Pic of the Week

Edison Lofts, January 2016

Lofts, corner of Blount and Davie Streets

The Edison , or more officially the Edison Lofts (official website), are coming along. No reason this project isn’t wrapped up this year, hopefully in the first half. They are now pre-leasing units.

Edison Lofts, January 2016

The Edison Apartments, corner of Wilmington and Davie Streets

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Wow, $4150 for a 2 BR? I could live in a mansion 5 miles away and pay a full-time driver to take me downtown for that much! Says opening April, though. Maybe by then the Edison office building will be under way finally.

This building will sit empty for a long time, long time. Looking at the pricing per unit, it’s almost as if they pulled the prices out of a hat. A 580sq ft studio is more than a 2 BR apt?! A thousand dollars more!

I’ve noticed this is common for developers to post some really high prices during early pre-leasing. Guess they figure there’s nothing to lose. Prices will drop back to normal, expected levels by the time the building opens.

For those prices, I would expect an experience that is unique to downtown living. Sadly, you can find these cookie cutter apartment styles scattered throughout the city and for much cheaper cost. It would need to look more like Skyhouse if they want to charge those kinds of prices.

do you folks really feel like these developers who are spending $50 Million dollars to build a building like this are just ‘making up rents’? I can assure you that significant market analysis has been performed with real data to support the rental rates they are advertising. Not to say the they are not pushing a little higher to test the market ceilings initially but I can guarantee you that the numbers you are hearing are not pulled out of thin air. There is a demand side that justifies these rates.

I don’t think they’re making up rents, but they are testing the limits the market will bear. I still think anyone who is willing to throw away $50,000 a year in rent to live in a boring 5th floor apartment in downtown Raleigh is an idiot. This is not LA or NY…

Stew/Everyone: Would you Like my comment on The Indy Raleigh , Does Raleigh Need A Downtown Stadium ? If you click on Full Text , my comment is the 8th . May use this article as part of a baseball presentation ! Thanks !

@ Dwight
Is there a link to the Independent article?

Robert , I don’t know the link , but if you Goggle The Indy Raleigh NC , go to their homepage , click on Does Raleigh Need A Downtown Stadium , click on full text @ bottom of page 1 , 8th comment @ bottom of page 2 . Thanks a lot Robert !

Wilmington Street,downtown living at it’s finest! Conveniently located between Taz’s and the McDonald’s. Blocks away from Moore Square. Think of the characters that you’ll meet while your taking your pomeranian for a tinkle!

Thank you Josh & Dwight! A very interesting read…

Thanks so much Josh for the help !

@Dwight. I liked your Indy post. Good luck with your presentation and thanks everything that you do.

Thank You Stew ! Two investors will actually do the presentation . I help them with whatever they need .

Uncle Jesse, market analysis for target rent and a hopeful investment prospectus for unloading this to an REIT aren’t the same thing. I get the feeling they are hoping to maximize the dump off price, *despite* market analysis of rent capacity in this market. A completely empty Elan, and 90% empty Lincoln doesn’t bode well for rents averaging $4 a foot advertised here, while those two are advertising about 2.5/ft. Orulz makes a point I think holds true….the 927 West Morgan apartments started out advertising at $4 a foot and settled in at 2-2.5. Without sufficient commercial amenities downtown, $4 a foot won’t come until broad based inflation pushes it there. But if say a Trader Joes posted up on say the N&O lot, (and all the other bellwethers of a high upper middle class downtown…) then localized inflation/top end gentrification might take hold to an extent to get rents there faster.

Just got this info. from a very reliable person.
Plans will soon be submitted for a 20 story tower @ 404 – 406 Hillsborough St. This project
is different from the 301 project .

That’s very interesting! That looks to be the abandoned building and the mini-strip mall next to Second Empire. That whole area desperately needs something else there. That would be perfect! With the Holiday Inn and the two 301 towers, that is going to be quite the connection of DT and Glenwood South. And something is going across from Snoopy’s nearby, too.

@Dwight,

I actually prefer the comment from OakCity16 regarding the Indy Article. Raleigh has an excellent opportunity to get a MLS franchise. Build a downtown stadium, move the Railhawks to downtown. We have a chance to get a team in a top-tier level of soccer.

Hoping the 301 Hillsborough and the News&Observer lot become projects that transform Raleigh. I recently watched a Ted Talk that discussed the importance of creating unique architecture. We want to be the Arts Capital of the South. These two lots would be great starts.

Paul , I can understand your point & I’m glad that we can agree to disagree . What you have said , I have heard this before . Just super happy about all these projects !

Of all the properties in DT Raleigh, that 404-406 address on Hillsborough is the one that I covet the most. I have been looking at that property and dreaming for years. It’s really exciting to hear that something significant is going to happen on that land. I’ve always referred to that property as the place between the places. That is to say that I think that this is the specific spot that connects Glenwood South and The Warehouse District. I can’t wait to see what’s proposed. I’d love to see that location have a first floor full service grocer in it to serve both neighborhoods. Lots of people could reach that location by foot!

I’m glad to see that we have plans for about 6-7 new significant buildings right now. The economy feels like it is slowing again. I hope it doesn’t ruin our plans.

@Mark – FWIW, I checked availability at both the Lincoln and Elon via their respective websites. Lincoln – 172 of 224 rented for 77% occupancy rate. Elon – 111 of 216 preleased for 51% occupancy rate. I’m not sure when Elon is officially opening their doors.

With regards to MLS vs. baseball, the parcel being proposed for stadium isn’t large enough for a soccer field. I scaled footprint of the new 18,000 seat Avaya stadium (San Jose Earthquakes) and the area is just too small unless it’s possible to build stands on top of the railroad tracks that traverse the area.

With regards to Dix campus I can’t support building an MLS stadium there as some have advocated. First, it’s too far from downtown to encourage foot traffic and, two, I simply believe that a lot of other great things are possible there other than building a stadium.

I have mentioned before the idea of building MLS stadium where Cargill plant is located at S. Wilmington St. If S. Blount St. were closed there would be ample room. The city already owns some adjacent parcels. That whole area is an eye-sore that could be ripe for redevelopment if major detractors to area are removed.

@Dwight – Really happy to hear news about 404-6 Hillsborough St. Thanks for sharing. I also saw in Indy that Trig Modern furniture (located next to old Greyhound bus station) is moving before lease expires partially because owner is planning to develop apartments there. So, yet another project might be announced soon. I hope it’s not another stick built construction. Enough with those already.

6 story apartment building was announced for greyhound site awhile ago… http://www.bizjournals.com/triangle/blog/real-estate/2015/07/old-greyhound-bus-terminal-downtown-raleigh-banner.html

I like the idea of MLS stadium at Heritage Park site and building new modern affordable housing across the street like the Arbor House in the Bronx. Seems like win-win.

There is an interesting section in latest Raleigh City Council live blog (Indy) about Raleigh preparing to submit an application for the US DOT’s Smart Cities Challenge. This is a $40 million grant going to one lucky midsized city that submits the best application for an innovative transportation solution. Sixty four cities meet grant application requirements so I suppose Raleigh has a decent shot at this.

According to the blog the city apparently has been working with NC State on this application which has me wondering if this could possibly have anything to do with EcoPRT? This is a very light Personal Rapid Transit system being developed by NC State. There was a lot of press about this a couple years back. Scientific American has a good article on EcoPRT. Search “A Personal Rapid Transit System for Raleigh Commuters?” if you are interested in more detail.

Check out also ecoprt dot com. Sorry for all the posts today.

Bob brings up something I have been thinking about too lately. The economy. At a national level I think there is always a certain level of anxiety about it during election years. It can be argued a large part of the current recovery is attributed to the Fed manipulating interest rates up until recently to create the illusion of a healthy economy as opposed to a real recovery. We are going to pick a new leader this year and pretty much all the choices have different ideas compared to who is in charge now. How that will impact things has yet to be seen.

I also have been thinking about it at a local level. The inflated downtown property rates are going to be brought down to earth sooner rather than later and a lot of people will lose money from it. Unless construction costs magically get lower and the national economy stays in the hollow sort of recovery we have now, I’m worried that ideas we are seeing won’t become anything more than ideas. The last recession saved us from the atrocious out of scale monstrosity that was the Soleil Center. But it also cost us several taller buildings downtown. We might be on the verge of something similar. It’s already not cheap for investors to build or buy (causing high rents which aren’t conducive to better occupancy rates or filling ground level spots with retail) and demand for what the market currently allows isn’t unlimited. An economic slowdown would be the straw that breaks the camel’s back.

Unrelated to the economy I do hope our Smart City entry has nothing to do with that EcoPRT idea. It is costly, inefficient, and was proposed for a section of street that is already heavily served by public transit + is very pedestrian friendly. In a city that lacks decent sidewalks and has a real need for improving what public transportation we do have, I’d be very angry if our leaders decided to pursue that.

Thanks for doing that research Stew. It’s appreciated. Now I am scratching my head, because that doesn’t compare to what I see daily. I work next to Elan and not a moving truck to be seen, not a single sign of life visible even on the nights I work until 7. Lincoln does have some folks obviously living there, with interiors fixed up, and porches full of furniture, but the building is mostly dark, whether I am walking by at 6 pm or 10 pm. I wonder if there is some sort of rental accounting trick going on here, like a pre-approval for a lease that won’t turn into actual occupancy for a few months, while folks lease at current spots run out….? Anyway, Edison offers nothing different other than being right in the densest part of town, as opposed to being two blocks from the densest part of town so I remain skeptical they will command even the same rents other buildings do, let alone, those advertised. I mean, to pay a $4000 a month rent, people need to gross no less than 8000 a month and should be more like 10-12k gross. ?!?

The 406 lot is where the old grocery store is now?

Thinking those prices listed for the Edison lofts were in error. If you look at the website now, studios are listed ranging $1300 to $1500. The only unit with >$4K rent is the 1600 ft penthouse.

I played with that interactive map the other day and the problem is that it only works at 100% view. When at 100% view, the pinpoints are too crowded DT to effectively link to the individual projects. When I zoom in enough to differentiate the pinpoints, the interactive no longer works.

Edison
charter Sq N
Dillon
Salisbury street hotel

301 hillsborough x 2
404 hillsborough
10-12 story Glenwood south

Union Station
Raleigh HQ

Edison apartments
Link apartments
Elan Apartments

West 2 Apartments
Greyhound apartments

12 story hotel next to McD on Wilmington.
13 story Hilton Garden Inn at NW corner Davie & McDowell

Plus the completion of the gramarcy. That’s 17 -18 or so projects. Downtown will have a huge makeover if all of these are completed in 2-3 years time.

According to the N&O. An apartment developer has purchased Killo pest control property. Also another developer has rezoned site adjacent to Lincoln. To build row houses.

Also almost Stones Warehouse.

Almost forgot lol

The Killo Pest lot is small and I’d be surprised if anything less than 10 stories gets built there. The city will probably put a parking deck on that block soon to share with the upcoming developments.

The developer’s M.O. is cheap mid-rise large-scale apartments like Lincoln. They are quite obviously going to try to buy the adjacent City-owned land and produce another Lincoln building on this block. Sucks. I think it would be an even bigger let down than Edison apartments. Only a few park-front lots in downtown! I’d like to see Hobgood’s 18-story concept for 107 E Martin built at the Killo site.

Heck yeah Mike, Hobgood needs to be retained for a big something and this spot is very prominent. FWIW that 18 story mock up is still sitting in their office window so maybe its not totally dead even though that spot is getting some retail now (forgot what). Park front property should get the best we can produce though….I personally like a place in Denver called Titanium Lofts with its gleaming columns and all masonry and steel construction (its tacked on to a older brick building). http://relianceprecast.com/wp-content/uploads/2015/01/titLofts-600×600.jpg Anyway, I am sure ya’ll much better ideas than this even…I think its an important enough parcel for the folks here to apply pressure to the process to the extent that we can regarding design.

Reading N&O article I see that Killo Pest Control can remain at location rent free for up to 18 months which I suppose means we won’t be seeing any activity on that corner in the near future.

Hopefully the city will sell remainder of block to a different developer forcing Banner to build upwards. Would love to see something along the lines of Hobgood’s concept built there, great suggestion Mike. Considering Banner paid $1.1M for 0.21 acre site I’m sure the city can get a pretty penny for the remainder. Cost of land might not be so conducive for mid-rise apartments. I certainly hope this is the case.

I have been speculating whether Winter’s Square and adjacent property (NE corner of Martin and East St.) might be purchased by a developer soon. There is a consolidated 0.79 acres here under same ownership. New row houses are being built just north of the Lincoln. Perhaps something will soon happen to the south as well.

I don’t have a problem with the Lincoln and its location. But let’s not duplicate it on this block. There needs to be some height. Can you imagine the view from the top floors looking west? This is a very valuable block and needs to be planned with a little vision.

For those interested in Hobgood concept at 107 E. Martin their website shows details.

hobgoodarchitects dot com

I am the property manager for Link Glenwood South. We are currently 17% preleased and 4% occupied. We just opened our doors officially on Friday Jan 15th. I’m not sure where Stew received his numbers, but I do weekly market surveys with my competitors, and currently The Lincoln is occupied at 29.02% and preleased at 38.84%. Elan City Center is occupied at .94% and preleased at 5.2%. Elan City Center opened their doors this month as well, while The Lincoln open last August. Please feel free to contact me at 919-720-4141 if you have any questions regarding our community! We are super excited to be open and are leasing apartments steadily.

@Meg – FYI. To obtain occupancy numbers I went to respective website and counted the apartments advertised for rent. Perhaps these sites aren’t showing all units not yet rented because some aren’t yet in rent-able condition? Anyway, didn’t intend to mislead anyone.

I was a bit surprised to see the number I came up with for the Lincoln honestly because, like you Mark when I go by there at night the property seems very dark.

Pre-leased means no one is living there. .94% occupied sounds like 1 place has someone living in it, probably on the staff.

When is Raleigh going to build something unique, something massive like a signature tower or something. Too many gaps in the skyline. Need density and a few high rises and a stadium or coliseum downtown, those are essential. The PNC arena can go to hell… it’s too far out. Please downtown Raleigh do something to improve our sometimes embarrassing downtown. I really like Raleigh but they do things either all wrong or too small here too much. What’s wrong with building a few 35 or 40 plus story buildings? Isort the demand not here?

@Rob, You’re literally going to come in here and say that after all the projects being announced in this very topic comment section? Raleigh is flat out improving, and will continue to do so. It’s nothing embarrassing about downtown Raleigh. Embarrassing was how is was 10-15 years ago ( not even that long ago actually). Density is more important than ultra tall buildings imo. Raleigh density is the highest of the big cities in NC (if I’m not mistaken). It needs to fill out more, not concentrate so much on height. Also, what other bigger cities in NC have this so called “unique” architecture you speak of?

@ Dwight, any updates on the proposed 404 – 406 Hillsborough St. project?

David , I have not heard anything since my friend gave me the info. ! I will give him a call & post if anymore info. has surfaced .

@ David , 404 / 406 / 414 Hillsborough St. Developer is suppose to have a meeting with city officials this coming Friday ! Will let you know when I hear anything about the meeting . Group SCP York’s Powerhouse Project will add floors to their parking deck but no plans are in for this yet . Tobacco Road is leaving 222 Bldg. & moving to Powerhouse Square .

@Dwight, is that floors of parking or floors for apartments, office space etc?

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