Raleigh-Durham’s office market entered the year on a positive note as 2024 ended strong. Vacancy was largely flat in the fourth quarter, net absorption neared 300,000 square feet and move-outs were sparse. After years of uncertainty and short-term renewals dominating the landscape, companies are now committing to longer leases. Clarity around business drivers, a growing labor pool and new market entrants are all contributing factors to this decisive turn. Firms are confidently making long-term real estate decisions, bringing lease terms back to the five- to 10-year range.
While the vibrancy of the pre-pandemic era has not fully returned, data shows a steady recovery throughout 2024, and 2025 is poised to bring even stronger growth. In 2024, Raleigh-Durham welcomed several notable commitments from companies establishing a foothold in the market, like Jewelers Mutual, JTL and Amgen.
Leasing activity stayed strong through the fourth quarter, supporting the net absorption of nearly 160,000 square feet of office space over the course of the year. Rents have seen some downward corrections overall, but well-located, highly amenitized assets have retained rent stability.
Recent recommitments from major companies like Nutanix and Hitachi highlight the area’s enduring appeal. Vacancy closed out December at 17.3 percent but was highly dependent on submarket and asset class.
The North Hills area in Raleigh led market leasing in the second half of 2024. One North Hills Tower alone reported roughly 190,000 square feet of leases signed in 2024. The tower, which was built in 2024, exemplifies enduring tenant demand for high-quality assets in prime locations. Downtown Raleigh is also seeing this revitalization, with Smith-Anderson expanding its footprint by adding a full floor, taking approximately 18,500 square feet.
Raleigh-Durham continues to be a leading choice for companies seeking new locations, strategic expansions or regional headquarters. Interest from out-of-town firms remains strong, and local government officials are optimistic, citing increased activity and substantial investments in both human and business capital.
The latest Census data shows continued growth in Southern cities. Between 2022 and 2023, Raleigh’s population increased by 1.9 percent, making it the third fastest-growing big city in the United States. Durham ranked No. 12 on the same list. With an estimated 60 people moving to the Triangle every day, Raleigh ranked as the third best city in the nation to start a career in 2024. Companies seeking to establish a foothold in a growing city with a well-educated, growing population see value in choosing Raleigh-Durham. These trends provide positive momentum for office product entering 2025, setting the metro up for long-term benefits.
The faucet is back on in Raleigh-Durham’s office market — and it is no longer a drip or trickle. The region is poised for a sustained influx of deals in the year ahead, reinforcing its position as a hub for innovation, growth and opportunity. Long-term migration trends and the region’s growing reputation as a top destination for career opportunities provide a solid foundation for future expansion.
— By Ryan Toland, executive vice president of occupier services, Colliers Raleigh. This article originally appeared in the January 2025 issue of Southeast Real Estate Business.