Federal Capital to Break Ground on Third Phase of Downtown Durham Project

by Adriana Pop, Associate Editor

Construction on the third phase of West Village in downtown Durham is expected to start in June, Federal Capital Partners announced.

The Maryland-based developer is planning 156 luxury apartments in a new six-story building which will be located on the block between West Main Street and West Morgan Street. Upon completion, the project will offer a mix of studios, one- and two- bedroom units. Bell Partners of Greensboro will be in charge of leasing.

Amenities will include a club/lounge area, on-site bicycle storage, secure access, as well as an elevated pool deck. Residents will also have access to the popular and environmentally friendly Zipcars program.  

Consisting of the conversion of two former tobacco warehouses, the West Village development is considered to be the largest historic renovation project in North Carolina. According to the Triangle Business Journal, the first two phases have been developed by a real estate company led by former Duke basketball stars Christian Laettner and Brian Davis. The total investment in the project amounted to $170 million.

In 2012, Federal Capital acquired the majority interest in the properties. Built in 2000, West Village I offers 241 loft apartments, 10,000 square feet of retail space, as well as parking. West Village II was built in 2007 and includes 212 luxury lofts, 70,000 square feet of office space, as well as 30,000 square feet of street level retail.

“The next phase of West Village expands the footprint of a key participant in revitalized downtown Durham and provides better connectivity to the heart of downtown,” said Bryan Kane, vice president of Federal Capital Partners. “With strong occupancy at our existing West Village properties and continued demand for apartments in the downtown district, we view this phase as important to our West Village community of residents, retailers and businesses, and also invigorating to the entire city.”

Photo credits: http://www.bellapartmentliving.com/NC/Raleigh/West-Village

Local Developer Proposes New Plan for Mixed-Use Stanhope Center in Raleigh

by Adriana Pop, Associate Editor

Local developer Melton “Val” Valentine has submitted a new plan for a three-building mixed-use project along Hillsborough Street near N.C. State University in Raleigh.

According to the Triangle Business Journal, Valentine is proposing two five-story retail and residential buildings, as well as a 70-foot-tall parking deck. The new development will spread across a 12-acre site known as Stanhope Center, bringing a total of 154 apartments and more than 55,700 square feet of retail space. The Site Group LLC of Raleigh is designing the project, the newspaper reports.

One of the buildings will be located at the corner of Concord and Hillsborough streets. The 70-foot structure will offer 40 residential units and about 38,000 square feet of retail or restaurant space.

Valentine’s initial plan called for the construction of a nine-story building with high-end apartments and retail space on the ground floor. However, the plan has been rejected by the City Council because of its density, so the project had to be scaled down.

The other building will replace the Katmandu nightclub on Friendly Street. It will feature first-floor retail space, possibly a Kerr Drug store, as well as apartments on the upper floors.

In other news, Duke Realty Corp.’s Raleigh office completed 466,686 square feet in leases during the first quarter of 2013. The transactions involved new leases, renewals and space expansions of the company’s office and industrial properties in the Triangle.

“Interest in Duke Realty properties continues to be strong given their superior location and quality,” said Jeff Sheehan, senior vice president of Duke Realty’s Raleigh operations. “Our success in attracting new tenants and retaining existing clients is indicative of the strength of our portfolio as well as our team.”

Hooker Manning and Alban Barrus represented Duke Realty in all of its Raleigh office leasing transactions. Manning also brokered the company’s industrial transactions in the region, along with Jackson Rives of Thalhimer.

Photo credits: The Site Group via www.bizjournals.com

Developers, City Move Forward on $54M Spec Office High-Rise in Downtown Raleigh

by Adriana Pop, Associate Editor

Locally-based developer Dominion Realty Partners has joined Charter Square LLC and the City of Raleigh to develop a speculative office project in the heart of the city’s downtown.

Construction on the first of the two Charter Square buildings in the 400 block on Fayetteville Street is expected to begin this fall and take about a year to complete. At 215 feet, the structure will be slightly taller than the Marriott City Center Hotel across the street.

According to the Triangle Business Journal, the cost of developing the 11-story Class A office tower amounts to $54 million. Designed to achieve LEED Platinum certification, the steel and glass building will offer 225,000 square feet of office and retail space, including direct underground parking and an outdoor plaza courtyard.

So far, the property’s leasing commitments total no more than 35,000 square feet. Three of the four tenants are participating in the project: leasing agent CBRE, designer JDavis Architects, as well as the tower’s developer, Dominion Realty. The company will be located in the building to offer on-site management services. Additionally, G Patel of Eschelon Hospitality plans to open a restaurant in one of the structure’s corner floor spaces.

“It is a big risk because it is spec … but I wouldn’t have committed to doing it without that site in downtown Raleigh,” Andy Andrews, president and CEO of Dominion Realty Partners told the newspaper.

The downtown Raleigh area has one of the lowest office vacancy rates in the Triangle. Furthermore, the rental rate in the new building will be $29.50 per square foot, lower than other Class A office properties in the city.

“Charter Square will prove to be another driving force that brings businesses to our community and makes Raleigh one of the most sought-after places to live and work in the country,” said Mayor McFarlane in a news release.

Charter Square is a joint venture comprised of East West Partners of Chapel Hill, Craig Davis Properties of Cary, as well as two Raleigh-based companies, White Oak Properties and Beacon Street Development. The NewsObserver reports that in 2008, the group acquired the 1.75-acre Charter Square lot from the city for $5.28 million. Later in 2010, the developers completed a 550-space underground parking structure at the site, which the city acquired for $25.5 million. The team had also planned the construction of two mixed-use towers, but their plans were stalled because of the recession.

Photo credits: http://www.dominionrealtypartnersllc.com

Austin Lawrence to Develop $40M Mixed-Used Tower in Durham’s Historic District

by Adriana Pop, Associate Editor

The Historic Preservation Commission has approved the construction of a 26-story mixed-use building in the heart of downtown Durham. According to the NewsObserver, the proposed “City Center” high-rise will include 25,000 square feet of ground-floor retail; 70,000 square feet of offices; and 133 luxury apartments on the upper 21 floors.

Austin Lawrence Partners of Colorado is developing the project, which will be located inside the city’s historic central business district, at the former Woolworth’s site between Parrish and Main streets. Last November, the company purchased the site, along with four adjacent buildings which will be incorporated in the new development. Greenfire Development sold the properties for $3 million.

Austin Lawrence President Greg Hills told the newspaper that the cost of the new high-rise would amount to $40 million. Oz Architecture of Denver, DHM Design of Raleigh and Kimley-Horn will be working on the project. Pending further approvals, construction is expected to start in the summer of 2014 and be complete in two years’ time.

In regional news, the Triangle Business Journal reports that the Rams Plaza shopping center in Chapel Hill has recently received its first major upgrade since it was built in 1982. The $1.5 million renovation brought improvements to the building’s facade, courtyard and parking areas.

The retail center is owned by Rams Plaza Associates LLC, a joint venture entity comprised of three investors from Charlotte, New York and Florida. Finley Design Architecture + Interiors was the architect of the renovation project.

In 2011, The Kalikow Group of Westbury, N.Y., Argus Development Group of Charlotte and Carlisle Development Group of Miami acquired the 113,000 square feet property from Madison Marquette of Washington, D.C. for $13.25 million.

The Rams Plaza shopping center is located at 1728 Fordham Blvd. near University Mall and has a 95 percent occupancy rate. The property is anchored by Food Lion and includes Bailey’s Pub, Tire King, Eclipse Tanning and a CVS pharmacy among its tenants.

Photo credits: http://www.alpaspen.com/durham.php

Level Homes Launches National Expansion in the Triangle

by Adriana Pop, Associate Editor

In its first foray outside Louisiana, Baton Rouge-based Level Homes is planning to develop three communities totaling 230 single-family homes in Apex, Cary and Durham. According to the Triangle Business Journal, the company has recently opened a new regional office in downtown Raleigh to market its expansion.

In Apex, Level Homes is developing the Ellington Place community comprised of 52 home lots. The company acquired the 14-acre site in October for $2.04 million and plans to open a model home here this April, which would be the Triangle’s first. Prices are expected to start in the $250,000 range.

The company’s largest project in the Triangle will be located in east Durham. Dubbed Cardinal Oaks, the new community is comprised of 140 home lots with prices starting at $150,000. The houses will be completed in late summer, Level Homes announced.

In June or July, Level Homes will break ground on The Estates at WestHigh in Cary. The community includes 38 home sites spread across 20 acres of land the developer acquired in December for $2.5 million. Prices here will start at $400,000.

“We are a builder that provides homes that customers aspire to buy at all income levels. This comes with a deep understanding of any market we enter, and careful planning of our homes and communities,” said Todd Waguespack, Level Homes’ managing partner.

According to the National Housing Report, Raleigh’s real estate market has shown a 30 percent increase in home sales from 2011 to 2012. Furthermore, the area’s population ranks among the fastest growing in the country.

In other news, Belmont Sayre developer Ken Reiter is planning to build approximately 119,000 square feet of commercial and residential space on North Greensboro Street in Carrboro. The NewsObserver reports that the town’s Board of Aldermen has unanimously approved a conditional-use permit for the project. The construction schedule is yet to be determined.

Dubbed Shelton Station, the new development will include a two-story, 24,000 square-foot commercial building offering office and retail space, as well as a four-story L-shaped residential complex with 94 apartments, 20 of which will be affordable. The project will also provide 170 parking spaces.

Photo credits: levelhomeslifestyle.com

Virginia Beach Investor Acquires West Raleigh Office Building for $8.3M

by Adriana Pop, Associate Editor

Continental Capital Management of Virginia Beach, Va. has recently purchased a three-story, 61,412-square-foot office building in West Raleigh. According to the Triangle Business Journal, shopping mall operator CBL & Associates Properties sold the asset for $8.3 million.

At the time of sale, the building at 1500 Sunday Drive within Trinity Corporate Park was 97 percent leased. Its tenants include the Hughes, Pittman & Gupton accounting firm, First Point Management Resources and RCI. The property was developed in 2000 and has a tax value of $9.2 million.

Scott Adams, Ben Kilgore and Brian Carr of CBRE-Raleigh brokered the transaction on behalf of the seller. The firm will also manage the building and handle leasing services, the newspaper reports.

West Raleigh is one of the best performing office submarkets in the region. According to a recent report released by CBRE, the area’s office vacancy rate during last year’s fourth quarter was 11.7 percent, one of the lowest in the Triangle.

In multifamily development news, White Oak Properties of Raleigh is planning to restart a long-stalled residential project at N.C. State University’s Centennial Campus on Capability Drive. The NewsObserver reports that the developer’s proposal for the first phase of construction includes up to 111 townhouses and condominiums that would add to the 33 already-completed homes.

If approved by both the city and the university, the project could break ground during this year’s third quarter. The initial phase of the new community will cover about half of the 15-acre site located on the banks of Lake Raleigh.

In 2001, a partnership between Craig M. Davis and Comstock Homes planned to build 358 townhouses and condominiums at the site. The project eventually fell through and about a year ago, the university selected White Oak to restart development. The company’s owner, Roland Gammon, told the newspaper that this time, construction will be segmented in smaller phases.

Photo credits: http://www.loopnet.com

Oaktree-NFR Partnership Acquires 450K SF Wells Fargo Operations Center in Raleigh

by Adriana Pop, Associate Editor

An affiliate of Oaktree Capital Management L.P., in partnership with National Financial Realty Inc. (NFR) of Los Angeles, has recently purchased the 450,000-square-foot Wells Fargo office park in west Raleigh, the Triangle Business Journal reports. Located at 1100 Corporate Center Drive, the three-building property has a tax value of $64 million.

The sale was part of an approximately $240 million transaction through which the partnership has acquired 40 office buildings across the country from First States Investors B, L.P. The 3.4 million-square-foot office portfolio is 90 percent leased on a long-term basis to Wells Fargo Bank.

“This off-market acquisition, principally backed by 11 years of Wells Fargo credit, at a 50 percent discount to replacement cost, is another example of Oaktree’s commitment to relationship-based transactions with well-positioned strategic operating partners like NFR, in addition to lenders and borrowers in need of capital solutions,” said John Brady, managing director and head of global real estate for Oaktree.

The Wells Fargo portfolio purchase establishes NFR as the largest privately-held investment concern focused on the acquisition and operation of properties leased to regulated financial institutions.

In multi-family transaction news, Hawthorne Residential Partners of Greensboro has partnered with Midway Investors L.L.C. of New York to acquire the Dunhill Trace apartment community in Raleigh.

According to the Triangle Business Journal, Hawthorne-Midway Dunhill L.L.C. has purchased the 250-unit property from a subsidiary of Prudential Real Estate Investors of Atlanta. The acquisition price was $23.1 million, county records show.

Dunhill Trace is located near the intersection of Glenwood Avenue and Pinecrest Road. Prudential acquired the community immediately after its opening in 1995.

Hawthorne Residential Partners manages 15 apartment properties In the Triad, including three in Raleigh: the Pine Winds Apartments, Lynnwood Park and Calibre Chase. In Durham, the company manages the Hawthorne at the View community, as well as and the Spring Ridge Apartments.

Photo credits: Justin Sullivan/Getty Images

Hotel, Retail Development Breaks Ground on 6.4-Acre Rezoned Site Near Interstate 40

by Adriana Pop, Associate Editor

A joint venture between MJM Group and Griffin Stafford of Charlotte is currently developing a new hotel and retail center in Durham.

According to the NewsObserver, plans call for a 105-room hotel, as well as 30,000 square feet of retail, restaurant and medical office space. The developers have spent several years rezoning the site of the project, a 6.4-acre property on Chapel Hill Boulevard near Interstate 40.

Called Gateway Terrace, the new development will house a Home2 Suites extended stay hotel, a Mattress Firm outlet, as well as three restaurants: PDQ, Chipotle and Bruegger’s. The cost of the project is between $20 million to $25 million.

Anuj Mittal, who runs MJM along with his wife Vinita, told the newspaper that he expects to complete construction on the retail portion by the end of the year. The new hotel will be completed by next year’s first quarter.

The Gateway Terrace is MJM’s third and largest hotel-driven project in recent years, the newspaper reports. The company’s other developments include a Courtyard by Marriott hotel in Raleigh (pictured) and a $17 million hotel and retail project currently under construction in Charlotte.

In regional news, a Wilmington-based real estate investor group has purchased the HHGregg, Inc. building at 1401 Piney Plains Rd. in Cary.

The Triangle Business Journal reports that Meeting Street HHG LLC has acquired the 29,000-square-foot property from DDR Corp. of Beachwood, Ohio for nearly $3.7 million. The store, which will continue to house home appliances and electronics retailer HHGregg, was purchased with a 25 percent discount to its $4.95 million tax value.

Capital Pacific represented DDR in the sale, while Drew Logan with The Shopping Center Group commercial real estate firm in Raleigh represented the buyer.

DDR still owns a multitude of retail properties in the Triangle, including the Alexander Place Promenade shopping center in Raleigh, Beaver Creek Crossings in Apex and Meadowmont Village in Chapel Hill.

Photo credits: http://www.marriott.com/

Raleigh’s Smoke-Free Apartment Communities in High Demand

by Adriana Pop, Associate Editor

Residents at the new Water Garden Village community in northwest Raleigh can breathe easy on the entire 11-acre property. According to WRAL, the recently opened 100 percent smoke-free apartment complex has been successful, leasing within nearly a month of opening.

Located at 8441 Mount Valley Lane, the 60-unit community has been developed by nonprofit DHIC. The newspaper reports that the property’s non-smoking policy extends beyond apartment walls and includes the fitness center, the clubhouse, the playground and even the laundry facilities.

“We were concerned that it might even limit our ability to rent the apartments,” DHIC President Gregg Warren said with regard to the smoking restriction.

The popularity of such communities marks the beginning of the smoke-free rental housing trend, experts say. Clearly, the smoke-free living option takes healthy housing one step further, bringing tranquility to residents trying to avoid second-hand smoke. On the other hand, the benefits for landlords involve significant savings in clean-up costs of vacant units.

The Water Garden Village is among the first smoke-free apartment complexes in the Triangle. A similar community called the Wilmont, which opened two years ago, is also in high demand. Still under construction, the property is located in north Raleigh on Hillsborough Street.

In other news, M/I Homes Inc. is currently building new residences in 15 Triangle communities, including Raleigh, Cary, Durham and Holly Springs. The Triangle Business Journal reports that the developer has recently added three projects to its regional portfolio: Briar Chapel in Chapel Hill, Traditions at Heritage in Wake Forest, and Wilder’s Woods at Flower’s Plantation in Clayton.

The company is building single-family homes, as well as townhomes, with prices ranging from about $150,000 to $600,000. With the disposition of 317 residences, M/I Homes’ Raleigh division registered its best sales year in the Triangle throughout 2012. The office opened in 1988 and is led by Ed Kristensen.

Photo credits: www.apartmenthomeliving.com

Centennial Acquires Multi-Family Complex from JP Morgan Affiliate for $39M

by Adriana Pop, Associate Editor

Atlanta-based Centennial Holding Company LLC recently purchased the 270-unit Addington Farms apartment community in Durham, which it renamed Century Trinity Estates. The Triangle Business Journal reports that an affiliate of J.P. Morgan Investment Management Inc. of New York sold the property for $38.6 million.

Located at 240 Ivy Meadow Lane, just minutes away from Duke University and UNC Chapel Hill, the 33-acre pet-friendly community offers luxurious one-, two- and three-bedroom garden-style apartments, as well as townhomes and cottages. Amenities include a resort-style swimming pool with complimentary poolside Wi-Fi, a fitness center, media center, as well as a lighted tennis court and a picnic and grilling area.

The property’s new owners plan to upgrade the homes with granite counter-tops, wood flooring and improved appliances. First Communities Management of Atlanta will manage the complex.

Centennial Holding’s similar properties in the Triangle region include the 280-unit Century Creek apartments in south Durham, the 266-unit Century Carrington Park apartments in Morrisville and the 170-unit Century Centerview apartments in Raleigh. The company was co-founded by Augusta National Golf Chairman Billy Payne.

In other news, the six-story Genworth Financial office building on Six Forks Road in north Raleigh is for sale. According to the Triangle Business Journal, CBRE-Raleigh is currently marketing the five-acre property. The 129,347-square-foot structure is fully occupied by Genworth Mortgage Insurance Corp., a subsidiary of Genworth Financial, Inc. of Richmond, Va. The lease extends through December of 2019.

The facility was developed in 2009 by Dominion Realty Partners and its partners, Helvetica Flagship of Charlotte and Newcastle Properties, as a build-to-suit for Genworth. In 2010, it became the first building in Wake County to receive LEED Gold certification from the U.S. Green Building Council and the Green Building Certification Institute, for both core and shell. MSTDS Architects of Atlanta and Piedmont Land Design of Raleigh were the project’s designers.

Photo credits: http://century-apartments.com/century-trinity-estates