Opportunity Zones and Tax Incentives for Commercial Sellers in Raleigh-Durham

The Raleigh-Durham metro has 17 Opportunity Zone census tracts split between two counties. Raleigh (Wake County) has 10 designated tracts. Durham has 7. Together, they cover some of the fastest-appreciating corridors in the Triangle — and that makes them prime targets for OZ investment capital.

I’ve been watching capital flow into these tracts for years. And with OZ 2.0 on the horizon and North Carolina’s corporate tax heading to zero, the next 18 months are going to be active for commercial property owners in this market.

Where the OZ tracts are

Raleigh’s 10 tracts cluster in a few key areas. Southeast Raleigh has multiple designations — this is the corridor between downtown and the Garner line that’s seen massive redevelopment pressure. The Capital Boulevard corridor running north from downtown has several OZ tracts. These areas sit right next to the core but have historically lagged in development. That’s exactly the profile Opportunity Zone investors look for.

Durham’s 7 tracts are concentrated around downtown Durham and the neighborhoods stretching south and east. The downtown area has already seen billions in redevelopment — the American Tobacco Campus, the Durham Innovation District, Duke’s expansion. OZ designation added fuel to investment that was already happening.

If you own industrial or flex space in these corridors, you’re sitting on property that OZ-qualified buyers actively want.

How the federal OZ program works for sellers

Here’s the thing. You don’t need to be an OZ investor yourself to benefit from the program. You just need to be selling a property that OZ investors want to buy.

When someone sells stocks, a business, or another property and has capital gains, they can invest those gains into a Qualified Opportunity Fund within 180 days. That QOF then deploys the capital into OZ-designated real estate. The investor gets to defer their original gain until December 31, 2026. And if they hold the OZ investment for 10 years, all new appreciation is permanently tax-free.

That permanent exclusion is the real draw. An investor who buys a $2 million commercial property in an OZ tract and holds it for 10 years pays zero capital gains tax on whatever that property is worth when they sell it. In a market like the Triangle that’s growing at 2-3% annually, that’s a powerful motivator.

OZ 2.0 and what it means for the Triangle

The current OZ designations were made in 2018 based on 2010 Census data. They expire at the end of 2028. Under the proposed OZ 2.0 framework, governors would nominate new tracts by approximately October 2026, with new zones taking effect January 1, 2027, and lasting 10 years.

For the Triangle, this is significant. Some current OZ tracts — especially in areas that have already gentrified — may not qualify for redesignation. Others could be added. If you’re in a tract that’s likely to lose its OZ status, the smartest move is selling while the designation still attracts premium buyers.

North Carolina’s tax advantage

North Carolina’s corporate income tax is 2.25% in 2025. Lowest in the country. And it’s dropping to zero by 2030. That’s not a talking point — it’s state law. The individual income tax rate is 4.25%, dropping to 3.99% in 2026.

The state also runs the Job Development Investment Grant program. JDIG provides performance-based grants up to 80% of state withholdings for up to 12 years. That’s the program that helped land major employers in the Triangle — companies we covered in our piece on the Triangle’s top employers. Every major employer that relocates here needs commercial space, and JDIG helps make it happen.

1031 exchanges in the mix

Honestly, most commercial property sellers in the Triangle still use 1031 exchanges. You sell, identify a replacement property within 45 days, close within 180 days, and defer all capital gains. No limit on the dollar amount. It’s straightforward and it works.

Some sophisticated buyers are combining 1031 exchanges with OZ investments — exchanging into property that happens to be in an OZ tract. That stacks the deferral benefits. If your property qualifies for both, you’re attractive to a wider set of tax-motivated buyers.

The seller’s window

The Triangle is growing. The tax environment is getting more favorable every year. And OZ capital is actively looking for deployment targets in Southeast Raleigh, the Capital Boulevard corridor, and downtown Durham. If you own commercial property in these areas, the demand side of the equation is working in your favor right now.

If you’re considering selling commercial property in Raleigh or Durham, I’d like to hear about it. Call me at 704-600-3839 or visit rothcapital.com.