another point from the article: Regarding the eastern site where Loden had proposed a residential tower, a mixed-use building is proposed to be built instead. In city documents, Loden stated āa residential tower cannot be financed on this site in this current market,ā leading it to ask for a 120-day evaluation period to revise site plans and submit a new development proposal.
Genuinely baffling to me how Raleigh continues increasing size, now nearing 500,000 people, keeps getting all the āfastest growingā and ābest place to liveā accoladesā¦ MLB expansion talkā¦ etc etc etcā¦ but we canāt build a f**king building over 20 stories? Ever? lmao
Austin just built their 2nd (?) supertall. Atlanta, which weāre nearing in āsizeā (population-wise) has 3 separate GIGANTIC skylines. I understand these were all developed over decades butā¦ can we at least GET STARTED???
It is indeed frustrating, but I think after market conditions improve (whenever that may be), the lid is going to blow off. We have tons of 40-story rezonings already approved now!
To build high-rise in todayās market, rents need to be around $3.50/SF. Fortunately, Maeve is already in the high $2s and low $3s, and if the lease-up performs well, lenders and investors will likely gain confidence in supporting this expensive building type.
Itās important to remember that these buildings function as financial instruments. Right now, alternative investments offer strong returns with lower risk, meaning high-rises must deliver even higher returns to stay competitive. Historically, apartments would trade at a 4.5% cap rate, but with the 10-year treasury also at 4.5% and senior debt rates in the low 5s, weāre in a negative leverage scenario. This limits the pool of potential buyers and lowers the āas-completeā valuation of projects.
Until Raleighās rental market demonstrates that spending $400/SF on a building makes financial sense, weāll continue seeing lower-cost five-story apartments.
Itās like trying to sell A5 Wagyu which cost $40 at a restaurant when customers are only willing to pay $30 - you canāt justify the expense if the market wonāt support it.
Its the same reason we dont have any nice hotels in Raleigh, Gucci and Hermes stores, etcc like all those other markets do. We are a āvalueā market where companies and residents choose not to flash. You take the good and the bad with thatā¦part of the bad being people not wanting to pay $4.00 rents needed to build 40 story buildings.
This is a good point.
Interestingly North Hills has become the flashy, fashion/wealth-forward district and will likely continue to build high-rise residential faster than DTR. However, DTR will continue to have more character and be more reflective of the general population, which personally I am attracted to.
Loden walked away from the East site (tower), the City will set that property back out for ideas.
Agreed to up front cash plus long-lease to cover the difference in the āhighest / best useā difference of appraisal $ for the South (hotel) portion, wonāt move the older house but still working to find some agreement to renovate the old Esso station, etcā¦
Affordable housing on pace, hopefully moving ahead next year.
What does this mean for the grocery store?
