Raleigh, Atlanta, Lead Surging Southeast Region (Part 2)

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Last week this space provided gross domestic product statistics on the Southeastern states of Florida, Georgia, Alabama, South Carolina, North Carolina and Tennessee, and discussed commercial real estate trends in Raleigh and surrounding cities. Here is the rest of the story.

A few blocks away from the Golden Belt adaptive reuse project in Durham led by LRC Properties, the former Liggett & Myers Tobacco Company building at 701 W. Main Street is coming to life as a seven-story, 286,000-square-foot life science and technology building. Maryland-based Wexford Science & Technology bought the historic property in 2014, reportedly for $7.5 million. The building features a dramatic, six-story atrium. Ground floor retail complements the lab and office space on floors 2-7.  

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The Chesterfield Atrium in Durham, NC

Duke University is among the first tenants at The Chesterfield and started moving some of its research scientists and staffers into the building in late July. Nutanix, a San Jose based cloud- computing software company, took 70,000 square feet after busting at the seams in its previous downtown office.  Biolabs offers 42,000 square feet of co-working space for life science startups in a first-of-its-kind model for North Carolina. Validic, a digital health technology company based in Durham, recently signed a lease to take about 10,000 square feet on the sixth floor of the building. Delivered to the market in January 2017, Chesterfield is 85 percent preleased.

Meanwhile over in downtown Raleigh, Kane Realty Corp. is bringing the former Warehouse Supply building to life. Now called The Dillon, it will be the first mixed-use development of its kind in downtown Raleigh’s rapidly expanding, vibrant warehouse district. Parts of the landmark structure will be preserved, yet the new building will have 18 stories of office space, two apartment buildings, 40,000 square feet of street level retail, restaurant and café space, and a rooftop dining destination. The building is scheduled for completion in 2018. 

“While the Research Triangle Park has not lost its allure with large corporate occupiers, we see startups and Millennial employee-driven companies seeking urban locations. To attract and retain the brightest minds, they want walkability for their employees and easy access to amenities. There are dozens of restaurants, cafes, bars, shops, art galleries and yoga studies within a short distance to all of these adaptive reuse projects. That’s the appeal to many office occupiers these days,” said Robin Roseberry Anders, SIOR, with NAI Carolantic Realty. 

As popular as adaptive reuse properties are these days, there is still demand for traditional corporate offices, and developers are providing new options to the market. 

Forty540 is one of the newest developments at the perimeter of Research Triangle Park. Located at 3030 Slater Road in Morrisville in the I-40 submarket, a partnership including Federal Capital Partners has delivered a five-story, 200,000-square-foot Class A office building with 41,000-square-foot floorplates and 115,000-square feet remaining to lease. To appeal to users, the project includes an Internet Café, a social hub space and a large fitness center with locker rooms for men and women. It overlooks Interstates 40 and 540, and Raleigh Durham International Airport is within a 10-minute drive. 

Over at the corner of Miami Boulevard and Page Road in Imperial Center Business Park (also near I-40 and I-540), Tri Properties is building a five-story, 150,000-square-foot office building called Churchill Hall. Delivery is expected in January 2018. Asking rate is $27.50 a foot (full service) with a $40 per foot tenant improvement allowance. The building’s main feature is oversized glass curtain walls, possibly the first in the Carolinas. 

In Cary, Highwoods Properties is speculatively building another (mostly) glass façade, 170,000-square-foot Class A office building dubbed 5000 CentreGreen. Copernicus Group has pre-leased 43,000 square feet, at least one other firm (as of this writing) has leased space in the building and others have signed letters of intent.