This article was written for our sponsor, CBRE Raleigh
The records for land sales volume in Wake County continue to be broken and there is no end in sight for demand. Local developers continue to see opportunities for growth and new developers are entering the market from other parts of the country, impacting the cost and availability of land in the Triangle.
“The cost of land has gone up tremendously in the last three to five years and more importantly, land is scarce, especially in the inner city and Raleigh-Durham metro areas,” said Barry Bowling, Director of Land Services and Partner with CBRE|Raleigh. “For the first time in my career, and I have been doing this for over thirty years in the Raleigh-Durham market, it appears that there is a finite amount of available land,” said Bowling. This has led to developers looking further out from the core areas of the Triangle to find areas where they can build more affordable housing developments. Some of the areas in which CBRE|Raleigh has seen growth include Chatham County, Johnston County, Lee County, and the northern counties of Franklin and Granville.
“The desire to provide more affordable housing means you have to go out further from the Triangle to get cheaper land,” said Bowling. In his opinion, one of the things that allows this outward expansion is the well-developed transportation infrastructure in the region. “It’s a testament to the NCDOT and local municipalities; the road infrastructure in our area is exceptional,” he said. This means that the distance from employment centers is not always the first thing a developer will look at, with the actual drive time being more important. Additionally, affordable housing is also a major issue across the country. “It depends on where you are looking at development, but I do see a big push by municipalities to include affordable housing,” said Bowling.
Much of the demand is being driven by population growth within the Triangle. People moving to the area are seeking a lower cost of living than other metropolitan areas or looking to take advantage of significant job growth. “If you look at the population increase, Wake County is growing by 67 people per day. The one thing we witnessed since the pandemic is job growth. And with the major announcements we have seen from large companies coming to the area, it has been possibly the largest economic growth in North Carolina’s history,” said Bowling. This surge of large companies to the area is due to the Triangle’s skilled workforce graduating from our top three tier one research universities located here as well as highly-skilled talent being brought in from across the country.
The rise in the scarcity of land can also be attributed to COVID-19. “Once the pandemic hit, a large group of people realized living in an apartment was not necessarily how they wanted to live, and it led to two large dynamics. First, people wanted to get out of urban areas since they could work remotely and second, some realized they didn’t want a small apartment but would rather have their own space which resonated in a surge in residential land purchases,” said Bowling.
Beyond housing, there is the growing development of industrial and commercial spaces. There is an increased focus on industrial development for life sciences companies, a growing market segment that has seen impressive growth. This includes labs and research development, which Bowling says is “clean and attracts high-skilled labor to and from the area.” There are also significant investments from clean energy companies, some with a focus on the electric vehicle market.
With this growth, Bowling feels that mass transit remains an important issue for the future of the Triangle, with other cities having a much more developed mass transit infrastructure. “If we could make greater progress on mass transit in the future, cutting down commute times even more, that would create another advantage for our market to draw developers in,” said Bowling.
For land developers, the Triangle region provides attractive opportunities on multiple fronts, including residential, commercial, and industrial. The area has a growing population and an attractive business environment that is driving an influx of companies and people to support continued development. The challenge lies in where to put newer buildings, and many developers are moving further out from the Triangle’s typical submarkets to acquire cheaper or larger quantities of land.
This article was written for our sponsor, CBRE Raleigh
