Triangle Commercial Real Estate Stalled by Permitting and Municipal Delays
The Triangle is growing at an incredible pace. With new businesses moving in, existing companies expanding, and more people calling the area home, the demand for commercial space is higher than ever.
Many commercial projects are slowing down or stalling completely. From office buildings and medical facilities to industrial warehouses and retail centers, developers are facing major delays. Here’s a look at what’s happening, why it matters, and how it impacts the commercial real estate market.
Why Permitting Matters in Commercial Real Estate
Before a commercial project can move forward, it must go through a municipal permitting process. This process is designed to make sure buildings meet safety, environmental, and zoning standards. The process and timeline vary from one municipality to another..
For developers and business owners, this often means months of waiting, multiple resubmissions, and growing costs. Here’s how it typically unfolds:
1. Initial review: The city looks at site plans, traffic studies, stormwater management, and other compliance items.
2. Corrections and resubmissions: If anything is missing or does not meet code, the developer fixes it and submits again. Sometimes multiple corrections and resubmission are required.
3. Final approval: Only after every issue is resolved does construction get the green light.
Most municipalities aim to complete upfit reviews in about 60 days. The reality for larger commercial projects or developments is that it often takes far longer, sometimes six months to over a year , especially for those that are more complex and potentially requiring community notifications and feedback or changes in zoning.
The Real Cost of Delays
Every extra month spent waiting has a price tag. Fluctuating interest rates mean developers who secured financing months earlier may face higher borrowing costs if timelines stretch out. Lost tenant opportunities arise when businesses who are looking to lease space can’t wait and move on to other properties or even other cities. Construction costs also tend to increase over time, with material and labor prices climbing during long delays, potentially blowing up project budgets. Meanwhile, landlords and investors miss out on rental income while properties sit empty, leading to revenue loss. Ultimately, these costs don’t just hurt developers; they get passed on to tenants through higher rents and to consumers through increased prices for goods and services.
Roadblocks Beyond the Permit Office
Permitting delays aren’t always caused by paperwork. In looking at Raleigh, many large-scale commercial projects have slowed down by related factors:
• Utility relocation: Road and transit projects like the Blue Ridge Road improvements have been pushed back by years because utilities weren’t moved on time. This, in turn, affects nearby commercial development timelines.
• Zoning battles: Projects requiring rezoning often face heated public debates, extending approval timelines by months or even years.
• Legal challenges: Lawsuits over development rules, like Raleigh’s “missing middle” housing policies, create uncertainty that stalls investment.
• Weather and site issues: Floodplain concerns or soil contamination can trigger additional studies and mitigation work before a permit is issued.
Real-World Impact: Businesses and Tenants Left Waiting
Delays don’t just frustrate developers; they also disrupt the plans of business owners waiting to move into new spaces. Medical practices may be forced to lease temporary space while waiting for their new offices to be built, while retailers and restaurants lose valuable revenue when grand openings are pushed back for months. Industrial tenants can miss out on key growth opportunities if their warehouses aren’t ready on time. In some cases, these delays can even cause deals to fall apart entirely, leaving both tenants and landlords to start over from scratch.
Several high-profile commercial developments in The Triangle are currently stuck in limbo. Raleigh’s Downtown South, a major mixed-use project combining retail, office, and entertainment space, has been paused as developers work through financing hurdles and city approvals. The new Kimpton Hotel and other projects around Nash Square are also facing delays due to rezoning and permitting challenges. Downtown Durham’s 27-story YMCA tower and American Tobacco Campus expansion are both on hold as developers work to secure funding and tenant commitments. In North Durham, the Latta Park development—featuring 200 townhomes and a Publix-anchored retail center—has been pushed back several months due to permitting slowdowns. Meanwhile, the Rigsbee Collection Phase 2 mixed-use project remains under construction well past its original timeline, and Longfellow Real Estate Partners’ lab projects are paused pending pre-lease commitments.
Efforts to Fix the System
There is growing pressure to make the permitting process faster and more predictable. State-level proposals aim to:
• Set strict timelines for permit reviews so developers know what to expect.
• Allow third-party reviewers to step in when the city is backlogged.
• Refund fees or reduce costs if deadlines aren’t met.
If adopted, these changes could help Raleigh stay competitive and keep projects moving forward.
Why This Matters for the Future
Permitting delays have a direct impact on the Triangle’s commercial real estate market. When businesses cannot expand, job growth and tax revenue slow down. Developers face higher costs, which ultimately leads to more expensive lease rates. Neighborhood revitalization efforts stall, leaving certain areas behind, while investors lose confidence and redirect capital to markets with clearer timelines. To keep the momentum strong both city and community leaders and state lawmakers must work together to streamline the permitting process and provide developers, business owners, and tenants with greater certainty.
Sources:
Axios Raleigh: https://www.axios.com/local/raleigh/2025/01/22/triangle-development-projects-limbo-timeline-durham-construction
Permit Flow: https://www.permitflow.com/blog/raleigh-building-permit
