Office Market Strain. Triangle-area office vacancy is at multi-year highs, creating pressure on owners of underutilized buildings1. TriProperties reports a 16.8% overall office vacancy in Q3 20241, and submarkets near Cary and North Raleigh are similarly soft. For example, Cary offices had roughly 15.8% vacancy in late 20242, and North Raleigh submarkets (e.g. Six Forks/Crest) are in the high teens (about 17.2% in Q1 2025)3. Industry researchers note that by mid-2025 the regional office vacancy hovered around 18%4. Sublease space has also accumulated, and positive net absorption turned negative as many tenants downsized or delayed leasing. The net effect is clear: a glut of vacant office space and flat rental rates are hurting owners’ asset values
Triangle office buildings like this one face high vacancy. Dominion Real Estate’s clients – including corporate owners and REITs – are seeing more of their space sit empty amidst a regional vacancy surge1.
Life Science Boom. By contrast, demand for medical R&D and lab space is booming. The Research Triangle Park region is a national life-science hub (anchored by Duke, UNC, NCSU and RTP), and companies are aggressively expanding here. North Carolina logged 25 new life-science projects in 2024, representing roughly $10.8 billion in investment5. For instance, Novo Nordisk announced a $4.1 billion biotech campus in Raleigh6, while Biogen and Johnson & Johnson each committed $2 billion toward new RTP-area manufacturing facilities7. In aggregate, Cushman & Wakefield finds about 2.3 million square feet of active life-sciences tenant demand in the Triangle (pre-pandemic record levels)8. Although lab vacancy ticked up (C&W reports ~32.4% total life-science vacancy in Q3 2025)9, leasing activity is very healthy: 162,600 sf of new life-science leases signed in Q3 2025 – the highest quarter since 202210. In short, high-quality lab and medical space is scarce, well-suited to the area’s workforce, and commanding strong rents – even as standard office space languishes.
High-tech lab space is in demand. The Triangle’s growing biotech industry means robust R&D leasing: Cushman & Wakefield reports over 2.3 MSF of active lab/R&D requirements in Raleigh-Durham8, and recent major capital commitments (e.g. Novo Nordisk, Biogen, J&J) highlight this surge57.
Adaptive Reuse Value Proposition. Converting vacant offices to life-science or medical use can unlock far greater value than keeping them as conventional offices. Rather than build new labs (which can take years and significant capex), owners can leverage the existing asset. Adaptive reuse can deliver speed-to-market advantages and cost savings if the building’s core systems (floor load capacity, floor-to-floor height, HVAC, etc.) can support lab functions11. This can preserve land equity and avoid the long lead-times of new construction. In practice, a successful conversion requires early technical review (for ventilation, lab‐grade power, hazardous materials handling) and entitlement checks. Crucially, owners should verify local zoning: many jurisdictions treat “life science” or “medical office” as allowable in current commercial districts, but some high-containment labs may need special permits or additional agency review12. When done right, however, the payoff is substantial. Life-science tenants will pay premium rents for modern lab space, typically higher than office rates. With vacancy so elevated, repositioning an asset into the in-demand lab/medical sector can dramatically improve buyer interest and final sale price.
Dominion Real Estate’s team specializes in these complex transactions. As a combined brokerage and development advisory firm, we handle everything from valuation and market positioning to finding the right specialized buyers or capital partners. We routinely structure dispositions (outright sales, structured exits, joint ventures, GP-led equity deals, 1031 exchanges, etc.) around the owner’s goals13. By marketing assets through our network of biotech developers, private equity and family offices, we secure buyers who understand the lab market and can close off-market, confidential sales. In short, Dominion offers a disciplined, owner-focused sales process that preserves negotiating leverage and maximizes proceeds.
Case Studies. Local projects illustrate this trend. In Raleigh, East West Partners is converting a 100,000 sf former grocery/post office on Six Forks Road (Midtown) into lab space14. This is poised to be Raleigh’s first large-scale office-to-lab reuse; city officials actively courted developers by studying Boston conversions15. In Durham, the recently built Venable at Roxboro office tower (2022 vintage) is being retrofitted for biotech: investor Trinity Capital plans fully outfitting an entire floor with move-in-ready lab suites to attract emerging biotech tenants16. These initiatives stem directly from the supply-demand mismatch. As a local developer noted, the RTP and university ecosystem already exists here, so filling idle offices with lab users “is only growing” in importance14. Owners in Cary or North Raleigh can expect similar interest: the same academic and corporate R&D community extends across the region.
Regulatory & Zoning Considerations. Any conversion starts with planning review. In Wake County (Raleigh, Cary, etc.), many commercial zoning districts already permit research or medical uses, but owners should confirm. Projects involving specialized labs (bio-safety levels, clean rooms, fume hoods, etc.) may require fire and environmental approvals. Advanced lab uses might need a conditional use permit or additional parking/density allowances. Early coordination with planning and building departments (and, if needed, architects/engineers) is critical. Dominion’s advisory team can facilitate this: our development background helps flag potential entitlements upfront, speeding the timeline once a sale is underway.
Table: Vacancy vs. Lab Demand and Conversion Examples.
| Metric or Example | Cary | North Raleigh | Triangle/RDU (overall) |
|---|---|---|---|
| Office Vacancy (late 2024) | ~15.8% (Q3 2024)2 | ~17% (Q1 2025)3 | ~16.8–18.3%14 |
| Active Lab/R&D Demand | (N/A) | (N/A) | ~2.3 MSF of tenant requirements8 |
| Major Life-Science Investments | Novo Nordisk $4.1B (Raleigh)6 | J&J $2.0B (Holly Springs)7 | NC total ~$10.8B in 20245 |
| Notable Office→Lab Project | – | Raleigh: 100K sf former Kroger lab conversion14 | Durham: Speculative lab floor at Roxboro Tower16 |
Key Takeaways: The Triangle’s office glut and life-science boom make adaptive reuse an attractive exit. By converting a Class B/C building into modern lab or medical use, owners can sell into a stronger demand pool. Dominion Real Estate has the local market insight and capital network to execute these sales, whether off-market or via specialized dispositions. Corporate owners and REITs with vacant Cary or North Raleigh assets should consider this path: repositioning to labs can tap rising rents and avoid obsolescence. Dominion’s experienced team can run a streamlined sale or joint‐venture process, aligning the asset with the life sciences market.
https://www.triprop.com/wp-content/uploads/3Q24-Triangle-Market-Report.pdf
[3] trinity-partners.com
[4] Raleigh-Durham Office Market Report | 2025 Q2 | Colliers
https://www.colliers.com/en/research/raleigh/raleigh-durham-office-market-report-2025-q2
[5] [6] The Research Triangle: Why Raleigh is an Up-and-Coming Life Sciences Manufacturing Hub | Meet Recruitment
[7] [9] [10] Raleigh-Durham Life Science Marketbeat Q3 2025
[8] Under the Microscope: A Deeper Look at Raleigh-Durham’s Life Sciences Market | US | Cushman & Wakefield
[11] [12] Considerations for Repurposing a Speculative Office Building into Research and Development Laboratories | BHDP
[13] Sales – Dominion Real Estate
https://dominion-realestate.com/sales/
[14] [15] Office space transformation | Raleigh officials in talks with developers to convert vacant office space – ABC11 Raleigh-Durham
https://abc11.com/post/office-space-conversion-downtown-raleigh-developers-lab/13433851/
[16] A downtown Durham tower will get speculative lab space in effort to land tenants – Axios Raleigh