Kane Realty Corp. could transform another part of downtown Raleigh, as the company has 6 acres under contract near Union Station.
The under-contract property is two blocks south of Kane Realty’s The Dillon project, a 17-story office and residential tower in the Warehouse District. The property, on Cabarrus Street, is currently owned by the construction company Clancy & Theys, and is made up primarily of surface parking lots and 1- and 2-story buildings.
For Kane, it’s an opportunity to buy a large tract of land in a part of Raleigh where that is becoming increasingly harder to find, said John Kane, CEO of Kane Realty.
“What’s not to like? It’s great,” Kane said of the property. “It’s downtown, and is a big tract of land right next to where the train station is getting to be completed.”
The proximity and success of The Dillon, Kane added, was also a motivation for securing the property. Kane wouldn't disclose the price of the property, though that will become public once the deal officially closes. Wake County records show that the property has an assessed tax value of more than $7 million.
“The lease up (at the Dillon) is going very well,” Kane said. “The market is there for more of that. We are very bullish on the area.”
Kane said he envisions the property becoming a dense mixed-use property, which means Kane will need to apply for a rezoning. The company will likely apply for that rezoning later this year, he said.
“It will be very different than The Dillon,” Kane said. “More than likely it will be office and residential, with maybe some restaurants and street-level retail.”
The Clancy & Theys headquarters has been on Cabarrus Street since the 1970s. Selling the headquarters now was a chance for the construction company to take advantage of the hot real estate market in downtown.
“Well, it seemed to be a good time (to sell),” Clancy & Theys President Tim Clancy said of the decision. “The market is good, and you never know when it will take a dip.”
The sale also comes as Clancy & Theys begins to transition the ownership of the construction company from Tim and his brother Tick to the next generation of owners, which is made up of three family members and three non-family members.
Clancy & Theys has worked extensively with Kane on projects such as The Dillon and Park Central in North Hills. That past relationship made selling the property easier, Clancy said.
Clancy noted that as downtown gets more dense, it makes more sense for companies like his to move out of downtown.
“There is a lot of surface parking and storage for equipment (on our property), and obviously as downtown gets more dense that is probably not the best use,” Clancy said.
Because of the need for rezoning and the nature of the agreement between Kane and Clancy & Theys, it will likely be a while before the company actually moves away from Cabarrus Street. Clancy said it will be closer to four years before the company moves.
The construction company isn’t the only one using space on the Clancy & Theys property. Amtrak leases space there — though it will be moving to the new train station soon — and the nonprofit Haven House also occupies a buiding there.
Michelle Zechmann, CEO of Haven House, said the nonprofit, which provides diversion services to youth in danger of falling into criminal activity, was aware of the potential change in ownership. She added that Haven House was already actively looking for a new home before it was told of the potential sale.
“We knew that they were going to develop that property, and we already have a facility committee and long-term plan to make a move,” she said. “This is not a surprise to us.”
Zechmann said it would likely be a few years before it moves.
“Cost of property downtown is getting more expensive, so we figure we will have to move further out of downtown,” she said. “But we want to be near transportation, so we can be accessible for our families.”