Real Deals

Real Deals: L Building puts Empire in middle of downtown Raleigh’s resurgence

dbracken@newsobserver.comMay 8, 2013 

Greg Hatem

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For more than a decade, developer Greg Hatem has made a name for himself by renovating old buildings in downtown Raleigh and filling them with restaurants, retail shops and offices.

While those renovations have involved several additions, Hatem and his company, Empire Properties, have yet to construct a building from the ground up.

That is expected to change by the end of the year, when Empire is scheduled to begin construction on the $16 million L Building that will wrap around two sides of the Wake County parking deck at Davie and McDowell streets.

For downtown, the L Building is an important project in that it will liven up a dead street corner and help connect the redevelopment activities occurring in the Warehouse District and activity around Fayetteville Street.

“It’s one more project where we’re connecting the dots,” Hatem said Wednesday. “We’ve always grown in nodes, and now we’re starting to connect the dots between the nodes.”

Empire has a sizable footprint in both those areas of downtown, and the company added to its Warehouse District portfolio last month by acquiring the buildings at 321 W. Davie St. and 418 S. Dawson St.

Empire already owned much of the surrounding real estate on the block, including the Dr. Pepper warehouse, and Hatem said the plan is to rehab the properties to create interconnected space for retail and office tenants.

Leasing those spaces is likely to get easier once Citrix Systems opens its downtown headquarters in the old Dillon Supply warehouse, which will flood the area with office workers looking to spend.

The L Building has been in the works since 2007, but Empire has been unable to secure financing to get it built until now. Hatem said he’s noticed a notable difference in the willingness of banks to finance projects.

“There’s a big difference between now than just six months ago,” he said.

Originally conceived as primarily an office building, the L Building now includes 83 apartments as well as 8,000 square feet of ground floor retail space.

Empire also carved out five planned apartments to create space for Balfour Beatty Construction, which will locate its Raleigh offices there after it participates in the project’s construction.

The L Building’s apartments will be smaller than much of the existing inventory downtown. Hatem said the units are intended to appeal to young, single tenants.

“People don’t need bigger apartments; they’re barely there,” he said. “Most people are single, most people go out to eat, so it’s really about having a place to hang your hat and location.”

Empire expects the units will be particularly attractive to Red Hat and Citrix employees, as well as students attending Campbell University’s Law School. Construction of the building is only expected to take about 12 months, as the parking is in place and the foundation is already in the ground.

Demand for the apartments is likely to be high, given that Hue and other apartment complexes in the heart of downtown have few vacancies.

“It’s reasonably scaled, it’s easy to finance and there’s a huge need for it,” Hatem said of the project.

Hatem got his start in downtown’s Warehouse District – Empire’s first renovation project was the 117 S. West St. building that was once home to Jillian’s. He’s since found great success on downtown’s east side, particularly along Hargett Street.

Although no developer wants to endure a six-year delay to get their first building out of the ground, Hatem and Empire’s timing might end up being quite good.

“The Warehouse District is kind of coming back to life again,” Hatem said. “Momentum is shifting back over there after 20 years.”

Bracken: 919-829-4548

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