I'm honestly perplexed about the lack of big projects in Durham. Raleigh currently has like 12 high rises proposed in some fashion or another, but Durham is mostly smaller projects. I expected the ATC2 project to get moving a while ago.
I find the ATC situation interesting in the sense that if you look back at articles from mid 2017 about University Ford moving it said they expected to be moved out of that space by mid 2018. So presumably they have had more than enough time to plan the development of this space.
Similarly, Austin Lawrence says they want to break ground on the South Bank building project in Q1 2020. I realize they want to be fully wrapped with One City Center but they’ve owned that property since I think 2013?
Edit: The assumed Northgate Mall redevelopment will also be a major project a stone’s throw from the downtown center. Given that the formal sale just happened at the end of 2018 and there is already a massive existing structure there I expect that will take quite some time.
I would love to break 540 feet for something in this spot. It would be awesome to have something taller than Raleigh (PNC Tower). I almost bet something "tall", like more than 25 stories is being pro-posed or we would have heard something already. It doesn't make sense to me to delay this long unless something they were planning was pretty controversial (height) or they would already be demolishing. I really really doubt we can break 900 ft (the tallest in Charlotte is 871 feet) so beating Raleigh on height would be cool enough for me. Although if we could just get two towers more than 20 stories (maybe 250 ft?) I would be happy. Durham needs more height and I love watching Raleigh get jelly
It’s definitely a perplexing situation. They held community forums more than two years ago to engage with the public on ideas for the site. I guess I could buy that whatever they are planning will be controversial as far as height but will anyone really care in that location? In any event, I think CBC has earned the benefit of the doubt from Durham residents given the work on ATC and with the Bulls.
I have a theory about that. Note, this theory is based on no real knowledge whatsoever, but it appears that the real estate cycle is ready for a downturn (and likely even the whole economy for some sort of pullback/recession).
ATC has ridden (and helped create) a great wave over the past decade+
Capital Broadcasting knows better than anyone how important timing is for these big projects. Construction costs are high and there is a ton of demand right now. I wouldn't be surprised if they made the decision to press pause on this development until the timing is a bit better. There are plenty of good projects that have failed due to bad timing.
Again - just a theory, but if that is the case, I am happy to wait in order to see the project be a success!
I suspect you’re probably right on some level Dave. No other explanation for the silence really makes sense.
My concern is what will happen if a few of these large projects get put on hold then we go through a modest economic correction. It could amount to a fairly significant setback in the evolution of the city.
FWIW my wife was chatting with a tenant of the South Bank building this morning and he told her that his lease has been extended to the end of 2020. The last public comments in January from the Austin Lawrence team said they were in the planning phase and expected to break ground in Q1 2020. The overall silence and this anecdotal evidence suggest that likely won’t happen and that the project could be significantly delayed. Wondering if there are issues with One City Center or perceived softness in overall demand. Possibly overreacting a bit but I’m concerned that if some of these bigger projects don’t get off the ground we are left with a downtown landscape that is primarily filed with low-rise residential.
True, but I think I would rather them be patient. It may take longer, but if they built during an expensive year and then tenant demand drops during a pullback, they would be screwed and it could end up being worse for the city overall.
It's disappointing if the timeline is a little longer, but may be much better in the long run.
True, good counterpoints Dave. And all the developers involved, especially CBC, have a major commitment to Durham now and a vested interest in its success.
I was also thinking this morning about how the situation with WeWork might impact One City Center and Durham ID. It seems certain after the failed IPO, removal of the CEO and challenges raising capital even at slashed valuations that a radical right sizing will be required. Obviously we don’t have as much concentration as New York but those two locations are fairly significant space commitments within their respective developments. Would be interested in how they are performing on an individual location level. WeWork has all of these spaces structured as independent legal entities so presumably they can fold underperforming locations one at a time without repercussions to the parent. It seems from pure observation that demand was strong for the initial opening but they’ve certainly committed a lot of resources to a fairly small market. And I’m pretty sure I read that one of their competitors has committed to a full floor in the 555 Mangum building.
I totally agree that the WeWork story is a really interesting one to watch. I also think that Durham needs more office space, so I am thinking that maybe WeWork keeps both Durham ones, but I have no idea. Like you said, there seems to be demand there.
It will be fascinating to see how that story plays out.
I want to comment on the demand problem folks have said...., since I have some data. Every single condo was sold out before one city center was topped, parking decks at ATC have waiting lists, we have no office space to expand into at ATC for my company, hotels are constantly full meaning folks commute from the airport hotels to Durham. I am curious why people think there is a demand problem?