Diego Munoz, President, KW Commercial

In an interview with Invest:, Diego Munoz, president of KW Commercial, reflected on shifting market dynamics across the Triangle. “For those who have lived through multiple cycles, this kind of environment can also be a chance to grow market share and create opportunities for clients and capital partners,” Munoz said, as he outlined how selective investment, regional expansion, and infrastructure constraints are shaping the next phase of commercial real estate growth.

What changes or trends are you seeing across the region’s commercial real estate market that are affecting your strategy at KW Commercial?

Going into 2026, there’s still an element of uncertainty in the market. That makes everyday commercial real estate challenging for many small and mid-sized businesses, while investors are finding motivated opportunities across traditional residential, traditional commercial, and some nontraditional plays.

Development has been especially difficult. Land prices are high, the cost of money is high, and permitting and municipal processes add time and expense. In many cases, it will take a while for development activity to feel normal again.

You also have a surplus in certain inventory types, with the large office sector as a clear example. The hope is that pricing begins to normalize and demand returns over time. Meanwhile, retail is still healthy, and parts of industrial remain strong, even as some larger industrial spaces are taking longer to fill because of uncertainty tied to the international marketplace.

Raleigh-Durham has historically been somewhat insulated, which helps. The region benefits from sustained investment and municipalities that work to keep incentives and opportunities competitive. For those who have lived through multiple cycles, this kind of environment can also be a chance to grow market share and create opportunities for clients and capital partners.

And this region is larger than it used to be. Growth and deal flow now extend well beyond the core municipalities into surrounding counties, which is opening up new options for both businesses and residents.

What makes the greater region an ideal location for people to move into, for businesses to start or relocate, and for commercial real estate investment?

The traditional economic fundamentals of the Raleigh-Durham region absolutely still hold true. We have world-class higher education institutions that consistently drive talent, innovation, and research directly into our local business ecosystem. Our healthcare system is another core strength, providing an essential quality of life for residents and serving as an economic stabilizer for businesses looking to relocate here.

While our core housing market remains strong, affordability has become a real challenge. However, a major commercial advantage today is the region’s outward expansion. Buyers and renters are finding more accessible price points in surrounding submarkets like Clayton, Sanford, Fuquay-Varina, and eastern Wake County, all while maintaining a reasonable commute back to major employment hubs.

Our demographic diversity is also a massive asset for long-term growth. North Carolina continues to see strong in-migration, including significant growth within the Latino community, alongside newcomers from Asia and India and broader international investment. This diversity directly strengthens our workforce, builds a more dynamic entrepreneurial base, and creates the cultural environment that helps companies attract and retain top talent.

You noted that retail and segments of industrial are still strong. How are you seeing those sectors perform, and where is capital rotating right now?

Retail and industrial segments have remained highly resilient because the inventory backlog coming out of the pandemic was rapidly absorbed, and the demand for warehousing and logistics accelerated significantly during that period. While this created strong development momentum, it also pushed land acquisition and construction pricing much higher.

According to recent market data, the Triangle’s overall industrial vacancy is hovering between 6.4% and 6.9%, showing that the market is in a much healthier supply-and-demand position than larger Class A office products. In contrast, office supply has outpaced demand, leaving overall vacancy sitting around 19.5% to 22.3% across the market. Developers are working hard to offer aggressive leasing incentives in the office sector, but the market still has to work through structural questions over time, particularly around how refinancing performs as older leases roll over and valuations reset.

From our vantage point at KW Commercial, deal flow continues across a wide variety of property types, including hospitality, triple-net leased assets, gas stations, and multifamily, alongside the traditional office, retail, and industrial mix.

Personally, I love land. I look at land as a blank canvas — if we can identify the right opportunity, the long-term upside is substantial. There are still great opportunities across the region, ranging from smaller infill sites to larger tracts that can be developed to support residential growth, medical office space, neighborhood retail, or future industrial projects.

How are infrastructure challenges, including power constraints and the demands tied to AI, shaping development decisions?

Power capacity has become a real constraint in modern development. In several areas across North Carolina, municipalities and the state are being forced to make tough decisions regarding utility allocation as residential growth and large-scale manufacturing projects compete for energy.

When a major industrial user or data center requires “mega power,” we are seeing situations where the existing grid simply cannot support the scale requested. This forces communities to weigh serious tradeoffs, and the rapid growth of AI-related infrastructure is a massive factor behind this steepening demand curve.

While I am optimistic about AI’s long-term potential to improve business, the sustainability question on the infrastructure side is critical: do we actually have enough power to support what is coming? If we don’t address this capacity challenge collectively, we are going to hit a logjam that directly slows down site selection, permitting timelines, and the overall pace of inbound commercial investment.

What role do developers, designers, and firms like yours play in enhancing growth while maintaining a balance between residential and industrial needs?

On the design and engineering side, we have highly capable professionals who know exactly how to plan infrastructure and zone land use for long-term community success. The much more challenging piece of the puzzle is navigating public policy and local politics.

Neighborhood concerns, competing political priorities, and the simple reality that no one can control where people ultimately choose to live will often slow down or fundamentally reshape development projects.

North Carolina has a proven track record of what visionary, long-range planning can accomplish. The early regional coordination that created Research Triangle Park established decades of economic growth in research and development. I hope that this standard of coordinated planning continues, with government, private industry, and nonprofits actively working together on policies that protect our market’s economic competitiveness while maintaining our high quality of life.

How are you incorporating technology and AI to improve efficiency and better serve clients?

I will be the first to say I’m not on the absolute cutting edge of technology the way some of our younger professionals are, but I stay deeply curious, and I make a point to leverage the talent on my team who excel at it. I have watched agents in our group use AI tools to generate marketing materials and streamline administrative workflows in ways that would have been hard to imagine just a few years ago.

As an experienced broker, I remain highly skeptical about data accuracy. The amount of “hallucination” that occurs within these platforms makes strict human verification and editing critical, especially when our clients’ investment decisions rely heavily on precise data and market analysis. When used correctly, these tools create incredible operational efficiency, but our professional standards and due diligence must still come first.

Looking forward, where do you see the greatest opportunity for long-term investors in the region?

There is no single correct answer for every investor, but in today’s economic environment, I really like note investing. With interest rates staying elevated and traditional regional banks showing noticeable hesitancy in their lending practices, buyers are increasingly searching for alternative financing solutions. This gap in the capital markets creates excellent opportunities for private investors to buy or structure debt.

For investors who are focused on ground-up development, buying strategic land parcels and holding them remains a strong strategy, provided your capital structure allows for a longer timeline. Not every traditional bank is willing to support an extended hold on raw land right now, but if you align yourself with the right private equity or syndication partners, land banking is an exceptional long-term play. The fundamental truth is that our region is going to continue to grow, and we will inevitably need additional inventory across every major commercial asset class.

What are KW Commercial’s top priorities over the next two to three years?

Our primary objective over the next two to three years is to steadily grow our market share while maintaining the high level of advisory service our client base expects from KW Commercial. On a team level, we want to recruit top-tier talent, specifically individuals who recognize that the real opportunity in our industry isn’t just helping clients transact for a commission, but actively participating as principals in investment and development deals.

On a deeper, personal level, a major priority of mine is to see more Latinos step into true commercial property ownership and development. I want to see more people from my community moving away from just leasing or renting space, and instead buying the dirt, building the projects, and creating a permanent, long-term financial legacy for their families.