Dominion Realty Partners has closed on land at the southeast corner of Tryon Road and Cary Parkway and expects to begin construction on a 205-unit apartment complex next month.
The Raleigh developer paid $2.4 million last week for a 12.5-acre tract of undeveloped land, according to Wake County property records. The first completed units in the development, to be called Tryon Place at Cary Parkway, are scheduled for delivery in June 2013.
Dominion originally hoped to put as many as 288 units on the site, but after discussions with both the surrounding neighborhoods and the town of Cary that number was reduced to 205. Cary approved the project’s site plan in January, about a year after town officials amended the comprehensive plan to allow for apartments on the site.
Tryon Place will include four buildings with about 60 percent of the land reserved for open space, said Andy Andrews, Dominion’s CEO.
Dominion is well known in the Triangle, having built numerous condominiums, apartments and office buildings. Among the company’s residential projects are the Columns at Wakefield, the condominiums at the top of the PNC Plaza building in downtown Raleigh and the Cottages at Stonehenge in North Raleigh.
Andrews said Dominion has completed about 900 hotel and apartment units over the past two years, including an $82 million renovation of the John Marshall Hotel in Richmond.
“We’ve been fortunately very busy during this down time,” he said.
As for the Triangle apartment market, which has seen a rash of new projects proposed over the past year, Andrews said there remains pent up demand because of the moratorium on new apartment construction caused by the financial crisis. He also noted that few of the new projects coming out of the ground are near Tryon Place in southeast Cary.
“There are a lot of projects on the books but that includes the entire Triangle,” he said. “I think if you look in the immediate area there are very few projects being built.”
Developer Northwood Ravin has two projects moving forward in Cary: Bradford, a 370-unit complex at the intersection of High House Road and Davis Drive; and Lofts at Weston Lakeside, a 202-unit project adjacent to Lake Crabtree. Another 17 projects are in various stages of the planning process in Cary, Apex and Morrisville, according MPF Research, which analyzes apartment data in 100 U.S. metro markets.
Just how many of those projects will get financed and approved remains an open question.
“A lot of people talk about building things but there are very few under construction,” notes Andrews.
Cary has been one of the best performing apartment markets in the Triangle over the past decade, and the lull in new construction is already being reflected in both occupancy and rental rates.
The area’s occupancy rate has averaged about 93 percent – lower than some other areas of the Triangle – over the past decade but that’s largely because there are typically new projects in the lease-up phase, said Jay Parsons, a market analyst with MPF.
With the slowdown in construction, occupancy rates have shot back up to around peak levels we saw before the recession, he said.
The occupancy rate in the South Cary/Apex market was 95.9 percent in the first quarter, up 2.9 percent from the same period a year ago and a full percentage point above the occupancy rate for the entire Triangle, according to MPF. Meanwhile, rents have increased 3.7 percent over the past year.