For folks who are concerned that Raleigh missed its opportunity for office towers downtown, I’d suggest that there is a “glass half full” narrative to consider.
As companies look at their future RE/workplace strategies, I expect a significant number of them to land on a hybrid model and reduce their real estate. At the same time, I’d expect them to look at up-leveling and/or changing their experience model vis-a-vis the next generation of workforce. Both of these things bode well for downtowns vs. suburban campuses. With smaller footprints, more companies will be able to justify heftier per/s.f. investments in pricier markets that just happen to be where their future workforce wants to be. With more and more companies allowing their employees to be at least hybrid (if not virtual), enticing them with more meaningful urban experiences in their workplace context is going to position companies for better recruitment & retention.
Glaxo is already doing this by downsizing and basically abandoning RTP for DT Durham. They won’t be the last company to make that decision. I am already working on a project where my company is doing something similar in another market.
The best thing that Raleigh can do is continue to make its urban fabric richer with more and more experiences and residents. This will provide the platform that will entice both local suburban companies and corporate relocations to consider DT for their next generation workplace.
I tend to agree with @John here, DTR probably lucked out in not getting a mess of big ol’ buildings that would now be standing empty. Rather than being locked into large office towers, I suspect we will get more multi-use and residential buildings. I think long-term, Raleigh is well position to still see substantial if not spectacular growth downtown and in our emerging urban-nodes. I am sure Austin felt left out after the oil booms of the late 20th Century, but dang if it has not hit its stride and simple exploded.
I do think the opportunity for a residential tower boom is there and Raleigh has a chance of going the Austin route. However, it bears mentioning that the two tallest purely residential buildings in the Triangle are still in Durham and North Hills. I really want it to happen but I’ll believe it when I see it. And until then I think Raleigh should be thinking more aggressively about how to encourage something other than 20 floor cubes in its core.
I tend to agree with you. The demand for office space is going to go down from its peak, that’s pretty much undeniable. But it’s gonna go down a lot quicker in boring office parks where people have to drive-in, drive-out, don’t have options for lunch or happy hour or “networking” type of experiences, and the like. In other words I’m hold-to-bullish on CBD office space nationwide and rock-bottom bearish on office space in the Brier Creeks and Perimeter Parks of the world.
Let’s hope you’re not talking about One City Center in Durham. It has 130,000 square feet of office space…
One City Center is mixed used, but its sibling is starting construction soon. Same developer, very similar design, but one story taller, purely residential, and over $900/sf.
If DTR blows up for the live - here - work remote BOOM, then so be it.
Smaller decks, more % to TTL residential and load 'em up in the central core.
If things flip in a year or two or three then so be it - there’s a workforce so built your dang tower!
GSK (not been known as Glaxo for 20 years…) is not just moving, but also reducing footprint by 90% in NC. The point is to keep people home who do not need to be in a F2F meeting and cut costs. Same in Philly and they are also going to move to a much smaller space in the UK as well. The new office spaces are not meant for “head’s down work.”
Their official name is GlaxoSmithKline, GSK is the stock symbol. But like sears tower people that know the original name just keep calling it by what we learned.
Yes. This is the model that many companies will follow, and it’s the reason why I mentioned them.
I’d be surprised if downtown Durham helps with recruitment and retention at GSK - that would be very surprising to me, especially since it is assumed that the majority of people will be working remotely most of the time, and the attraction to working there should be the belief in the future of the company/pipeline, etc. Admittedly, recruitment is one of the factors that GSK mentions to justify the move and of course those who live in Durham are happy about it. I guess unless someone does a survey of incoming hires we won’t know…
DT Raleigh is well positioned to attract these sorts of hybrid work centers for suburban companies throughout the region, or attract a future HQ of a company that’s gone fully hybrid/virtual.
Thought this might be the appropriate thread to dust off for this post. Saw they released the 2021 State of Downtown Raleigh report. Very, very good numbers pop off the page when you’re reading it. I know we get bummed at the speed of development sometimes (Nexus looking at you) but I think we are in hella good shape moving forward.
The west side is really flexing! 