The future of John Kane’s North Hills is becoming clearer — and taller.
In its most recent midyear update, Kane Realty outlined how North Hills — its expanding real estate project in the Midtown part of Raleigh — will grow for the foreseeable future.
Coming next: a new office building and a hotel-and-apartment project that will become the tallest building in Midtown Raleigh.
Construction is expected to begin on the 33-story Walter Tower later this year, while Tower 4, a 20-story office tower, is already coming out of the ground. Tower 4 will add 325,000 square feet of office space to North Hills, Kane said in an interview.
The new office space is much needed, he said, as three of the four office buildings already built at North Hills are 100 percent leased. The other one is 99 percent leased, according to the Kane Realty report.
Demand for new office space in both downtown Raleigh and Durham, as well as North Hills, is very healthy, Kane said.
“I think the market is absorbing what we are building right now,” Kane said of the Triangle’s low office vacancy rates. “The capital out there is pretty conservative, so I don’t think the market is going to get over baked.”
Kane Realty’s equity partner in the Tower 4 project is Lionstone Investments, Kane said. While no tenants have been named, the company has been in talks with several interested parties, he added.
The next project to come out of the ground will be the hotel-and-residential project called the Walter Tower, which Kane said will begin construction in the fall.
That building, at 33 stories, will be the tallest one in the Midtown section of Raleigh. The Autograph Collection, a luxury hotel line from Marriott, plans to put 193 hotel rooms (10 floors in total) in the Walter. The rest of the building will be dedicated to luxury apartments, the Kane Realty report says.
Kane said that Tower 4 and the Walter Tower will be connected through a parking deck. Both of those buildings will be at the corner of Six Forks Road and Front at North Hills Street.
Kane Realty’s midyear update also shows how the developer plans to expand the North Hills footprint onto 34 wooded acres along St. Albans Drive.
Kane had previously acquired the land, immediately east of Church at North Hills Street, and the City Council approved a zoning request to allow denser development there last year.
Construction on that new land has already started with the Vine Apartments project, which will add 325 more apartments to North Hills. Kane described that apartment project as a “friends-and-family” equity project.
The report shows that the new section of North Hills could eventually add two more office buildings (Tower 5 and Tower 6) and three more residential buildings around a green space.
The report says that the company is ready to start pre-leasing Tower 5. That building is described in the report as a 12-story building with 300,000 square feet of space, but Kane said that could change in the future.
He added that there is no immediate timetable on when his company would build Tower 5 and Tower 6.
“If a big tenant came along and wanted 100,000 to 200,000 square feet, we would do it,” he said. “We are not going to build anything on spec and have too many buildings at one time.”