Q2 2025 MARKET REPORT
DOWNTOWN RALEIGH
SUMMARY AND HIGHLIGHTS:
Downtown Raleigh continues to grow, with 12 developments under construction that will deliver 953 residential units, 204 hotel rooms, and 13,593 square feet of retail space upon completion.1 An additional 39 projects have been proposed or are in planning and when complete they will add 7,250 residential units, 1,412 hotel rooms, 368,392 square feet of office and 257,450 square feet of retail space.
Through Q2 2025, 819 apartment units have delivered while another 675 units are poised to deliver before the end of the year 1 The 306-unit Highline Glenwood apartments, phase one of the Creamery site in Glenwood South, has begun site preparation and is expected to move into construction later on this year. Stabilized apartment occupancy* is 92.1% and average asking rent per unit is $1,935, up +2% since the start of the year.2
The second quarter saw 18 new storefront businesses open and 10 close for a net gain of +8 storefront businesses.1 An additional 26 storefront businesses have announced they will be opening in the near future. Recent development activity has added over +44,000 square feet of new retail space since the start of the year.
819 RESIDENTIAL UNITS DELIVERED1 2025 YTD
+44,293 SF NET ABSORPTION CLASS A OFFICE3 Q2 2025
12 Q2 2025 DEVELOPMENTS UNDER CONSTRUCTION1 1DRA 2CoStar 3JLL
*Stabilized occupancy does not include recently completed projects
Photo: Downtown Raleigh skyline facing Northeast Credit: Bryan Regan
The average asking rent for Class A office space in Downtown Raleigh is $39.54 per square foot, with a direct vacancy rate of 14.1%. Net absorption for Class A space was +44,293 square feet in the second quarter. BuildOps, a growing tech firm based in Los Angeles, recently announced their selection of Downtown Raleigh for a 291-job expansion after considering multiple cities.
Year to date, total food and beverage sales in Downtown Raleigh are up +4.2% compared to the same period last year, with the Glenwood South and Fayetteville Street districts seeing increases of +12.7% and +7.6%, respectively.2 Between April and May, Downtown Raleigh averaged $27,830,313 in food and beverage sales, a 3.3% increase compared to the same period last year.
Q2 2025 visitor visits to Downtown Raleigh were +4.2% higher than in Q2 of 2024 while Fayetteville Street saw a +4.7% increase over the same period.3 Total visitor visits to Downtown Raleigh in the first half of the year have increased +2.5% compared to the same period last year, with Glenwood South seeing the largest increase at +6.5%.
Average monthly hotel room revenue between April and May was +3.6% higher than the same period last year.2 Year to date, hotel room revenue in Downtown Raleigh is up +9.4% compared to the same period last year. 1,616 hotel rooms are proposed or in planning.
Notable property sales in the quarter include the North Carolina Association of County Commissioners purchasing the Reynolds Building at 316 W Edenton Street for $15.9M. The building has 31,137 square feet of rentable office space and will serve as their new headquarters. 327 Hillsborough Street sold in June for $6.8M, the 0.79-acre parcel sold for $8.6M per acre.
*This Q2 2025 Market Report report is abridged in advance of the 2025 State of Downtown Raleigh report which will be released in August 2025.
DEVELOPMENT UPDATES:
+44,293 SF
NET ABSORPTION
Class A office space Q2 20251
+7,250 Planned or proposed Q2 20253 RESIDENTIAL UNITS
+3.3%
Food & beverage sales year over year April & May3 INCREASE
+4.2%
Q2 2025 visitor visits downtown year over year3 INCREASE
+4.7%
Q2 2025 visitor visits Fayetteville Street year over year3 INCREASE
+3.6% INCREASE Hotel room sales revenue year over year April & May 2
1JLL 2Wake County 3Placer.ai
4CoStar
Overall, there is $8.2 billion of investment in the current Downtown Raleigh development pipeline.1 This includes an estimated $3.1 billion in projects completed since 2015, 1.3 billion in projects under construction, and $3.8 billion in proposed or planned developments.1
$3.1 Completed (since 2015) BILLION $1.3 Under Construction as of Q2 BILLION $3.8 in Site Preparation/ Proposed/Planned Developments BILLION $8.2 Completed since 2015, Under Construction, and Planned Developments BILLION
Gipson Play Plaza Opens
Gipson Play Plaza in Dorothea Dix Park opened to the public on June 6th. The $70M investment is the newest addition to Dorothea Dix Park, transforming 18.5 acres of the park into a world-class destination. As the largest adventure playground in the Southeast, the park has many features including a sensory maze, swing terrace, water play mountain, and sprawling adventure playground made for kids of all ages. The park also features a picnic grove, gardens, and a grand plaza.
Alexan Moto Delivers
Alexan Moto at 222 N West Street, a $63M seven-story development in Glenwood South, has delivered 186 studio, 1 and 2 bedroom apartments. Amenities include a clubroom with entertainment bar, booths, game room, and direct access to an outdoor terrace with a fireplace and grills. The building also features a pool and twostory coworking lobby.
The Depot Announced
The recently announced The Depot development at 327 W Davie Street will feature a 170 room boutique hotel, rooftop bar, 30,000 square feet of retail, and 20,000 square feet of office space, all while preserving the historic 1912 depot building.
Image: rope bridge at Gipson Play Plaza Credit: Visit Raleigh
Image: the Alexan Moto entrance Credit: Trammel Crow Residential
Image: The Depot Credit: LODEN Development
CONTACT FOR QUESTIONS:
Gabriel Schumacher Director of Research
Downtown Raleigh Alliance gabrielschumacher@downtownraleigh.org
*This Q2 2025 Market Report is abridged in advance of the 2025 State of Downtown Raleigh report which will be released in August 2025.
Photo by Patrick Maxwell