Why Are Mixed-Use Properties Thriving in Raleigh?
Raleigh's mixed-use real estate sector has become one of the most dynamic segments of the Triangle's commercial property market, driven by the city's rapid population growth, urban revitalization, and a lifestyle shift toward walkable, amenity-rich environments where residents can live, work, and shop within the same development. With approximately 70 new residents arriving in the greater Raleigh area each day, demand for mixed-use properties that combine residential, retail, office, and hospitality components continues to accelerate across the metro's most desirable corridors.
The transformation of Downtown Raleigh and the Warehouse District exemplifies this trend. The RUS Bus project is delivering roughly 500,000 square feet of mixed-use space including 400-plus apartments, 18,000 square feet of retail, and 200 hotel rooms adjacent to Raleigh Union Station. The Depot is adding a 170-key boutique hotel and over 30,000 square feet of street-level retail while preserving the historic 1912 building. The new 17-story municipal building near Nash Square is anchoring additional mixed-use development in the surrounding blocks.
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Raleigh's mixed-use growth is supported by the same economic engine that powers the broader Research Triangle market. Apple's $1 billion campus in Research Triangle Park, Epic Games' headquarters in nearby Cary, and employers like Cisco, IBM, Red Hat, and SAS generate a workforce that increasingly prefers walkable, mixed-use environments over traditional suburban living. NC State University's 36,000-plus student body adds further demand for mixed-use properties near campus and along the Hillsborough Street corridor.
For borrowers pursuing commercial loans in Raleigh, mixed-use properties present both compelling investment opportunities and unique financing challenges. The multi-component nature of these properties requires lenders who understand how to underwrite residential, retail, office, and hospitality income streams within a single asset, and the Raleigh market's strong fundamentals provide the demand base that supports these complex developments.
What Mixed-Use Loan Programs Are Available in Raleigh?
Financing mixed-use properties in Raleigh requires understanding which loan programs accommodate multi-component assets and how different lenders evaluate the income generated by each property component.
Conventional Bank Loans from Triangle-area banks are the primary financing source for stabilized Raleigh mixed-use properties. Rates range from 6.25% to 7.75% with 5 to 10 year terms and up to 70% LTV. Banks with local market expertise are best equipped to underwrite the multiple income streams in a mixed-use property, evaluating residential occupancy, retail tenant quality, and office lease terms as distinct revenue sources.
SBA 504 Loans provide exceptional terms for owner-occupied mixed-use properties in Raleigh. If the borrower's business occupies at least 51% of the building, the entire property can be financed with up to 90% financing at fixed rates between 5.75% and 6.75% for 20 to 25 year terms. This program works well for Raleigh business owners who operate a ground-floor retail or office space and lease upper-floor apartments for additional income.
Bridge Loans serve mixed-use properties that are partially vacant, under renovation, or transitioning to a new tenant mix. Rates range from 8.5% to 12.0% with 12 to 36 month terms. In Raleigh's active urban development market, bridge loans finance the acquisition and repositioning of mixed-use buildings that need lease-up or renovation before qualifying for permanent debt.
CMBS and Conduit Loans offer non-recourse financing for larger Raleigh mixed-use properties, typically $3 million and above. Rates range from 6.00% to 7.50% with 5 to 10 year terms. CMBS lenders evaluate mixed-use properties based on the overall stabilized NOI, and they prefer assets where no single component represents less than 20% of total revenue.
Construction Loans finance ground-up mixed-use development in Raleigh's urban corridors. Rates range from 7.5% to 10.0% with 12 to 24 month terms and up to 75% loan-to-cost. Mixed-use construction lending in Raleigh has been active, with significant projects underway in Downtown, the Warehouse District, and Glenwood South.
DSCR Loans provide investor-focused financing for smaller Raleigh mixed-use properties. Rates range from 7.5% to 9.5% with 30 year terms. Properties with a residential majority (more than 50% of units or square footage) often qualify through residential DSCR programs with more competitive terms. Use a DSCR calculator to evaluate your mixed-use property's qualification.
Which Raleigh Neighborhoods Support the Strongest Mixed-Use Investment?
Mixed-use property performance in Raleigh varies significantly by location, with the strongest results concentrated in walkable, transit-accessible, and amenity-rich neighborhoods.
Downtown Raleigh and the Warehouse District represent the epicenter of mixed-use development in the Triangle. The convergence of state government employment, NC State University, the convention center, and a vibrant restaurant and entertainment scene creates multi-layered demand for residential, retail, and office space. The Warehouse District's transformation through the RUS Bus project and The Depot redevelopment is creating an entirely new mixed-use neighborhood adjacent to Raleigh Union Station. Lenders view Downtown mixed-use as strong collateral due to the area's employment density and limited land supply.
Glenwood South has evolved from a restaurant and nightlife corridor into a fully mixed-use neighborhood with residential towers, street-level retail, and creative office space. Properties in Glenwood South benefit from exceptional foot traffic, proximity to Downtown employment, and a young professional demographic that values walkability. Mixed-use properties in this corridor command premium rents across all components.
North Hills and Midtown demonstrate the success of large-scale mixed-use development in a suburban context. Kane Realty's ongoing expansion of the North Hills master plan, including office towers, residential buildings, and lifestyle retail, has created one of the most successful mixed-use destinations in the Southeast. Properties within and adjacent to North Hills benefit from the district's established reputation and consumer draw.
Hillsborough Street and NC State Corridor serve the university community with mixed-use properties combining student and workforce housing with ground-floor retail and dining. The corridor's redevelopment has introduced modern mixed-use buildings that attract both students and young professionals working in the technology sector.
Cameron Village and Village District anchor a historic mixed-use retail center that is undergoing significant redevelopment with new residential, retail, and office components. The district's central location between Downtown and North Hills positions it for continued mixed-use investment.
How Do Lenders Underwrite Raleigh Mixed-Use Properties?
Mixed-use underwriting is more complex than single-use property lending because lenders must evaluate multiple income streams, occupancy assumptions, and operating expense structures within a single asset.
Lenders begin by segmenting the property's income by component: residential rent, retail rent, office rent, parking income, and any other revenue sources. Each component is underwritten using the standards applicable to that property type. Residential income is evaluated against comparable apartment rents in the submarket. Retail income is evaluated based on tenant credit, lease terms, and the property's retail trade area demographics. Office income is evaluated against Class A or B comparable rents depending on the building's quality.
Vacancy assumptions for mixed-use properties in Raleigh typically apply different rates to each component. Lenders may use 5% to 7% residential vacancy (reflecting Raleigh's approximately 8.0% multifamily vacancy), 3% to 5% retail vacancy (reflecting the approximately 2.34% market rate), and 10% to 15% office vacancy (reflecting the broader office market adjustment). These component-specific vacancy assumptions produce a more accurate underwritten NOI than a single blended vacancy rate.
Debt service coverage ratio requirements for Raleigh mixed-use properties range from 1.25x to 1.35x, slightly higher than single-use properties because of the added complexity and the multiple risk factors inherent in multi-component assets. Properties with strong residential occupancy and NNN retail tenants on the ground floor typically achieve the strongest DSCR profiles.
Loan-to-value ratios for mixed-use financing range from 60% to 75%, depending on the property's stabilization level, component mix, and location quality. Downtown and North Hills mixed-use properties can reach 70% to 75% LTV, while less-established locations may cap at 60% to 65%.
What Are Current Interest Rates for Raleigh Mixed-Use Loans?
Interest rates for Raleigh mixed-use loans reflect the complexity premium that lenders apply to multi-component assets, typically 0.25% to 0.50% above comparable single-use property rates.
Conventional bank rates for stabilized Raleigh mixed-use properties range from 6.25% to 7.75%, with Downtown and North Hills properties at the lower end and suburban or less-established locations at the higher end. Banks with Triangle-area mixed-use lending experience offer the most competitive pricing.
CMBS rates for larger Raleigh mixed-use properties range from 6.00% to 7.50%, with non-recourse terms available for properties above $3 million. Life insurance companies offer rates between 5.75% and 7.00% for premium mixed-use assets with strong occupancy and tenant quality.
Bridge loan rates for mixed-use repositioning range from 8.5% to 12.0%, reflecting both the execution risk of lease-up and the complexity of stabilizing multiple property components simultaneously.
SBA 504 rates between 5.75% and 6.75% provide the most attractive terms for Raleigh business owners purchasing mixed-use properties where they will occupy at least 51% of the building for their own business operations.
A commercial mortgage calculator helps Raleigh mixed-use borrowers compare payment scenarios across different loan programs and structures.
What Are the Key Challenges of Financing Mixed-Use in Raleigh?
Mixed-use properties present financing challenges that single-use properties do not, and understanding these challenges helps borrowers prepare stronger applications and structure transactions more effectively.
Component Valuation Complexity arises because appraisers must value multiple property types within a single asset. A mixed-use building with apartments, ground-floor retail, and a parking deck requires the appraiser to apply different capitalization rates, comparable rent analyses, and expense assumptions to each component. This complexity can lead to appraisal delays and valuation disagreements that slow the financing process.
Operating Expense Allocation between residential and commercial components requires clear documentation. Property taxes, insurance, common area maintenance, and utilities may be allocated differently to residential tenants (typically included in rent) and commercial tenants (often passed through via NNN or modified gross leases). Lenders need detailed operating statements that clearly separate residential and commercial expenses.
Regulatory and Zoning Compliance for mixed-use properties in Raleigh requires navigating building codes, parking requirements, and zoning provisions that differ by use type. Properties must comply with residential and commercial building codes simultaneously, and lenders evaluate compliance as part of their due diligence.
Management Complexity is higher for mixed-use properties because residential and commercial tenants have different needs, communication styles, and lease structures. Lenders evaluate the borrower's property management plan and may require a professional management company with mixed-use experience.
How Can Raleigh Mixed-Use Investors Maximize Property Value?
Maximizing value in Raleigh mixed-use properties requires strategies that address each component while creating synergies between the residential and commercial elements.
Optimize the Residential-Retail Mix by selecting ground-floor retail tenants that enhance the residential experience. Coffee shops, restaurants, fitness studios, and convenience services create a built-in amenity package that allows the residential component to command rent premiums of $50 to $150 per unit per month compared to properties without ground-floor retail.
Invest in Shared Amenity Spaces that serve both residential and commercial tenants, including rooftop terraces, courtyard seating, bicycle storage, and package delivery rooms. These amenities increase the property's competitive position and support higher rents across all components.
Maximize Parking Revenue by implementing dynamic parking management that serves residential tenants during evenings and weekends while generating revenue from commercial and public parking during business hours. In Downtown Raleigh and Glenwood South, structured parking spaces can generate $100 to $200 per month in additional revenue.
Structure Retail Leases Strategically with NNN terms, percentage rent clauses for food and beverage tenants, and co-tenancy provisions that protect the overall tenant mix. Strong retail lease structures improve property NOI predictability and enhance financing terms.
Position for Transit-Oriented Value by targeting properties near Raleigh Union Station, planned Bus Rapid Transit routes, or the GoTriangle transit network. Transit accessibility is becoming increasingly important to both residential and commercial tenants, and proximity to transit infrastructure supports long-term value appreciation.
Contact Clearhouse Lending to discuss your Raleigh mixed-use loan needs and get a customized rate quote for your property.
Frequently Asked Questions About Mixed-Use Loans in Raleigh
What percentage of residential vs. commercial triggers different loan programs?
The residential-to-commercial split significantly impacts loan program eligibility in Raleigh. Properties with 80% or more residential square footage may qualify for residential lending programs with higher LTV and lower rates. Properties with 50% to 80% residential typically qualify for standard commercial programs. Properties with more than 50% commercial square footage are underwritten as commercial assets. SBA 504 loans require 51% or more owner-occupancy across all components, regardless of use type.
Can I finance a mixed-use property that includes a hotel component in Raleigh?
Yes, mixed-use properties with hospitality components can be financed in Raleigh, but hospitality adds underwriting complexity. Lenders evaluate hotel components based on revenue per available room (RevPAR), occupancy projections, brand affiliation (if any), and the local competitive hotel market. Properties where the hotel represents more than 30% of total revenue may face more limited lender options, as some conventional banks and CMBS lenders avoid hospitality exposure. The Warehouse District's hotel development activity demonstrates lender willingness to finance hospitality-inclusive mixed-use in strong Raleigh locations.
How does parking affect mixed-use loan underwriting in Raleigh?
Parking is a critical underwriting factor for Raleigh mixed-use properties. Lenders evaluate whether the property provides sufficient parking for all components based on City of Raleigh zoning requirements, which vary by use type and location. Structured parking adds significant value but also significant construction cost ($25,000 to $45,000 per space). Parking revenue can strengthen DSCR calculations, and properties in Downtown or near transit may qualify for reduced parking requirements that improve project economics.
What is the minimum down payment for a mixed-use loan in Raleigh?
Minimum down payments for Raleigh mixed-use loans range from 10% to 40% depending on the program. SBA 504 loans for owner-occupied mixed-use require as little as 10% down. Conventional bank loans require 25% to 35% down (65% to 75% LTV). CMBS loans require 25% to 35% down. Bridge loans for repositioning require 30% to 40% down based on as-is value. Construction loans for new mixed-use development require 20% to 40% equity depending on pre-leasing levels.
How long does it take to close a mixed-use loan in Raleigh?
Mixed-use loan closing timelines in Raleigh are typically 5 to 15 days longer than comparable single-use property loans due to the additional complexity of multi-component underwriting. Conventional bank loans close in 50 to 75 days. CMBS loans require 60 to 90 days. SBA 504 loans take 60 to 90 days. Bridge loans close in 21 to 45 days. The additional time is driven by component-specific appraisal work, zoning compliance verification, and the analysis of multiple income streams.
Are Raleigh mixed-use properties good investments in 2026?
Raleigh mixed-use properties in strong locations remain attractive investments in 2026, supported by the metro's population growth, urban revitalization, and lifestyle preferences that favor walkable, amenity-rich environments. Properties in Downtown, Glenwood South, North Hills, and the Hillsborough Street corridor benefit from multiple demand drivers that reduce single-sector risk. The combination of residential income stability, tight retail vacancy (approximately 2.34%), and the Research Triangle's employment growth creates a diversified income profile that supports mixed-use property performance.
Moving Forward With Your Raleigh Mixed-Use Loan
Raleigh's mixed-use real estate market offers borrowers and investors a compelling combination of strong demand fundamentals, urban revitalization, and diversified income potential. Whether you are acquiring a stabilized mixed-use building in Downtown or North Hills, purchasing an owner-occupied mixed-use property with SBA 504 financing, repositioning a Glenwood South building with bridge lending, or developing a new mixed-use project in the Warehouse District, the Raleigh market's growth trajectory supports investment across a range of strategies.
The key to securing competitive mixed-use financing in Raleigh is working with a lending team experienced in multi-component property underwriting, who understands how to evaluate and present the distinct income streams, operating characteristics, and risk factors of each property component.
Contact Clearhouse Lending to discuss your Raleigh mixed-use loan needs and get a customized rate quote for your property.