Now that Red Hat has made public what had become the worst-kept secret in Triangle real estate circles, it's worth delving into what the company's move to downtown Raleigh will mean for interested parties.
In the near term, the decision eliminates uncertainty about whether downtown would be left with an empty building once Progress Energy and Duke Energy complete their merger and consolidate operations.
The threat of 366,000 square feet coming on the market had already caused at least one property sale in downtown to fall through.
The Simpson Organization, the Atlanta investment group that owns the 17-story Bank of America Plaza building, was close to selling it when the Progress-Duke deal was announced in January.
Simpson has since refinanced the property with a $41 million loan that doesn't mature until September 2018, according to Wake County property records.
Red Hat's decision not to construct a tower downtown means that several stalled development projects will need to look elsewhere for an anchor tenant.
That includes developer Gregg Sandreuter's Edison project and Charter Square, the two-tower project planned for the south end of Fayetteville Street.
The city sold the Charter Square development group its 1.75-acre site in November 2008, and the group has five years from the sale date to build two towers valued at $100 million.
If the group doesn't complete the project within five years, the city must buy back the property. Thanks to a state law passed in 2009, the city can extend the deadline two years until 2015 if necessary.
Although there remains a dearth of large tenants trying to move these days, downtown boosters are hoping that the addition of Red Hat will ultimately improve the chances of luring other companies.
Of course, it isn't just downtown office projects that are stalled. A number of planned hotels have been delayed or canceled, which has hampered the size of the events that the downtown convention center can go after.
And residential projects, such as Blount Street Commons just west of downtown, have also slowed.
Red Hat could help breathe life into one or more of these projects, and its employees will certainly be a welcome addition for downtown restaurants and retail businesses.
"Their employees are very different than Progress employees and I think that will be good for the downtown," said Russell Allen, Raleigh's city manager. "I think that will drive some demand for things in the downtown, whether it's residential or perhaps even more transient things like hotels."
The Greater Raleigh Chamber of Commerce is already planning a marketing effort around Red Hat that will seek to create a cluster of companies affiliated with the open-source software movement.
New Kind, a Raleigh branding agency made up of former Red Hat employees, has been hired to help craft the message.
If nothing else, downtown will have a story to tell companies when they stop hoarding cash and start spending it.
Staff writer David Ranii contributed to this report.
