2025 Triangle Market Overview and 2026 Forecast: FLEX

February 6th, 2026

Flex Trends and Outlook Jimmy Barnes NAI Tri Properties

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 2025 to activities we anticipate in 2026.

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

In this segment, we interviewed Jimmy Barnes, SIOR, Executive Vice President to share his thoughts on flex trends.

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

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

The commercial real estate market continues to have challenges relating to a slowing economy, rising interest rates, credit tightening, and lingering effects from the work-from-home period. However, the Triangle Market continues to be one of the Nation’s top performers. Population growth, geographic location, transportation, universities, quality of life, and a reasonable cost of living continue to be key market drivers. The office market continues to struggle with historically high vacancy and minimal absorption. Maturing loans combined with high vacancy and rising interest rates will create additional problems for some owners. Meanwhile, there also continues to be a lack of supply of single-family homes, and although the multifamily market has seen an uptick in vacancy, it remains healthy. The industrial and flex sector continues to be the bellwether as activity, although not “white hot” as it was 36 months ago, remains strong.

What was unique about 2025?

And were there any milestones for this property type?

During 2025, the Flex sector strengthened as the as the Triangles rising population and job growth fueled demand. Trade services like HVAC, plumbing, and electrical are benefiting from expansion in these growing sectors, which support the broader economic base with remaining activity the broader economic base with remaining occupiers Additionally, new availabilities in emerging submarkets created valuable opportunities for companies looking to grow.

As the Triangle’s population and job base expanded, Flex requirements from service provides grew in tandem, driving both leasing activity and the need for small-bat, service-oriented facilities. Vacancy rates fluctuated only slightly, between 7.5% and 8.5%, with East Wake County and Southwest Wake County submarkets outperforming the broader market, such as areas anchored by stabilized industrial and flex assets that saw strong investor demand, including Triangle 55 and Knightdale Gateway.

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

Biotech and R&D firms needing turn-key lab space, tech/engineering users requiring modern flexible space, and firms moving into first-generation spaces were among the clear winners for flex users. Despite overall flex softness, small-bay industrial remained the tightest segment of the entire industrial market, with vacancy near 5%., well below the national industrial average.

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

While not new, Southeast Wake County continues to outshine surrounding markets with a 3% vacancy rate and positive absorption. Marritt Properties, Wigeon Capital, and Greenberg Gibbons have led the new Flex construction in this market. Tenants looking for first-generation space were welcomed with a wealth of new options to choose from. Outdoor storage for products and service vehicles continues to be a premium spot for many users. Zoning restrictions do affect the availability from some perspectives.

While not new, Southeast Wake County continues to outshine surrounding markets with a 3% vacancy rate and positive absorption. Marritt Properties, Wigeon Capital, and Greenberg Gibbons have led the new Flex construction in this market. Tenants looking for first-generation space were welcomed with a wealth of new options to choose from. Outdoor storage for products and service vehicles continues to be a premium spot for many users. Zoning restrictions do affect the availability from some perspectives.

What do you anticipate for 2026?

Growth areas for Flex property types will continue in 2026 within the Eastern Wake submarket, as well as the US-1 South corridor toward Sanford. Any new developments could be successful.

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

Opportunities exist for new development south of Wake County, down US 1 toward Sanford. Any useful location will be successful if numbers can “pencil out.”

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

2026 will continue to see positive absorption overall and minimal vacancy rate movement as new construction continues. Rental rates will level off after unprecedented increases over the last several years. Flex users will enter a more tenant-friendly phase as new construction is completed.

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

With limited new supply, most opportunities remain concentrated in the Southeast Submarket, from Wendell through Holly Springs and along the US-1 / Sanford corridor. Land availability and elevated construction costs continue to challenge new developments in 2026, pushing rental rates higher and making expansion or relocation difficult for some users. As a result, location and pricing remain the primary decision-drivers for tenants.

With flex vacancy ending in 2025 at roughly 8%, elevated availability in 2026 will directly influence leasing strategy, rental rates, and capital planning. Tenants will gain leverage, compelling landlords to offer more competitive concessions and stronger TI packages to secure deals.

What do you love about working with this property type?

Flex is one of the most dynamic and resilient property types in commercial real estate. It sits at the intersection of industrial, research and development, lab, and service uses, offering unmatched adaptability. That blend of imagination and functionality makes the work both interesting and rewarding.

As you look ahead, planning your CRE goals for 2026, let our real estate advisors help guide you with insider market knowledge and experience.

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