Raleigh-Durham Commercial Office Space for Rent

Q4 2025

Raleigh-Durham Commercial Real Estate Market Report

Focus: Q4 2025 Market Trends

Executive Summary

The Raleigh-Durham commercial real estate (CRE) market in late 2025 is defined by robust expansion in the Industrial and Retail sectors, while the Office and Multifamily markets work to absorb significant new inventory [2, 3]. Office leasing has stabilized with positive absorption in Class A Downtown assets, though overall vacancy remains elevated due to life science pullbacks [1, 4]. Industrial momentum accelerated in Q3, with net absorption climbing to nearly 2.8 million SF [2]. Retail fundamentals are tightening, with vacancy rates dropping to 2.34% amid strong consumer demand [5]. Multifamily is digesting a record supply wave, yet absorption remains high, keeping vacancy manageable [7, 8].

TenantBase Proprietary Data [11] highlights the distribution of active tenant demand over the last 90 days (226 total deals):

  • Retail/Storefront dominated market activity with 63.27% of all searches [11].
  • Warehouse was the second most active sector at 22.12% [11].
  • Office accounted for 15.04% of total search volume [11].

Office Market

Market Overview The Raleigh-Durham office market is showing signs of a "measured recovery," particularly in the downtown core where a flight to quality is driving positive net absorption [1, 4].

  • Vacancy & Availability: The overall vacancy rate declined slightly to 23.3% in Q3 2025, the first decrease in eight quarters [3]. Downtown Raleigh’s Class A vacancy remains much tighter at 13.7% [4]. Life Sciences vacancy, however, rose to 32.4% due to sublease additions [3].
  • Net Absorption: Class A office space in Downtown Raleigh recorded positive net absorption of 43,785 SF in Q3, contributing to a year-to-date total of over 132,000 SF [4].
  • Rental Rates: Average asking rents for Class A space held steady at $39.72 per SF in Downtown Raleigh [4].
  • Market Drivers: Leasing activity totaled 0.7 million SF, consistent with 2024 levels, driven by technology and media firms [1]. Sublease availability declined by 0.7 million SF year-over-year, signaling the market is slowly stabilizing [1].

TenantBase Activity [11]

  • Demand Share: Office accounted for 15.04% of total search volume [11].
  • Lease Term Preference: Demand is polarized between very short-term flexibility and standard mid-term commitments [11]:
    • Less than one year: 44.12% of deals [11].
    • 2-3 Years: 20.59% of deals [11].
    • 3-5 Years: 20.59% of deals [11].
  • Size Requirements: Tenants seeking short-term space have substantial footprint requirements. The average lower SF required for a Less than one year term is 3,125 SF, compared to 2,750 SF for a 3-5 Years term [11].

Industrial & Warehouse Market

Market Overview Raleigh’s industrial sector remains a regional powerhouse, with net absorption accelerating in late 2025 as tenant demand keeps pace with new deliveries [2].

  • Vacancy & Rent: The vacancy rate edged down to 6.75% in Raleigh, while Durham saw a slight uptick to 8.0% [2]. Average asking rents held firm at $12.57 per SF NNN in Raleigh, with Durham averaging $11.56 per SF [2].
  • Demand & Supply: Net absorption climbed to 2.78 million SF in Raleigh and 2.42 million SF in Durham in Q3 2025 [2]. The construction pipeline expanded to 3.4 million SF in Raleigh, signaling continued developer confidence [2].
  • Investment: Sale prices advanced to $146 per SF in Raleigh, with cap rates compressing to 7.84%, underscoring robust investor appetite [2].

TenantBase Activity [11]

  • Demand Share: Warehouse accounted for 22.12% of total search volume [11].
  • Lease Term Preference: Demand is heavily concentrated in the 3-5 year range [11]:
    • 3-5 Years: 40.00% of deals [11].
    • 2-3 Years: 25.00% of deals [11].
    • 1-2 Years: 20.00% of deals [11].
  • Size Requirements: The average lower SF required for a 3-5 Years term is 6,500 SF, while the 5+ Years term average requirement significantly jumps to 25,000 SF [11].

Retail Market

Market Overview Retail fundamentals in Raleigh-Durham are strengthening, with net absorption increasing and vacancy rates hovering near historical lows [5].

  • Vacancy & Availability: Raleigh’s retail vacancy rate dropped to 2.34% in Q3 2025, while Durham reported 2.45% [5].
  • Net Absorption: The Raleigh market absorbed 476,958 SF in Q3, up significantly from the previous quarter [5]. Durham saw slight negative absorption due to lack of available quality space [5].
  • Rental Rates: Average NNN asking rents reached $27.94 per SF in Raleigh and $24.67 per SF in Durham [5].
  • Construction: Construction activity nearly doubled in Raleigh to 624,958 SF to meet growing demand [5].

TenantBase Activity [11]

  • Demand Share: Retail/Storefront activity dominated with 63.27% of all search volume [11].
  • Lease Term Preference: Retail tenants show a decisive preference for long-term stability [11]:
    • 5+ Years: 29.23% of deals [11].
    • 3-5 Years: 24.62% of deals [11].
    • 2-3 Years: 16.92% of deals [11].
  • Top Locations: Tenant interest is highest in the following hubs (deal counts) [11]:
    • Raleigh: 19 [11].
    • Durham: 18 [11].
    • Cary: 16 [11].

Multifamily Market

Market Overview The multifamily market is navigating a supply peak, with developers delivering nearly double the national pace of new units relative to inventory [8].

  • Vacancy & Occupancy: Vacancy improved by 30 basis points to 7.7% in Q3 2025, with stabilized occupancy holding steady at 94.0% [7, 8].
  • Rents: Average asking rents softened slightly (-0.3%) to $1,553 per month as owners prioritize occupancy [8].
  • Construction: Over 8,500 units came online year-to-date, but the pipeline is contracting, with starts declining significantly from 2024 peaks [7, 8].
  • Demand: Absorption remains robust, with more than 19,400 units absorbed across the region since the start of 2024 [7].

2026 Outlook

Looking ahead to 2026, the Raleigh-Durham market is positioned for sustained growth driven by migration and tech sector expansion.

  • Housing Rebound: With the supply-demand balance improving, home prices in Wake County are forecast to rise 3-5% in 2026, while multifamily rent growth is expected to turn positive as deliveries slow [9, 10].
  • Industrial Strength: Rents are projected to rise 4-5% in 2026, with vacancy remaining tight at 6-7% as manufacturing and logistics sectors expand [9].
  • Office Stability: Vacancy is expected to stabilize at 10-12% for competitive assets as hybrid work patterns normalize and new tech demand absorbs recent deliveries [9].

Sources

  1. Savills: Raleigh-Durham Q3 2025 Office Market Report
  2. Lee & Associates: Q3 2025 Raleigh, NC - Industrial
  3. Cushman & Wakefield: Raleigh MarketBeats Q3 2025
  4. Downtown Raleigh Alliance: Q3 2025 Market Report
  5. Lee & Associates: Q3 2025 Raleigh, NC - Retail
  6. Cushman & Wakefield: US Retail MarketBeat Q3 2025
  7. Northmarq: Vacancy Levels Off as New Multifamily Construction Starts Decline in Raleigh-Durham
  8. Yardi Matrix: Raleigh Multifamily Market Report – November 2025
  9. JRH Engineering: 2026 Forecasted NC Real Estate Development Report
  10. Martini Mortgage Group: Raleigh Housing Market 2026 Forecast
  11. TenantBase Proprietary Market Data (Raleigh - Last 90 Days)

Information in this report is aggregated from various third-party sources and synthesized using artificial intelligence and other research tools. While we believe these sources to be reliable, we cannot guarantee the absolute accuracy or completeness of the data. This report is intended for informational purposes to provide market insight and should be independently verified prior to any use in a real estate transaction or legal commitment.