Kane Realty waiting to start construction on Downtown South until financing materializes
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A rendering of the first phase of the Downtown South development, courtesy of Kane Realty
Kane Realty says it's ready to begin construction on the first phase of its large-scale Downtown South development but can't start until the project's financing comes together.
Why it matters: Downtown South, located around 1721 S. Saunders St., stands to be one of the most influential real estate projects in the city, adding multiple high-rises and a new entertainment district to the Southern gateway into downtown Raleigh.
- The project — and the growth of Dix Park — has also spurred debates around gentrification in the surrounding neighborhoods, which have historically been more diverse and have lower incomes than the city as a whole.
Driving the news: Kane Realty, perhaps the city's most prolific developer from North Hills to downtown, is not immune to the trends in the larger economy. Rising interest rates and growing vacancy rates in office buildings are making new loans harder to get, Bonner Gaylord, chief operating officer for Kane, told Axios.
- Gaylord said Kane is still confident in the future of Downtown South, given its location near downtown, Dix Park and Interstate 40, but has to wait for economic conditions to improve.
- He said work will continue on Downtown South but didn't provide any timeline for when construction would start.
Details: Gaylord said that Kane has already gotten the necessary permits to build a 7-story apartment building at Downtown South and will get them for a 3,500-person music venue early next year.
- Other buildings in the first phase include a 21-story apartment building and a 27-story office tower.
- In total, the first phase would add 1,000 apartments and more than 500,000 square feet of offices — if the financing can be secured to build it.
- Already, Kane has leased around 31,000 square feet of office space in two of the project's existing warehouse buildings, and has another 14,000 square feet available for retail.
Flashback: Downtown South was initially spearheaded in 2019 by John Kane and N.C. Courage owner Steve Malik, who then envisioned the area as home to a soccer stadium.
- The possibility of a sports venue in the development is uncertain — especially after the Triangle missed out on landing a Major League Soccer team.
The big picture: Tightening standards for new construction is impacting the timeline of many large-scale real estate projects throughout the Triangle — especially projects with a large amount of offices or residential high rises.