N.C. State University’s Centennial Campus is home to miles of open space, a dazzling new library, an 18-hole golf course and 1.2 million square feet of leasable office space.
What it doesn’t have is any rental housing for nonstudents. That will soon change.
Next week, Cary-based Capital Associates will break ground on The Greens at Centennial Campus, a 292-unit complex that will encompass three apartment buildings spread over 10 acres in Southwest Raleigh. The units will be targeted at working professionals, meaning they don’t expect to lease to students.
The $30 million project, expected to open a year from now, represents something of a gamble for Capital Associates. Although apartments have been in high demand in Raleigh, it remains to be seen whether professionals will want to live on Centennial Campus in close proximity to students.
Centennial doesn’t have any student housing now, but that too will soon change. The university is constructing a 1,195-bed complex that is also expected to open in the fall of 2013.
“This is a key element of the residential community that’s planned for Centennial,” said Michael Harwood, associate vice chancellor for the Centennial Campus Development Office, of The Greens project.
When the land for Centennial was rezoned in the 1980s, N.C. State officials promised that one-third of all the square footage built would be devoted to residential. At the moment, the only residential units on campus are 33 for-sale townhouses.
Capital Associates believes The Greens will offer tenants something they won’t find at the new apartment complexes being built in Glenwood South, Cameron Village and elsewhere around the city.
“We’re going to offer a very different environment,” said Tom Huff, an associate partner with Capital Associates. “We’re surrounded by golf courses and lakes and bike trails.”
Huff also notes that The Greens will be minutes from Cameron Village and downtown, and will offer more affordable rents than apartments in those areas.
“We’re going to be less expensive in a different kind of green environment,” he said.
N.C. State hopes to add more amenities over time to the 1,125-acre campus. The university has partnered with a developer to build a conference center and hotel, but that project has yet to secure financing. The school also has rough plans for a Town Center project that would add 400,000 to 500,000 square feet of retail and residential space on the northeast shore of Lake Raleigh.
Huff expects The Greens to be attractive to both N.C. State employees and faculty as well as the private sector employees who work on campus.
Although Red Hat will have departed Centennial by the time The Greens opens, most of the campus’ office space is leased and other companies are adding employees.
The telecom company Bandwidth is now moving from Cary to the 75,000-square-foot Venture III building that it subleased from Red Hat. The company, which already employs 260 people locally, expects to add 100 more over the next 12 months.
ABB, the Swiss energy conglomerate, employs 350 on Centennial, and the campus is also home to Skema, the French business school.
Such a pool of potential tenants could ultimately help The Greens should the apartment market begin to cool just as hundreds of new units come on the market in central Raleigh. There are signs that is beginning to happen.
The occupancy rate in the Triangle fell in the third quarter to 95 percent, down from 95.4 percent during the same period a year ago, according to MPF Research, which analyzes apartment data in 100 U.S. metro markets. Year-over-year rent growth in the region also slowed, from 5.4 percent in the second quarter to 3.9 percent in the third quarter.
Those numbers still signal a very healthy market. But they also serve as a reminder that the market is cyclical and that there’s a limit to how much you can push rents when wages aren’t keeping pace.