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C M Y K

8B THE NEWS & OBSERVER

Business
MONDAY, SEPTEMBER 29, 2003

On the ON SITE

Commercial
Each week we’ll update

shoulders
a project in the Triangle.
Peakway

Real Estate
Market

of a giant
Square

Prop
osed
Oliv Apex
e Peak
Cha way
pel

T
he world’s biggest retailer
is behind a huge addition
to Rivercrest Realty Asso-
ciates’ portfolio.
The Raleigh company led
investors who paid $80 million
for 15 shopping centers adjacent
to Super Wal-Marts in six states.
“The supercenters create
huge amounts of traffic for
retailers, and our properties get
to piggyback on that,” said
Jonathan
REAL DEALS Gaines of
Rivercrest
Realty. “The
properties are
appreciating
in value and
produce a
good yield.”
The acquisi-
Steve tions boost
Cannon Rivercrest’s
portfolio by
about a third
to about $250 million.
The shopping centers cover
about 900,000 square feet next
to Super Wal-Marts in Hender-
sonville, Forest City, Shelby
and Southport, as well as in
Salisbury, Md.; Harrisonburg,
Radford and Bluefield, Va.;
Princeton, W.Va.; Gaffney,
Boiling Springs, Greenville,
Columbia and Florence, S.C.,
and Macon, Ga.
Rivercrest isn’t planning on
developing any Wal-Marts itself,
but Gaines said he would be
interested in buying more shop-
Rd.
Hunter St.
55 Apex
A NEW PROJECT | F0R A BUSY DEVELOPER
Area
detailed DURHA
M
WAKE
WHAT: 56,000-square-foot mixed-used
building.
WHO: Developed by Centdev Properties
of Cornelius, leased by Amy Watkins with
Richards Commercial of Raleigh.
DATES: Construction began in April and
finishes in November.
MAJOR TENANTS: Original Italian Pie
restaurant, Re/Max Highlander real estate.
FOR THE RECORD
A weekly snapshot of various trends
in the commercial real-estate market
SOUTH DURHAM
New stores have continued to
be attracted to the area near
The Streets at Southpoint mall,
giving the South Durham retail
market one of the lowest
vacancy rates of any market in
the Triangle.
Bernie Czysz Sr. uses a torch to cut up pieces of steel at the construction site of the former Hudson Belk building on
Fayetteville Street Mall in Raleigh. Vaughn King is turning the building into condominiums and retail space. Vacancy rate, by year
STAFF PHOTO BY JOHN ROTTET 3.7% 4%

The King of downtown

ping centers like the ones he just 3%
bought. The Triangle has Super 1.5%
Wal-Marts in Fuquay-Varina and 2%
Clayton and one under construc-
tion in northwest Raleigh. 1%
Gaines joined Rivercrest in
1992, and his family is a major 0%
’00 ’01 ’02 ’03*
investor in the company. Gaines’ BY STEVE CANNON one of the biggest developers in town during the next year, in- * First six months
STAFF WRITER Area Jones St.
partner, Stan Werb, started downtown Raleigh by buying shown cluding Progress Energy’s new
buying commercial property in 1/8 MILE
In the year and a half that it’s buildings that others have RALEIGH 400,000-square-foot office tower
the 1970s in New York. Today, been on the market, most of the shunned or passed over as too ex- going up on Wilmington Street,
Rivercrest owns property from activity at the 333 Corporate pensive.
Edenton St.
a planned condominium build-
RETAIL
Capitol ABSORPTION*
upstate New York to Florida. Plaza building in downtown King bought a dilapidated tex- ing across from City Hall and
Hillsborough St.
Rivercrest owns three shop- The closing of Kmarts in East
Wilmington St.

ping centers in the Triangle —
Raleigh has been tenants packing
up and leaving.
tile mill off South Saunders Street
in 2001 and is so enthusiastic
renovation of the former Heilig-
Morgan St. Levine furniture store. Wake County and North
Blount St.
Fayetteville St. Mall
Salisbury St.

Timberlyne in Chapel Hill, To Raleigh developer Vaughn with the renovation of the build- “What you’ve got is a series of Durham led to a drop in the
Hargett St.
Timber Crossing in Garner and King, that’s the attraction. ing, now called Caraleigh Mills, projects going forward in the amount of rented space in
McDowell St.

Village Shopping Center in those markets in the first half

King signed into condos that he plans to build downtown, and that’s good of the year.
Durham — and several office Martin St.
a contract to a second phase next door. news,” Meeker said. “The im-
buildings. buy the 15- In March, King bought the for- Belk portant thing is that we get them In square feet
building
Dawson St.

■ ■ ■
To lead leasing and manage-
ment of its newly expanded
portfolio, Rivercrest hired bro-
ker Vijay Shah from Advantis
GVA in Chapel Hill. In seven
and a half years at Advantis,
Shah’s deals included the sale of
Waverly Place shopping center
in Cary, the sale of Hickory
Corners shopping center in
Hickory for $10.7 million and a
45,000-square-foot lease to Food
Lion at the Carrboro Plaza
shopping center at N.C. 54 and
Main Street.
Carrboro Plaza was Shah’s
first and last assignment at
Advantis. In 1995, the 125,000-
square-foot center had lost a
Rose’s department store and
was about to lose another major
tenant. During the past seven
years, Shah found new tenants
and developed outparcels on the
property. This month, Shah
brokered the property’s sale to
an Athens, Ga., investment
group for $10 million.
Tips? Deals?
Call Steve Cannon at 829-8917
or scannon@newsobserver.com.
story office
tower on
Fayetteville
Street Mall,
which is los-
ing its two
biggest ten-
Vaughn King a n t s a n d i s
says his likely to lose
company can t h e l a r g e s t
handle four renter left,
projects Progress En-
at a time. ergy, when
that company
opens a new downtown head-
quarters next year.
King said he wants to remake
333 Corporate Plaza as a condo-
minium, selling office space on
the middle floors, offering the
top four floors as a dozen or more
apartments and several stores on
the first floor as a complement to
his project next door: renovation
of the former Hudson Belk into
64 condos and retail space.
“We come in with new ideas,”
King said. “Each one of the build-
ings we go into, we’re taking a
different approach, like chang-
ing out offices for residential.”
The Corporate Plaza building
would fit King’s growing port-
folio. In a year, he has become
mer Hudson Belk building on
Fayetteville Street Mall. Taking
over 333 Corporate Plaza means
King will have to find buyers for
more than half of the 140,000
square feet in the office building.
The opening of Caraleigh Mills
is about two and a half months be-
hind schedule, but King insisted
that the four projects hasn’t
spread his company too thin. He
said he has increased his con-
struction company’s payroll to
about 200 from 50 last year to
speed up completion of the May-
wood Avenue condos.
“I’ve got good people manag-
ing these projects; we can handle
it,” said King, who started King’s
Building and Development 11
years ago to build homes in Wake
County. “If you could find me a
good deal today, we’d probably
do that, too.”
Last week, most of his crew
was racing to finish Caraleigh
Mills by the end of October. The
two-year historical renovation
has cost about $16 million. Buy-
ers have contracts for 44 of the
84 units, with prices ranging
from $150,000 to $400,000.
Demand at the mill has been
strong enough that in August
Davie St. moving.” -111,400 -83,600
King said his architect, Steve
333 Shuster of Clearscapes in Raleigh,
Corporate Civic and
Convention will submit final site plans for
Cabarrus Plaza Center
St. the building today, and that he
could get building permits two
The News & Observer
weeks later. King said his crew
could be building condominiums
King and his brother, Tim, in the 63-year-old department
East North
bought 10 acres next to the mill store in December. Wake County Durham
for a 65-unit condo building that King said he has about 20 * Absorption is the increase or decrease
will serve as a second phase of the reservations for condominiums in in space rented in a market.
Caraleigh Mills. If the rezoning the building, but won’t start send-
application is approved by the ing out sales contracts until he
City Council this week, King said has building permits. The leasing RETAIL RENTS
construction could start in a year. team of Steve Robinson with An-
Other areas of real estate have
Work on the Belk building thony Allenton Commercial Real been suffering, but retail rents
should be at a critical stage in a Estate and Ron Mikesh with Ster- in Cary and Northwest Wake
year. When the city council gave ling Properties are close to sign- County have been rising.
King initial approvals to start ing a large retail tenant for the Asking rents by year
renovating the Belk in June, it first floor of the building.
moved a deadline for the com- King said demolition of the in- 2001 2002 2003
pletion of most construction on terior of the department store to
$18.06
the building to the end of 2004. prepare for condo construction is
The city had imposed an April ahead of schedule. Cary $19.26
2004 deadline for finishing con- “I think people have been real
struction on the Belk’s last positive with what’s happened,” $19.94
owner, Boston-based Modern he said. “We’re doing what we $14.28
Continental, to ensure the va- said we would and exceeding
Northwest $14.13
cant building wouldn’t be a drag what we said we would do.” Wake
on downtown development.
$17.02
Mayor Charles Meeker said Staff writer Steve Cannon
the Belk building will be part of can be reached at 829-8917 Source: Karnes Research
a major redevelopment of down- or scannon@newsobserver.com. The News & Observer

8B, MONDAY, SEPTEMBER 29, 2003 C M Y K

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