Raleigh’s rental rates hit new record high as flight-to-quality persists
The Raleigh-Durham office market continued to favor premium product in Q1 2025, driving rental rates to new highs even as availability increased slightly. Class A asking rents hit a record $31.76 per square foot (psf), up 3.6% year over year, while the overall average rose 2.9% to $30.14 psf. This growth reflects the ongoing flight to quality, with tenants consolidating into high-performance, amenity-rich buildings in mixed-use or highly connected locations. Meanwhile, availability increased to 22.6%, up 40 basis points (bps) from Q1 2024, as older inventory struggles to compete. Sublease space declined 4.6%, but overall availability remains elevated compared to pre-pandemic levels, reflecting a market still adjusting to shifts in workplace strategy. Nearly half of the first quarter’s top leases were renewals while trophy assets captured half of all relocations, reinforcing the market’s deepening divide between top-tier and legacy space.