Crescent Resources has assembled more than 3 acres at South Tryon and East Stonewall streets uptown a block once eyed by Donald Trump and plans to build a project anchored by an office building that could also include apartments and retail.
The Charlotte developer announced Tuesday it has picked the Little architecture firm to begin design and master planning for the site, across Tryon Street from the Observer. A Goodyear Auto Service Center currently occupies part of the site, which is bordered by Tryon, Stonewall, College and East Hill streets.
We have an opportunity with our South Tryon Street property to launch what we believe will be a transformative development for the Center City, Crescents chief executive, Todd Mansfield, said in a statement.
The developer declined to provide specifics for the project, such as the height or square footage, or say when construction would start. No tenants have been signed, the company says.
Before the real estate crash, development mogul Donald Trump had eyed the land for offices, condos, retail and a hotel. The Trump Organization put up cash to secure a contract on 2.5 acres and buy it from Crescent.
Trump last year told the Observer he came to view the project as risky given the uptown economys heavy reliance on the banking industry. If I had built that thing, he said, it would have been a disaster.
Crescent has owned most of the site, comprised of three parcels, for more than 15 years. It bought the final parcel along Stonewall Street in December.
In making its announcement Tuesday, Crescent said the site offered everything that tenants are looking for in office space, citing its proximity to neighborhoods, restaurants, entertainment and Interstate 277.
We have asked Little to consider every possibility with a vision of creating an office community that is authentic to Charlottes progressive heritage yet embraces how people live, work and play today and for the future, Mansfield said.
Crescent said it and Little have begun a strategic collaboration with the citys business, governmental and civic leadership to identify the most advantageous use for the property. A city spokeswoman didnt immediately respond to an email seeking comment.
A site of this magnitude and strategic location is truly a unique opportunity to provocatively shape the future of Charlottes Center City in a fundamental way, said Eddie Portis with Little.
Known for building luxury master-planned communities, Crescent filed for bankruptcy protection in 2009, unable to pay its debt as the residential real estate market tanked. Since emerging from bankruptcy protection a year later, the company has made significant forays into the apartment market and has become more active in building single family homes.
In the Charlotte area, Crescent started construction in July on a new phase of home sites at the Springfield community in Fort Mill. Crescent also started work this summer on an upscale amenity center at Chapel Cove, a community off Shopton Road West on Lake Wylie.
The multifamily division, meanwhile, is building a new apartment community in Tampa, Fla., and continuing work on Circle South Park in Charlotte. In July, Crescent sold another property, Circle at South End, to Post Properties for $74 million, a state record for that apartment type.
Improving office market
Charlottes uptown office market has been on the rebound, with vacancy rates falling and office property sales rising, suggesting investors are bullish on the uptown local job market.
Uptowns office vacancy rate dipped 3.5 percentage points to 10.7 percent at the end of last year, prompting commercial real estate firm Cassidy Turley to say in its fourth quarter report that the uptown market turned out to be this years success story.
Cassidy Turley principal David Dorsch said last weeks sale of the mixed-use Metropolitan near uptown for $94 million suggests its a good time for a project such as Crescents, that could combine retail and residences with offices.
The success of the Metropolitan probably bodes well for a more mixed-use project, he said.
Crescent has been meeting with brokers in recent months to discuss a possible office tower, asking brokers who they thought would lease space.
Who would fill it? I think its very reasonable to say its unclear, Dorsch said.
While the uptown office vacancy rate remains higher than the historic low of 3.1 percent in 2007, the rates improvement has some uptown boosters saying it is time for new development. Brokers like to see vacancy rates around 10 percent.
No office towers are currently under construction in uptown. Such projects can take two years or more to plan and build.
Charlotte Center City Partners CEO Michael Smith said uptowns vacancy rate can serve as a strong indicator of the need for new development to support organic business growth and corporate office relocations. In addition to advocating for more office development, Smith has told the Observer that uptown needs more hotel rooms.
CBRE executive vice president Ryan Clutter, who sells commercial properties, noted that uptowns newer office buildings were able to attract large tenants from other areas of the country despite the weak economy. Chiquita Brands International, for example, relocated to NASCAR Plaza and Ally Bank leased significant space at 440 S. Church St., which was built in 2009 on a speculative basis.
I believe a new office tower priced at competitive lease rates would be very attractive to corporations considering a relocation to Charlotte, Clutter said.
While office development has been stagnant, developers have flocked to build apartment complexes in uptown recently, a move some see as a vote of confidence in the local job markets potential for growth.
Construction is under way on Childress Klein Properties 352-unit, 21-story apartment tower at South Mint Street and Martin Luther King Boulevard. And Faison is building an apartment project near Gateway Center and Johnson & Wales University.