Bloc 83 buildings in Downtown Raleigh score record $330 million price tag
Bloc 83, a building development in downtown Raleigh’s Glenwood South neighborhood, has been sold for $330 million — the largest real estate transaction in downtown Raleigh’s history.
City Office REIT, a real estate investment company, bought the two office towers at 1 Glenwood Ave. and 621 Hillsborough St., from Heritage Properties, the developer of the building. JLL, a real estate services firm, brokered the sale and reported the record transaction.
In comparison, Kane Realty sold the nearby Dillon office tower in the Warehouse District for $236 million last year, The News & Observer reported.
Bloc 83, however, is a bigger development, with 495,121 square feet of office space. The Dillon has 221,300 square feet of office space.
JLL said that Bloc 83 is 79% leased, and its major tenants include First Horizon Bank, architecture firm McAdams and the finance technology company Envestnet. One of the towers is also home to the coworking company, WeWork.
John Mikels, a director on JLL’s Capital Markets Team, said in a statement that the sale was proof that new office developments will continue to thrive in a post-COVID-19 economy. Office sales, in some cases, have been sluggish as landlords figure out the needs of tenants in a world where remote work has become more acceptable.
“Across the country, we are seeing new growth submarkets thrive in a post-COVID environment,” Mikels said. “Similar to South End in Charlotte or Fulton Market in Chicago, the Warehouse District and Glenwood South have quickly become widely recognized growth submarkets, where tenant activity and investor demand are very strong. At the convergence of the two, Bloc 83 was a highly sought-after investment opportunity, and will be an attractive location for an office or retail user for years to come.”
Future plans
City Office REIT, the buyer of Bloc 83, is a Canadian investment firm that owns office towers across the U.S., including cities such as Dallas, Denver and Phoenix.
Bloc 83 is the company’s first purchase in North Carolina.
The sale did not include a parcel of land where Heritage plans to build a third tower.
Heritage has plans to add another high rise for the final phase of the Bloc 83 office and retail tower complex, The News & Observer previously reported.
Last year, the Raleigh City Council approved a rezoning request for developer Heritage Properties to build up to 18 stories of office space, structured parking and retail at 615 W. Morgan St., next door to the Origin Hotel.
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate
This story was originally published January 5, 2022 at 5:55 PM with the headline "Bloc 83 buildings in Downtown Raleigh score record $330 million price tag."
