The document summarizes recent developments in Raleigh and the Research Triangle region of North Carolina. It discusses Raleigh implementing a new unified development ordinance to promote density and sustainability but facing opposition from neighborhoods. It also covers the Research Triangle Park working to rebrand and attract companies and talent by introducing urban residential and mixed-use development. Finally, it addresses the growth of the urban cores of Raleigh and Durham in attracting companies, residents, and apartment development despite making up a small overall share of the regional housing market currently.

1. T r i a n g u l a t e
A CBRE|Raleigh Capital Markets Publication
Fall 2015

2. Raleigh implemented a new unified development
ordinance (UDO) in September 2013 under the
leadership of venerated former planning director
Mitch Silver. The UDO is essentially a complete
overhaul of the prior zoning code governing
land use. The primary intent of the ordinance is
to promote a walkable, transit-oriented city with
high density mixed-use districts with emphasis
on sustainability and affordability, or as one
planning commission member stated, “build up,
not out”. Central to this theme was codifying the
2030 Comprehensive Plan, applying form-based
development standards, and rezoning nearly 30%
of the city (35,000 parcels and 41,000 acres)
for greater predictability of process. Raleigh is
currently in the final stages of full adoption upon
City Council approval of the “city-wide rezoning”
which will not conclude until review of public
hearing comments are completed in November
2015.
However, the plan is not without complications
and objections. Generally, neighborhoods are
opposed to greater densities and higher height
standards than prior zoning. It appears that in
many areas where density should be encouraged,
remapping simply transitions to zoning compatible
with existing uses. In these instances, future higher
density, infill development will inevitably require
rezoning which the UDO intended to resolve.
Neighborhoods will be further empowered to
pressure elected officials to disapprove deviations
to a newly approved zoning map.
Seguing into the recent Raleigh elections,
candidates with neighborhood protectionist
agendas fared well. A neighborhood activist
defeated an eight-term incumbent after gaining
recognition for opposing a Publix anchored
shopping center in North Raleigh, and several
incumbents with tough stances on development
were re-elected. This does not mean densities in
development within Raleigh will not perpetuate,
however, the City of Raleigh must not lose sight
of the UDO’s primary objective: to plan for a
sustainable community in the long-run that
encourages densities in development versus an
older model of urban sprawl.
Raleigh’s Unified Development Ordinance, Elections,
and Impact on Development
Triangulate: Raleigh-Durham Insights
In July, Raleigh was voted the #2 Best City for
Business and Careers by Forbes.

3. The Research Triangle Park
(RTP) is renowned as one of the
nation’s earliest and significant
innovation centers. Founded
upon an alliance with three of
the world’s leading research
universities, the RTP
is home to major
corporations, mid-
market companies, and
start-ups focused on
pioneering research
and development
technologies. As the
Raleigh-Durham market
grows, the RTP’s 7,000
acre, campus-like
expanse finds itself
competing with the
region’s burgeoning
urban clusters such as Downtown
Durham and Downtown Raleigh
for millennial driven talent pools.
Urban clusters provide vibrancy,
walkability, and social networking
benefits that the RTP is striving
to overcome. Large corporate
relocations have eluded the RTP
recently as RedHat, Citrix, and
others have opted for downtown
settings. The RTP continues to
host over 200 companies and
a highly-educated workforce
numbering over 40,000, but it
finds itself at a crossroads.
Recognizing the need for
rebranding and repositioning,
the non-profit Research Triangle
Foundation has embarked on
a campaign that embraces the
RTP’s strengths: unparalleled
R&D resources, collaboration,
and a strong technology
network. The Foundation, not
fully content with the suburban
status quo, is also taking
measures to introduce urbanism
and residential uses into its mix.
The RTP is rolling out a new
master development plan and
has taken an unprecedented step
to self-develop a key section
of the park in partnership with
Hines. The vision for the 100-acre
Park Center, straddling I-40 in
the middle of the RTP,
incorporates a dense
1.2 million SF of office,
1200 multifamily units,
and 200,000SF of
retail.
Trends favoring
downtown living
will not abate, but
finally the RTP is
reinvigorating itself at
precisely the right time
as Raleigh-Durham
morphs into one uninterrupted
metropolitan region. By
generating its own cluster, the
RTP can capture thousands
of future jobs that have their
genesis in any number of its
top-quality incubators, including
Frontier, The Lab@RTP, First
Flight Venture Center, Alexandria
Innovation, BD Bioventure Center
and the Hamner Institute.
Urban Clustering and the Future of the Research
Triangle Park
Bob Geolas, President and CEO of the Research
Triangle Foundation of NC, leads the charge
in re-imagining the future of The Research
Triangle Park. On October 1, 2015, Geolas
announced to a standing-room only crowd at
RTP Headquarters, the $50 million in funds to
begin construction had been secured. With the
zoning and funds in place, development will
officially kick off in January 2016. - rtp.org
Example of Potential Open Space
A CBRE|Raleigh Capital Markets Publication

4. Raleigh-Durham has received numerous national
accolades and rankings over the years, but the
Bureau for Labor Statistics has made it difficult to
quantify the region collectively. Although viewed
by most as one region, data is often assessed
within two different metros: Raleigh/Cary and
Durham/Chapel Hill. This often mutes the collective
horsepower of the Raleigh-Durham-Chapel Hill
metropolitan area. Case in point, The Kauffman
Index assesses entrepreneurial activity for regions
across the U.S. and does not include Raleigh-
Durham within their top 40. Independently, neither
Raleigh nor Durham is large enough to make the
cut although the combined region would rank
among the top 37 largest metro regions in the U.S.
However, when Kauffman measured regions with
the highest ratio of tech startups Raleigh/Cary
and Durham/Chapel Hill ranked 13th and 22nd,
respectively.
The Research Triangle Park is legendary for IT
and biotech brainpower and entrepreneurialism,
so where is the venture capital and stories of
successful buyouts and IPOs? The
fact is the Triangle is garnering a
lot of venture capital, but it is very
relative. According to the National
Venture Capital Association, the
entire Southeast region of the
U.S. received only 3.2% of venture
capital funding between 2010
through the 2nd quarter of 2015.
Silicon Valley firms received a
staggering 45% of the $192 billion
of funds placed over this period.
New England and the New York
metro combined for another
20%. In other words, there are
many other areas of the country,
including top tier cities, receiving
less venture capital attention.
The silver lining for the Triangle is that 553
local deals garnered $2.42 billion of venture
capital between 2010 and the 3rd quarter of
2015 according to Pitchbook. Biotech and
pharmaceutical firms accounted for 38% of the
total or $911.41 million helping Raleigh-Durham
secure a position among the Top 10 U.S. biotech
centers. Comparatively, IT firms landed $366.5
million of funding since 2010. RTP-based The
Council for Entrepreneurial Development’s
Innovators Report concurs that equity funding
is alive and well in the region: of the 90 equity
deals funded in North Carolina in the first half of
2015, 74 were in the Triangle region. Additionally,
area firms and organizations – led by Duke and
UNC - were awarded an astounding $4.58 billion
of funding from the National Institutes of Health
(NIH), primarily for scientific research, bolstering
the region’s reputation as biopharma leader.
(continue on next page)
Preserving the Triangle’s Tech Image: Where’s the
Venture Capital?
Triangulate: Raleigh-Durham Insights
Healthcare
65%
Information Technology
15%
Business to Business
11%
Business to Consumer
4%
Materials & Resources
3%
Energy
2%
Source: PitchBook Data, Inc.Healthcare Information Technology Business to Business Business to Consumer Materials & Resources Energy Financial Services
Source: PitchBook Data, Inc.
Capital Invested by Primary Industry Sector
(Raleigh-Durham)

5. (continued from previous page)
Raleigh-Durham has inertia and the resources to continue to drive capital investment and employment,
especially in notably strong sectors such as biotech and IT. A strong network of angel investors and
serial entrepreneurs are filling the gaps of early stage development start-ups that venture capital
traditionally passes over. The market is relatively young, and many startups will mature, especially in
hotbeds of entrepreneurialism supported by Duke, UNC, NC State, NC Biotechnology Center, and others
in downtown Durham and Raleigh. As is the case with most technology clusters, success begets success.
The question for now is how will the market accommodate affordable space for the successes that are
sure to arise?
A CBRE|Raleigh Capital Markets Publication
DUKE UNIVERSITY MEDICAL CENTER MEDICINE PAVILION AND CANCER CENTER
The silver lining for the Triangle is that 553 local deals
garnered $2.42 billion of venture capital between 2010 and
the 3rd quarter of 2015 according to Pitchbook. Biotech
and pharmaceutical firms accounted for 38% of the total
or $911.41 million helping Raleigh-Durham secure a position
among the Top 10 U.S. biotech centers.
“
“

6. The Rise of Urban Living, How Deep is the Upper-End
Apartment Market?
Skyhouse Raleigh
As early as ten years ago, Raleigh
and Durham’s central business
districts were eerily quiet at
night. However, a surge in and
civic and private investment,
a flurry of grass-roots bar
and restaurant openings, and
renewed interest in urban living
and has injected new life into
the region’s once moribund
downtowns. Not since the 1960’s
have the Triangle’s urban cores
enjoyed such activity.
Raleigh and Durham are a tale
of two cities. The character
of employment in Downtown
Raleigh has transformed from
government, law and banking
into a haven for techies. Red Hat,
Citrix, and Ipreo have opened
offices downtown and employ
nearly 2,000, serving as a beacon
for other technology companies.
Currently, a growing workforce
of over 50,000 populates
downtown Raleigh. On the
other hand, Downtown Durham,
once the tobacco capital of
the Southeast, is enjoying the
same infusion of young, tech-
driven talent. The conversion
of historic mills into mixed use
environments such as American
Tobacco and West Village add to
Durham’s uniqueness and sense-
of-place. Duke University and
Medical Center, Durham’s largest
employer, is playing an integral
role in downtown’s renaissance
with significant investment in
many ongoing developments,
and the private-employer has
steadily shifted over 1,000
employees off campus into
Downtown.
Suddenly, Raleigh and Durham’s
downtowns are among the
trendiest places to live in the
Triangle, and the apartment
market has responded. The
first midrise, structured parked
apartments were constructed
in Durham and Raleigh in 2005,
respectively. But the mid-rise
boom did not occur until the
current market cycle starting
around 2010. Downtown Raleigh,
including Cameron Village and
Glenwood South, has gained over
2,315 rental units in this time and
another 1,058 units are currently
under construction. The region’s
first high-rise luxury apartments,
Skyhouse Raleigh, opened
their doors earlier this year to
record setting pricing. Durham’s
downtown market, including the
Ninth Street district, has added
1,408 units since 2010, and
another 597 units are underway.
The combined downtown
Raleigh and Durham apartment
inventory comprises a mere
5.0% of the region’s 119,740 unit
apartment market. While Raleigh
and Durham’s downtowns are
currently the beneficiary of
26% of all apartments under
construction market-wide, new
development will only inch the
downtown percentage to 6.1% - a
relatively small sum compared
to other metros. First ring
submarkets such as North Hills
and Crabtree Valley in Raleigh
continue to deliver urban-style
communities that compete for
downtown residents. Presently
64% of all apartments in the
Triangle under construction are
non-garden, meaning they have
some form of urban construct.
Ultimately, residents that can
afford the upper-end apartment
market make a lifestyle choice:
downtown or not.
The renewal of the Triangle’s
downtowns and the rise of urban
living are here to stay. The issue
developers now face is the lack
of prime sites for continued
infill development. The question
appears to be not how deep
is the upper-end apartment
market? Rather, how can the
market accommodate long-term
demand for urban living?
Triangulate: Raleigh-Durham Insights

7. Ben Kilgore
Executive Vice President
ben.kilgore@cbre-raleigh.com
919.831.8191
Jeff Glenn
Executive Vice President
jeff.glenn@cbre-raleigh.com
919.831.8186
Joe Graham
Senior Vice President
joe.graham@cbre-raleigh.com
919.831.8196
CBRE|Raleigh
4208 Six Forks Road, Suite 1220
Raleigh, NC 27609
919.831.8200
Jim McMillan
Vice President
jim.mcmillan@cbre-raleigh.com
919.831.8204
Roger Edwards
First Vice President, CBRE, Inc.
roger.edwards@cbre.com
919.831.8262
© 2015 CB Richard Ellis-Raleigh, LLC, a Delaware limited liability company. The opinions contained in this article represent the opinions of the author
and not the opinions of CB Richard Ellis-Raleigh, LLC, a Delaware limited liability company. The information contained in this article was obtained by
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