Constructed between 1923 and 1924 on Fayetteville Street and named after Sir Walter Raleigh, the hotel was nicknamed North Carolina's "third house of government", due to its location and being a focal point for state political activity until the 1960s.

The hotel became the unofficial headquarters of the North Carolina Democratic Party, at the time the dominant political force in the state.

In addition to legislators, the hotel was home to lobbyists, aides, jurors, newspapermen, businessmen and other influential individuals over the next three decades.

[3] During the 1960s, suburban motel development, the completion of the new state Legislative Building, and general downtown decline affected the hotel's business.

By 1975, as downtown Raleigh decayed and demand for hotel rooms plummeted, the majority of the building had been converted to offices for the North Carolina Department of Transportation and other businesses.

[13] It was sold again on January 2, 2019, for $16.8 million to Capital Realty Group,[14] which announced plans to renovate the structure but continue using it as senior housing.