Feb 17, 2023 - News

Office and apartment tower coming to North Hills

Rendering of the One North Hills building, courtesy of Kane Realty

North Hills' main shopping district, home to a Target and movie theater, is getting ready for a much denser future.

Driving the news: On top of what was once a JCPenney department store, Kane Realty is building office-and-apartment towers — completing a striking transformation of what was once the site of an indoor mall.

  • Kane has long had office towers on the opposite side of Six Forks Road. But its original shopping district has never featured them.

Why it matters: Kane Realty is one of the most consequential developers in Raleigh. The moves they make have a huge impact on the city, from North Hills to downtown.

  • Kane has around $900 million worth of projects in construction across the city, the company's CEO, John Kane, told WRAL.
The view of downtown Raleigh's skyline from the top floor of One North Hills. Photo: Zachery Eanes

Details: Kane is scheduled to complete three new projects on the former JCPenney property:

  • One North Hills, a 10-story office tower with 266,000 square feet of office space. (Limani Grille, a Mediterranean restaurant out of New York, has signed a lease for a space there featuring a large terrace. One floor has already been leased by an unnamed tenant as well.)
  • A five-story office building;
  • And a 12-story apartment building called Highland that will have 287 units. Ruth's Chris Steakhouse and Village Tavern will open on the first floor.

Plus: Adjacent to Highland, Restoration Hardware, the upscale furniture retailer, is opening a gallery and rooftop restaurant.

State of play: The office market in the Triangle is in flux. Vacancy rates jumped up to 14% in the last quarter of 2022, according to JLL research.

  • But Kane believes there will be a strong desire to move into offices in amenity-rich locations, whether that is downtown or at North Hills.

Offices nationwide were around 50% occupied by workers over the past four weeks, according to a 10-city sample by Kastle Systems.

  • Comparatively, offices in North Hills were around 80% worker occupied, Stacey Buescher, managing director of operations at Kane Realty, told Axios.

What they're saying: "[Companies] want to be in an amenity rich location that make employees want to come back," Buescher told Axios. "So if you're looking somewhere that doesn't have a Target underneath it and doesn't check all those lifestyle boxes, it's not going to be as attractive as what we're building here."

  • She added that its new apartments have proven extremely popular with newcomers to the region.
  • "It's not just people moving from Georgia. I'm talking like London, New York and California … cities where you're used to being able to walk outside your apartment and go do all these things."

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