Greg Hills, Founder & Managing Partner, Austin Lawrence Partners

Invest: spoke with Greg Hills, founder and managing partner at real estate development firm Austin Lawrence Partners, about Durham’s development trajectory, the importance of designing for connection, and why cities must keep investing in their downtown cores. “If you want to understand a city, you have to talk to everyone,” Hills added.

How would you describe the real estate development environment in markets like Durham and similar high-growth cities?

We are most familiar with downtown Durham, so that is where my perspective comes from. Right now, it is a wait-and-see development market. There are a lot of shifting forces at play, from construction costs to uncertainty around how AI and robotics may reshape jobs, demand, and the broader economy. Because of that, several sizable projects are sitting on the sidelines until their programs make sense again.

We decided to continue moving forward through the middle and end of COVID, and that was not the easy choice. Many other projects that could be exciting for downtown are paused for now. The interest is there, but the confidence to move ahead is uneven.

Durham’s story also needs to be seen in context. When we arrived around 2012, downtown Durham was still blighted. There were boarded-up buildings, vacant sites, and a real sense that the urban core needed help. City leadership at the time was focused on turning that around, and that support mattered. A lot has improved since then, but the work is far from done. In some ways, we have only brought downtown up to normal. We have not yet made it exceptional.

That is why I think it would be a mistake for city leaders to assume the job is complete and shift their focus entirely elsewhere. Durham is still in the early innings. If the core is not nurtured through better public spaces, stronger streetscapes, and continued support for local and minority-owned businesses, there is a risk of backsliding.

What trends are shaping demand for mixed-use and multifamily in downtown Durham?

A big part of the demand comes down to lifestyle. This region has become wealthier over time, and there is a segment of the market that wants a more urban, walkable, connected experience. These are people who can afford to spend for a condominium or a higher-end rental, and they want to be able to walk to restaurants, entertainment, workspaces, and social spaces.

The Duke connection is also important. You have Duke parents, alumni, medical professionals, and others with ties to the university who would like to have a place downtown. Then you have people moving into the area from other cities who want a lifestyle that feels more urban and less car-dependent than what they might find elsewhere in the Triangle. Durham is in a strong position to serve that market.

What increasingly matters, though, is not just the unit itself. It is the entire living experience. Amenities have become central, especially in multifamily. People want spaces that feel welcoming, but they also want places where they can connect. They want co-working areas, gathering spaces, and amenities that make it easier to meet neighbors and feel part of a community. That has been a major part of our philosophy. We are a family organization, and we have always believed in creating environments that foster close relationships, both within the building and in the surrounding neighborhood.

The other factor here is uncertainty. One of the things we think about is how AI may affect the white-collar workforce, especially those in the salary bands that often make up a large share of the renter market. If people are worried about job security, they may hesitate to upgrade their apartment, buy a home, or make other long-term commitments. That can make the market feel more stagnant. Durham may still be one of the places that benefits from economic change because of its universities, hospital systems, and concentration of talent, but that does not mean it is immune to disruption.

How are financing conditions and capital availability influencing which projects move forward?

From the financing side, what we hear from lenders is that there is money available for the right projects. Debt is not necessarily the main issue. The bigger question is whether the project fundamentals are strong enough to justify moving ahead. The pro forma still has to work.

The equity side feels more cautious. There is capital out there, but a lot of investors are waiting to see where the world is headed. That hesitation affects real estate decisions just as much as local market conditions do. It is one reason so many larger projects in downtown Durham remain on hold.

To make projects pencil today, you have to be realistic about what the market will support. Office is clearly not a robust category right now. Multifamily demand exists, but it is hard to make large or tall apartment-only buildings work, especially at higher levels of density. Rents are not yet high enough in many cases to justify that kind of construction on their own.

Our answer has been a hybrid model. We combine condominium sales at the top end with apartments, and that helps support the economics of the overall project. The condo side can generate margins that help subsidize what remains, allowing us to reach an acceptable return. In this environment, creativity in product mix can be just as important as access to capital.

How do you take community alignment into account when planning and communicating new developments?

For us, community alignment starts with being genuinely embedded in the place where we work. We are a boots-on-the-ground company. We are not the kind of group that joins organizations just to put our name on a brochure. We believe in really integrating into the community, getting to know our neighbors, learning what they want, and understanding what they think the city needs.

That means maintaining relationships with downtown organizations, city stakeholders, business leaders, and the people who shape the day-to-day life of downtown. It is not only about the big names. It is also the restaurant managers, the local business owners, the people who live in the buildings, and the people who use the public spaces every day. If you want to understand a city, you have to talk to everyone.

Looking ahead, what opportunities do you see in Durham over the next three to five years?

The biggest opportunity is to build around human connection. If the next phase of the economy is shaped by AI and automation, then people are going to crave community even more. They will want places where they can get out, see people, interact, have fun, and feel part of something. Cities and buildings that support that kind of connection are going to stand out.

That means creating common spaces, programming experiences, and making sure neighborhoods feel like home rather than temporary stopovers. Sometimes it can be something simple, but if it brings people together, it matters. We think that kind of interconnection is going to become more valuable, not less.

The second major opportunity is creating stronger connections to the environment. Even in downtown settings with tall buildings, people want greenery, parks, walkability, and access to nature. Those elements improve quality of life and make urban living more attractive for families and individuals alike. Durham has opportunities in that area, including the potential to reactivate an abandoned rail corridor into miles of trails and public space. That kind of investment could be transformative.

We also see opportunity in mixing different types of residents within the same building. In our experience, having both condo owners and renters creates more energy and more year-round activity. It also creates the possibility for mentorship and unexpected relationships between people at different stages of life and career. Those connections are meaningful.

Ultimately, Durham has all the ingredients to keep growing and thriving, but it cannot afford complacency. The city needs to keep investing in its core, keep improving the public realm, and keep supporting the kind of development that makes downtown inclusive, livable, and dynamic. If it does that, the future is promising.