Another apartment project in downtown Raleigh is set to break ground next week now that the developer has brought in a partner to handle the first phase.
FMW Real Estate, which plans to redevelop a 6.67-acre industrial site just west of West Morgan and Hillsborough streets, has sold a 3.5-acre portion of the property to Faison & Associates for $9.6 million, according to Wake County property records.
Charlotte-based Faison will develop the $40 million first phase of the project, which includes a 249-unit apartment building, 32 town houses on Ashe Avenue and 10,000 square feet of restaurant, retail and office space along Morgan Street and Wakefield Street.
"They are going to end up owning the multifamily portion," said Jim Zanoni, one of FMW's owners.
He said construction on the project is expected to begin Monday. FMW will remain a development consultant on the first phase, and Zanoni expects Faison to be involved in later phases of the project, which is likely to include more apartments, retail and some office.
Faison is financing the project through one of its real estate funds. No bank financing is involved.
A similar story is playing out nearby with the $35 million apartment project at 425 Boylan Ave., which J.P. Morgan is financing with cash.
Although apartments remain about the only commercial real estate development projects that banks will touch, they still require large amounts of equity to get built.
The area around Glenwood South has been particularly attractive to apartment developers, largely because of the phenomenal success of 712 Tucker.
A third apartment project, St. Mary's Square, is being developed in the area by Ravin Partners. The $22 million project will be on 1.2 acres at St. Mary's and West Johnson streets.
St. Mary's Square will include about 140 units, while 425 Boylan will include 250 units.
FMW's project dates to the beginning of 2007, when the Charlotte firm paid about $10.5 million for four parcels. The largest piece, five acres, was sold to FMW by the Bolton family, which once operated a heating-and-air-conditioning company on the site.
FMW still owns a little over three acres, and it has under contract another three acres. Zanoni said the firm expects to close on that property next year.
The flurry of projects in such close proximity ultimately could benefit renters as the complexes compete for tenants.
Zanoni said the Faison project will have something more than the usual amenities of upscale apartment complexes.
"We have a lot of open space," he said, noting the pedestrian path that will run through the property.
