Real Estate Investing in Raleigh: A Rapidly-Expanding Market with a Solid Foundation
Downtown Raleigh has seen remarkable growth, with a solid base providing great news for investors. Image from Wikimedia Commons
Real estate investors often look at deep and complicated statistics, but sometimes, as is the case with a city like Raleigh, a simple eyeball test will tell you a lot of what you need to know. The growth of this key North Carolina city is evident, driven by a commitment to research, development, and technology. As recently as 2000, Raleigh was a fairly quiet town of around 275,000, but its population exploded over the last 15 years, growing by nearly 50%. This is now a booming metropolis with a solid economic foundation that has become a premier spot for real estate investors.
Raleigh is one of the posts of the Research Triangle, a nexus of education, technology, and science that includes Durham and Chapel Hill. It is a national leader in STEM jobs, in addition to being one of the nation’s most important cities for pharmaceutical research, banking, and telecommunications. It is home to many of America’s top companies and corporate headquarters. The Raleigh economy is driven by brain power, and that drives the real estate market, resulting in a new urban hub that’s ready for the smart investor.
Real Estate Investing in Raleigh: Understanding the City
When investing in Raleigh, it is important to know what makes the city grow, and what drives its real estate market.
It’s a capital city. Raleigh starts off with an advantage as the capital city. As the heart of the region’s government, it already has a large and educated population, as well as enough non-permanent residents to keep the rental market fresh.
- Raleigh has a solid economic foundation. Raleigh has long been the key city for regional shipping, making it important in the textile industry. Along with its university and scientific background, these industries have kept Raleigh on a firm economic footing, which paved the way for future growth.
- Growth begins at the STEM. Raleigh is the #1 city in America for job growth in STEM (science, technology, engineering, mathematics) jobs. This is coupled with a huge boom in the biotech industry. Raleigh acts as a magnet for high-income earners in the most important and rapidly-growing fields. It trails only Austin for highest job growth in tech startups.
- A population explosion changes the urban environment. Raleigh was long-known for being a city of sprawl, with people moving further and further away from the city center. That is no longer the case. Downtown Raleigh is growing, starting with condos and apartments, and involving mixed-use and multi-family construction. Restaurants and retail have helped lure people back downtown and businesses have followed. All in all, Raleigh expects to see continued growth for both commercial and residential space in the downtown area and auxiliary neighborhoods.
- The rental real estate market keeps bringing people in. Raleigh is considered the 6th-best rental market in the US, with a solid and steady vacancy rate of 4.8% during the first half of 2015. This consistently low vacancy rate, combined with a steadily increasing population base has resulted in substantial yet steady development of for rent housing.
- The commercial market is tightening. As businesses flood into Raleigh, the commercial market has tightened, raising prices and encouraging new development. Nearly two million square feet of commercial development is currently in process, of which almost 80% has been leased prior to completion.
Raleigh is going to continue to attract both residents and businesses. As a small city adjusts to becoming a major center of economic activity, investors who want to rehab old buildings and build new mixed-use multi-family structures have a chance to get in on the ground floor.
Key Neighborhoods in Raleigh
At Origin Capital, we look for the key neighborhoods that are on the verge of growth in order to find the best returns for our partners.
Downtown/Central Business District: Once quiet after 5:00PM, the CBD of Raleigh has grown in the last decade to become a hub of residential, restaurant, and retail life. The city expects 3,000 more downtown residents in the next year, which means growth is continuing.
- West Raleigh: A historic district near the capital, West Raleigh is home to many students and faculty from North Carolina State University. This neighborhood is growing in popularity as a startup haven as well, which is attracting both businesses and residents.
- Cary: Outside of Raleigh proper, Cary is already the 7th-largest city in North Carolina and is still growing. It is becoming a hub for businesses and people who want to move away from the hubbub of the city.
- Durham: Another corner of the Research Triangle, Durham is home to Duke University and a thriving R&D field. It is following in Raleigh’s footsteps and is considered a great investment in its own right.
- Research Triangle Park: One of the largest research parks in the world, this area to the northwest of downtown attracts businesses and residents in the all-important STEM fields. As these fields continue to grow, so will the Park and the areas around it.
- Durham: Another corner of the Research Triangle, Durham is home to Duke University and a thriving R&D field. It is following in Raleigh’s footsteps and is considered a great investment in its own right.
Raleigh is not just the capital of North Carolina – it’s also one of America’s growth capitals. It has a great economic infrastructure with solid fundamentals, and the city has built on that foundation to become a magnet for important and always-growing fields. In short, it has everything a real estate investor could want.
At Origin Capital, we understand Raleigh and we know how to ensure the highest returns. We know how the city is changing and we use our unparalleled area knowledge to find the opportunities which will continue to capitalize on this growth. Our comprehensive research is how we bring high returns to our investors. Let Origin Capital be your partner in the Raleigh real estate market.
If you are a real estate investor looking to broaden your portfolio and join other investors in major developments in Raleigh or other markets, Origin Capital Partners would be excited to work with you. At Origin Capital Partners, we have a powerful connection with the cities we invest in and we understand what makes them tick. We know which areas are booming and which commercial and residential investments will make the most sense moving forward. Our Funds deliver consistent returns, because we know how to make sense of the real estate market. Contact us today to talk about how your investments can grow with the city.
- Cary: Outside of Raleigh proper, Cary is already the 7th-largest city in North Carolina and is still growing. It is becoming a hub for businesses and people who want to move away from the hubbub of the city.
