loop, US 1, I-87 and US 64, to the extent utilities can support it.

What do you anticipate for 2025?

Single family, build to rent and land buyers are likely to carry the lion’s share of the market in 2025 if the tariff issue doesn’t derail those industries. Multifamily developers are still in the mix but as sites get scarcer due to zoning and/or utility issues, some of the areas left to develop don’t have the area rental history needed to support underwriting.

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

Those developers, especially single family, willing to push beyond sewer served areas and explore package plants, private sewer and/or community septic are starting to unlock parts of the Triangle no one would have considered decades ago. Flowers Crossroads is a prime example. The proposed Conservancy at Jordan Lake is another that will become a regional level housing development. Neither with public sewer.

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

While utilities remain one of the single biggest challenges to development, the entitlement process has been thrown a loop since the passage of State Bill 382. It stripped municipalities of certain zoning powers and has disrupted local initiatives such as city-initiated rezoning efforts and UDO revisions. Some UDO updates in the works would have increased development density for certain landowners, making previously low density areas more attractive to development (and more valuable to the property owners).

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

Uncertainty at the federal level regarding tariffs, funding and building occupancy. They have the potential to depress industrial space need, reducing the demand needed to justify land acquisition for new development. The potential to drive building material pricing higher, such as lumber from Canada, will ripple across the single family, multifamily and build to rent markets. If developers see a light at the end of that tunnel, they’ll still need to navigate utilities and entitlements to deliver their respective product types.

What do you love about working with this property type?

Every deal is different, every client is unique, and every transaction has the potential to impact something – the look and feel of a neighborhood, a local economy, a seller’s financial security, you name it. It creates a desire to follow that site and/or client into the future to see how that impact turned out.

As you look ahead, planning your CRE goals for 2025, let our real estate advisors help guide you with insider market knowledge and experience.

Contact info for all our professionals can be found at
https://www.triprop.com/about/team/

Access our full market reports here
https://www.triprop.com/category/market-reports/

2024 Triangle Market Overview and 2025 Forecast: LAND