Resurging downtown reshaping Durham’s skyline
A New York apartment builder is proposing to add hundreds more apartments to downtown Durham — an area that has seen thousands of new apartments added in recent years.
Park Grove Realty, a Rochester, N.Y.-based company, submitted plans earlier this year to the Durham City-County Planning Department for 240 apartments at 510 E. Pettigrew St., land that was once part of the Hendrick Automotive car dealership.
Park Grove bought the land through a subsidiary in February for $4.1 million, according to county records. The roughly 2-acre parcel of land is near several other apartment projects and is within walking distance of the downtown core and the Durham Bulls Athletic Park.
The plans show that the building would be six stories tall and would come with a 114,000-square-foot parking garage with room for 480 parking spaces.
Efforts to reach Park Grove by phone were not successful.
The area around Pettigrew Street is about to undergo a major transformation in the next year if currently proposed projects get off the ground.
Just down the street from the Park Grove-owned project, a group of investors is planning to expand the historic Venable center with a new mixed-use tower. The eight-story building planned there, called The Roxboro, will include 200,000 square feet of office, retail space and 200 apartments.
Last summer, Bryan Kane, managing partner of Raleigh-based SLI Capital, one of the investors for The Roxboro, said his firm was interested in Pettigrew Street because of how much demand there was for office space in downtown Durham. The downtown area has had some of the lowest vacancy rates in the entire Triangle for the past few years.
“In my opinion, the downtown Durham market continues to show demand, which is what made it an appealing investment for us,” Kane told The News & Observer last year.
But along with the new office space, hundreds of apartments have been added to the blocks around Pettigrew Street in recent years — and even more will be coming under construction soon. Already, the Bullhouse Apartments, adjacent to the Park Grove property, are open and the Van Alen apartments are nearing completion.
Additionally, Charlotte-based Lennar Multifamily Communities (LMC) — the apartment building arm of the Miami-based home builder Lennar Corp. — is expected to start construction this year on a 356-unit building at 425 S. Roxboro St.
When asked earlier this year whether too many apartments were being built in downtown, Jeff Harris, divisional president for the Carolinas at LMC, told The N&O that he thought there would be enough demand to support the new units in the coming years.
“We feel very good about Durham and the broader Triangle,” Harris said in January. “The job growth in the Triangle is quite robust, and if this office building goes forward on the Venable site and some other things that are programmed, we think downtown Durham is going to be the most exciting place to live in the Triangle.”
Last year, rents across the Triangle grew faster than the rest of the nation, The N&O previously reported. That surge came after two years of rents growing slower than the national average, according to apartment data company RealPage.
In 2018, rents for multifamily apartments in the Triangle grew by 3.8% to an average rent of $1,105 per month, according to RealPage. The national average was 3.3%.
That growth is likely to continue if the Triangle continues to see strong job growth going forward.
Carl Witaker, manager of market analytics at RealPage, told The N&O earlier this year that the slowdowns in rent growth prior to 2018 both came when job growth eased up slightly but apartment units were still being aggressively added across the region. (For example, the number of jobs in the Triangle grew by 2.5% in 2018 compared to 2.1% in 2017, Witaker said.)
“Somebody has to fill those units being built, and when job growth is accelerating, then you have more people to fill those units,” Witaker said.