Economy
Raleigh-Durham’s industrial market continued to attract significant corporate investment in Q3, supporting long-term industrial and logistics demand. Caterpillar announced plans to invest $1.0 billion in a new manufacturing facility in Lee County, creating 600 jobs, while Steris unveiled a $600.0 million investment that will bring an additional 335 jobs to the same county. Labor market fundamentals remained favorable, with Raleigh-Durham ranked third for annual nonfarm employment growth among the more than 100 major U.S. metros tracked by Cushman & Wakefield Research. Continued employment growth and corporate expansion are expected to support industrial demand in the quarters ahead.
Demand
Demand remained strong as net absorption totaled more than 1.1 million square feet (msf) in Q3, bringing the year-to-date (YTD) total to nearly 1.7 msf. Vulcan's 500,000-square-foot (sf) move-in at Crosspoint Logistics Center drove much of the quarterly gain, helping Johnston County lead all submarkets in occupancy gains. Eastern Wake County followed with more than 363,000 sf of positive absorption, supported by occupancies from Siemens and Mygrant Glass. Of Raleigh-Durham’s 20 submarkets, 15 recorded positive or flat absorption during the quarter, as supply and demand were balanced across much of the market. Large requirements remained a significant driver of activity as nine tenants occupied spaces exceeding 50,000 sf during Q3.
New leasing volume totaled more than 1.2 msf, bringing YTD activity to nearly 4.3 msf, 30.5% above the total for the same period in 2025 and 18.5% above the market's five-year average. This was bolstered by 10 new leases in Q3 of 50,000 sf or larger, four of which exceeded 100,000 sf. Following a Q2 slowdown, renewal activity rebounded with nearly 110,000 sf of existing leases renewed, including just the second tenant of 2026 larger than 50,000 sf to recommit to its existing location.
Supply
Overall vacancy declined 10 basis points (bps) quarter-over-quarter (QOQ) to 9.5% in Q3 as strong occupancy gains slightly outpaced the significant amount of new speculative space that delivered vacant during the quarter. Several submarkets recorded significant improvements in vacancy with Johnston County dropping the most–390 bps QOQ to 5.8% overall–driven by Vulcan’s 500,000-sf occupancy at Crosspoint Logistics Center. The Falls of Neuse submarket followed with a 370-bp decline to 4.8% following J.B. Hunt's occupancy of more than 106,000 sf. Conversely, several submarkets experienced vacancy increases as new speculative buildings delivered without preleased tenants. Vacancy increased in the North Durham, South Durham, and Chatham County submarkets by 540 bps, 460 bps, and 410 bps, respectively. These increases reflected vacant speculative deliveries rather than tenant departures.
Nearly 1.2 msf delivered in Q3, bringing YTD completions to more than 3.9 msf. However, newly completed product continued to face lease-up challenges as 78.4% of space delivered in 2026 YTD remained vacant at the end of the third quarter. The construction pipeline remained elevated, with 6.0 msf currently underway, 37.6% higher than the five-year average. Nearly 2.9 msf of speculative product is scheduled to deliver before year-end, with 82.7% still available, potentially placing additional upward pressure on vacancy.
Pricing
Overall asking rents increased 2.9% QOQ to $11.33 per square foot (psf) in Q3, supported by healthy demand for high-quality space and premium-priced new construction. West Raleigh commanded the market’s highest asking rents at $18.50 psf, followed by Cary at $14.70 psf, reflecting their greater share of higher-priced flex properties. Space currently under construction was marketed at an average of $11.51 psf, slightly above the existing market average, with Eastern Wake County continuing to lead at $12.25 psf. Additional premium-priced deliveries are expected to place upward pressure on overall market asking rents.
