Downtown Raleigh Office Tower Lands $80M Refi

Heritage Properties has received an $80 million loan to refinance One Glenwood, its recently completed office tower in downtown Raleigh, N.C. The company secured the refinancing with M&T Bank and Pinnacle Financial Partners little after the same lenders provided the developer a $73 million construction loan for Tower Two at Bloc[83]. The two structures will communicate through what is considered Raleigh’s largest urban courtyard. Moreover, the mixed-use Bloc[83] project is also set to include retail and dining options, a 126-key boutique hotel and entertainment platforms.

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Located at Hillsborough Street and Glenwood Avenue, along downtown’s premier retail corridor, One Glenwood is currently 98 percent occupied, according to Heritage Properties Vice President & Partner Ryan Blair. Tower Two at Bloc[83] is a $108 million, 10-story mixed-use development that includes 271,500 square feet of Class A office space, 30,000 square feet of retail and and a 665-space parking garage. Plans also call for a tenant lounge and terrace overlooking Hillsborough Street and the courtyard.

With the $73 million loan, general contractor Whiting-Turner Contracting Co. is able to begin vertical construction at Tower Two at Bloc[83], with completion expected in the first quarter of 2021. Gensler is the architect of the project, William Allen and Alex Dunn of Trinity Partners oversee leasing for the office space, while Charlie Coyne and Reagan Crabtree of CBRE | Raleigh handle retail leasing.

Growing office space demand

Raleigh-Durham’s office market continues to thrive, bolstered by a favorable business climate for both entrepreneurs and high-growth companies. According to a recent Yardi Matrix report, some 1.5 million square feet was under construction as of June. More than 700,000 square feet is expected to come online in 2019, which would mark a new record year for deliveries.

Several large office projects are likely to transform the metro’s core areas. Earlier this month, The Fallon Co. broke ground on the first phase of Raleigh Crossing, another mixed-use project in the heart of the Raleigh’s downtown. This project will include a 19-story commercial tower with 292,500 square feet of office and retail space. Furthermore, Kane Realty Corp. and Lionstone Investments recently landed financing for Tower IV, an approximately 326,600-square-foot office project in the Midtown district of Raleigh, N.C.