Charlotte and Raleigh have emerged as the top two retail markets in the country, according to Marcus & Millichap’s 2026 Retail Investment Forecast Report published March 12.

The report weighs a mixture of forward-looking economic indicators and supply-and-demand variables over a 12-month period. 

Nationwide, the retail sector exhibited resiliency in 2025, with a rise in vacancy in the first half of the year followed by surging demand to finish the year strong, the report stated. 

Charlotte ended the year with accelerating net absorption while holding one of the 10 lowest vacancy rates among major markets, according to the report. Momentum in the city was driven by big-box, single-tenant move-ins. Those included new leases by supermarkets such as Publix, Harris Teeter and Lowes Foods.

Andrew Margulies, Marcus & Millichap’s senior managing director of investments for the Carolinas, told Bisnow that soft goods discount chains like T.J. Maxx, Marshalls and Burlington were also key drivers of positive retail activity in Charlotte, reflecting the budget-consciousness of many consumers.

“That category has really excelled over the past five to seven years in terms of new store accounts, fewer store closures, actually just adding more stores and absorbing more space,” Margulies said. 

The metro area experienced slowing construction and growing net absorption, combining for a 3.5% vacancy rate. That’s 40 basis points under the city’s trailing 10-year average, according to the report.

Raleigh-Durham actually weathered the departures of several notable big-box retailers, and its positive retail fundamentals were driven by small-shop demand. A rise in completed projects in Raleigh-Durham helped vacancy to tick up slightly to 3.0%, but that still ranked second-lowest among major U.S. markets. 

Marcus & Millichap’s report noted that years of “robust in-migration and household formation” have supported significant demand for retail space throughout the Southeast. Margulies said there is almost unlimited appetite right now for well-located retail centers in both Charlotte and Raleigh, putting upward pressure on pricing. 

“In some cases for the same asset that may have sold 12 months ago at one price, today actually could be worth more just from cap rate compression,” he said.

As office vacancy remains high after boom years in the state and the region still working off a glut of multifamily overbuilding, retail has become the coveted asset class in the area, Margulies said. 

“From a financing perspective, it is one of the most coveted asset classes for investing and commercial real estate,” he said. “If you lose a tenant in a building, you sometimes have two, three, four, five, six options of other tenants you could backfill the space with.”

A 24-story office building in Charlotte has changed hands. 

Highwoods Properties Inc. acquired 6Hundred at Legacy Union, a 411K SF office tower in Charlotte, from Lincoln Property Co. for $230M, according to Charlotte Business Journal, citing Mecklenburg County property records. 

This acquisition, which closed Wednesday, boosts the Raleigh-based REIT’s portfolio at Legacy Union — a multibuilding development — to 1.6M SF of trophy office space. 

Earlier this year, Highwoods acquired Legacy Union’s 14-story, 1.1M SF parking garage at 720 S. Church St. for $110M. The garage encompasses 3,057 parking spaces.

Highwoods now has three buildings at Legacy Union and eight overall across Charlotte.

Currently, 6Hundred is 84 percent leased with an average lease term of over 12 years. Tenants include American Express, law firm Robinson Bradshaw and Pike Corp.

With the sale, Highwoods plans to invest $8.5M for both near-term building improvements and leasing capital expenditures to stabilize the property’s occupancy rate. 

Under the agreement, Dallas-based Lincoln was reportedly scheduled to receive some $15.7M credited for free rent and other leasing-related expenses it provided before the building shifted ownership.

Highwoods projects to stabilize occupancy at the tower by 2027 and will realize $17.5M to $18.5M in net operating income annually at that point.

The 6Hundred property is connected to the Highwoods-owned Bank of America Tower and SIX50 South Tryon.

Highwoods is a publicly traded REIT that owns, leases and manages properties in several business districts across the Southeast. 

Charlotte’s office building market has been “entering a new phase of stability,” according to a recent Colliers market report, with long-term tenant demand rising. As reported by Savills Research, Charlotte leased 1.3M SF of office space in Q3, marking its strongest quarter of leasing volume in five years.

Timberline Real Estate Ventures bought The Wilde student apartments in Raleigh for $44.35 million. The seller, Cardinal Group, acquired the property in 2018 for $42.45 million. 

Located on nearly 16 acres at 3333 Melrose Club Blvd. on the south side of Interstate 40, the property, not far from North Carolina State, has 210 units in 16 3-story buildings.

Built in 1996 and renovated in 2011 and 2022, the apartments rent from $775 to $905 a month for a bedroom in either a two-, three—or four-bedroom plan. The fully furnished apartments feature quartz countertops, stainless steel appliances and an in-unit washer and dryer. Residents have access to a swimming pool, fitness center, clubhouse, private study rooms, game and recreation room, basketball and volleyball courts, dog park, grilling stations and free shuttle service to campus.

The Triangle Business Journal reports renovations will start soon, including upgrading common areas, units and the pool area.

Timberline Real Estate Ventures is a privately held real estate investment company that specializes in student housing.

Highwoods Properties a publicly traded REIT, acquired Advance Auto Parts Tower, a 20-story highrise, from Lionstone Investments. Lionstone Investments, who developed the building in partnership with Kane Realty Corp., were the sellers.

CommercialEdge reports Highwoods plans to use proceeds from the recent $145 million sale of three office buildings in Tampa, Fla., to fund the acquisition of Advance Auto Parts Tower.

The 346,000-square-foot tower came online in 2020. It features 11 floors of office space atop eight levels of parking and roughly 8,200 square feet of retail. The property was fully leased at the end of 2024, with a weighted average lease term of 8.2 years.

With a street address of 4200 Six Forks Road or 4000 Front at North Hills Street, the building is immediately adjacent to CAPTRUST Tower, a 300,000-square-foot Class A+ office property that is also owned by Highwoods.

At the end of 2024, the REIT’s portfolio encompassed 27.2 million square feet across several U.S. markets, while its development pipeline totaled 1.6 million square feet.

Liberty Senior Living’s high-end senior living complex is taking residents. The Triangle Business Journal reports that the 5-story complex in Raleigh rises where the Country Club Homes apartments once stood at Fairview and Oberlin roads.

Called Hayes Barton Place, residents will find a health center, pickleball court, movie theater and multiple restaurants, all geared toward seniors. Monthly fees start at $6,615 per month for 800 square feet and go up to $18,350 for the largest offerings.

The main building includes 169 terrace-style residences offering access to all the amenities, plus another 24 condo-style residences called The Flats at Bicton.

Liberty Senior Living has developed 14 properties, including The Templeton in Cary, has acquired five more and has two under development, including one in Pittsboro.

Hayes Barton Place has 86 percent of its spaces spoken for.

Dominion Realty Partners of Raleigh has submitted plans for the first phase of its Salisbury Square project, which is across from the Martin Marietta Center for the Performing Arts. The plans show a 7-story residential building with a connected parking deck.

The residential mid-rise tower will have 545 units, with an average size of 856 square feet per unit. The Triad Business Journal reports that Dominion Realty originally planned a 20-story mixed-use tower (photo) with 304 apartments, office and retail space for phase one but changed plans due to uncertainty in the office sector and financial markets.

For Salisbury Square, amenities for the 7-story building will include three courtyards, a swimming pool, club room, game room, fitness center and sky deck and lounge on the seventh floor.

In 2022, Dominion Realty acquired the site at 700 S. Salisbury St. for $35.5 million. An office building on the site was torn down in 2023 to make way for the development.

Dominium is hoping to take over some of a golf course property owned by the Raleigh Golf Association golf course to build apartments on nearly 44 acres. The proposed zoning is residential mixed-use up to four stories. The request contemplates only building on a few of the holes at the 27-hole layout.

The properties identified in the application are on the north side of the road. The RGA clubhouse and most of the 27-holes at the course on the south side of Tryon Road are not included in the rezoning.

The company is in the design process and plans to build between 350 and 500 townhomes and apartments. The units will most likely be offered to those making 60 percent or less of the area median income. The project would take three to four years to complete.

Dominium anticipates receiving noncompetitive housing tax credits from the North Carolina Housing Finance Agency.

The Brentmoor Apartments, located at 2080 Brentmoor Drive just outside the Beltline, sold for $45.6 million after the former owner, Silver Point Group, defaulted on the loan. St. Clair Holdings was the buyer. The Triangle Business Journal reports the company specializes in value-add real estate projects in the Southeast and Southwest.

Silver Point Group borrowed $45.6 million from an affiliate of Berkshire Residential in late 2021 to purchase the apartment complex for $52 million in early 2022.

The deed states that the borrower is in default as it “failed to pay the note as and when due” and that the default has continued. As of April 2024, Silver Point Group owed an outstanding balance of more than $48.7 million.

Brentmoor Apartments features one-, two- and three-bedroom units in 3-story buildings with rent starting at $999 a month. The units range from 735 to 1,240 square feet. Amenities include a swimming pool, grilling stations, fire pit, sauna, dog park, fitness center and more.

Work is heating up at the site for the East Civic Tower, the new city hall complex at the corner of Hargett and McDowell streets across from Nash Square. The site is next to the city’s current municipal complex.

The Triad Business Journal reports the project, which broke ground last summer, has a $206 million budget and calls for a 17-story building that will house the City Council chambers as well as office space and conference rooms for city departments.

The tower will allow the city to consolidate most of its operations and staff into a single building. The design of the building is led by Ratio. The contractors are Brasfield & Gorrie and Holt Brothers Construction.

The building will be 370,000 square feet and is expected to be complete in 2026. Back in 2018, the City Council approved a master plan for a new civic campus that called for three buildings on the block — the others would replace the municipal building and the City Park garage.

Barings provided a $134 million loan to refinance the existing loan on Smoky Hollow in Raleigh. The mixed-use development was delivered in 2020 by a joint venture between Kane Realty Corporation, Williams Realty & Building Company, and Lionstone Investments.

Smoky Hollow is comprised of a 283-unit Class-A apartment complex (“The Line”), a highly amenitized 229,000 square foot office building (“421 N Harrington”), and roughly 40,000 square feet of ground floor retail featuring a blend of restaurants and retailers.

The financing from Barings has a five-year term and JLL’s Travis Anderson, Colby Mueck, and Warren Johnson advised the sponsorship on the financing.

Barings says this transaction expands the company’s $24.2 billion real estate debt platform, which leverages the team’s direct origination capabilities and deep credit expertise to invest in loans secured by institutional-quality commercial real estate.