‘Magnet’ metropolis: Triangle ranks No. 1 in study for real estate, development opportunities

RESEARCH TRIANGLE PARK – Commercial and residential real estate across the Triangle continues to flourish despite the COVID-19 pandemic as visual proof of new office towers under construction (and many more planned) as well as home construction where former fields for crops are being turned into subdivisions. And a new study affirms what people are seeing.

According to a new study from the Urban Land Institute, the Raleigh-Durham ranks No. 1 in multiple categories – ahead of such rivals as Austin, Texas, and Charlotte. Scores of cities were studied based on multiple data points and included industry expert interviews for the 42nd Emerging Trends in Real Estate report.

While the Triangle regularly ranks well in economic development reports such as best places to live and work, the Urban Land Institute report takes a broad view of home and business data in forecasting where real estate action is expected to be hottest for the foreseable future.

“The pandemic has been an equalizer; our focus is on identifying the markets that will lead in the next normal,” the authors of the report say. Many of the findings boost the Triangle.

One example: Raleigh-Durham is listed as a “Magnet” city along with its two rivals, the three metros attracting workers from larger urban areas seeking a safer, less population dense place to live in these days of social distancing.

The Triangle also remains a so-called “18-hour city,” i.e. active night life and entertainment even as COVID-19 limits many activities.

“The 18-hour cities are popular in-migration destinations due to lifestyle, culture, and employment opportunities,” the study explains.

“They are not necessarily inexpensive markets but are more affordable than the establishment markets, from which they draw many newcomers. The dynamic economies of these markets continue to make them popular with developers and investors for 2021—as illustrated by the five of the 10 highest-ranked markets in overall real estate prospects that fall into this category: Austin, Charlotte, Nashville, Raleigh/Durham, and Salt Lake City.”

The Triangle ranks:

No. 1 for overall real estate prospects
No. 1 for homebuilding prospects
No. 1 in development/redevelopment opportunities
No. 1 in Buy/Hold/Sell recommendations in real estate
No. 1 in Buy/Hold/Sell recommendations for multi-family properties
No. 2 in Buy/Hold/Sell recommendations for office properties (No. 1 is Salt Lake City)

In each of these categories, Austin and Charlotte ranked consistently in the top 10 – indicators of how keen the competition is for employee talent and development.

Austin, however, did rank first for investor demand while the Triangle placed sixth. The Texas capital’s economy also ranked No. 1 with the Triangle coming in third and Charlotte 5.

Raleigh-Durham also fell well short of Austin in public/private investment capital as well as available debt and equity capital.

An unclear “new normal”

The report’s authors concede, however, that gathering data for a study in the pandemic was challenging and that its long-term impact remains unclear.

“COVID-19 is one of the biggest health, economic, and society-changing events of the past century,” they wrote. “The long-term impact on local markets has been hard to pin down, since hot spots and infected areas have spiked and waned since the pandemic started in early 2020.”