For several years, “flight to quality” has been one of the defining narratives of the office market. Companies were opting for less space but paying more for newer buildings with stronger amenities or mixed-use environments that could help bring employees back to the workplace.
That trend is still easy to see in the Triangle. Projects such as North Hills, Raleigh Iron Works and Smoky Hollow continue to command some of the region’s highest rents. Asking rates at several premium properties now extend from the mid $40s into the $50s per square foot.
But recent leasing activity shows that quality does not mean the same thing to every tenant.
Some of the Triangle’s larger office users are making significant commitments to well-located suburban properties, particularly in Cary and the Wake County side of Research Triangle Park. Recent leases in the 25K to 40K SF range have landed around $30 to $32 per square foot, with several users committing for 10 years or longer.
Those tenants are not necessarily choosing price over quality. For a larger occupier, easy access, parking, efficient space and a functional building are all measures of quality. Cost matters too. A $15 or $20 per square foot difference adds up quickly across 30K or 40K SF.
Flight to quality has not ended. The definition of quality has expanded.
There is also a large part of the office market that gets much less attention.
Conventional 3 Star properties have continued to account for roughly 70% of new direct office lease transactions in the Triangle. Since the beginning of 2025, those deals have averaged about 3,500 SF. The individual leases may be small, but the volume is hard to overlook.
That matters to owners. Most tenants are not choosing between a trophy mixed-use project and a corporate campus. Many are smaller businesses looking for a few thousand square feet, convenient access, adequate parking and a rent that fits the business.
They may not make headlines, but collectively they make the market.
Taken together, the leasing activity shows there is no single Triangle office story. Some tenants will pay a premium for an environment where restaurants, amenities and the surrounding development are part of the workplace experience. Larger users may place more value on access, parking, functionality and long-term occupancy costs. Smaller businesses continue to generate much of the transaction volume in conventional office space.
For owners, that makes positioning increasingly important. Not every property needs to compete with North Hills or the newest mixed-use development. A well-located suburban building can offer a very different value proposition, just as a conventional office property can serve a deep pool of smaller users.
The key is understanding what a building does well, which tenants are most likely to value it and whether the economics are competitive with the alternatives those tenants are considering.
Limited new supply could make that even more important. No speculative multi-tenant office is currently under construction in Raleigh or Durham, although additional office remains proposed across the region. For owners, that means the competitive set will remain largely unchanged in the near term.
For years, the office discussion has focused on how much space companies need and whether employees will come back to it. Those questions still matter but leasing activity in the Triangle is making another question just as important.
What does the tenant need the office to do?
APG Companies is a Raleigh-based, fully integrated commercial real estate firm serving clients throughout North Carolina and the Southeast.