The downtown site where Kane Realty plans to build a 17-story tower has been sold for $13.875 million, according to property records.
The buyer was Federal Capital Partners, which is Kane Realty’s financing partner in the deal.
In September, Kane Realty successfully rezoned the 2.5-acre site between S. West Street and S. Harrington Street. The property is now home to a Dillon Supply warehouse.
Raleigh-based Kane Realty plans a $150 million project called The Dillon that will include a 17-story office tower directly across W. Martin Street from CAM Raleigh; a 1,000-space parking deck; and two, six-story apartment buildings on the north and south sides of W. Hargett Street.
The entire project will have 225,000 square feet of office space, 300 apartments and 35,000 square feet of ground-floor retail.
The Dillon is expected to transform the warehouse district on the west side of downtown, where Citrix Systems has its headquarters in an old Dillon Supply warehouse.
John Kane, CEO of Kane Realty, said demolition of the site will begin next month with construction expected to begin in the second quarter.
He said plans call for the preservation of the brick where the Dillon Supply sign now is, as well as reusing the existing railroad tracks and much of the materials inside the warehouse.
“We’re preserving a lot of the things, just like Citrix did with that building,” Kane said.
Kane Realty hopes to finish the project by the end of 2017 – the same year local authorities plan to open the Union Station transit hub just one block away.
FCP and Kane Realty’s purchase is the latest pricey land deal in downtown to be announced or completed in recent months.
“It’s amazing the demand for downtown tracts; there’s a lot of interest in it,” Kane said.
Raleigh-based developer The Lundy Group has agreed to pay $6.3 million for a 1.2-acre, city-owned site at 301 Hillsborough Street. Another local development group has an agreement to buy The News & Observer’s 3-acre site for $20.2 million.
And just last week a Maryland developer, Heritage Properties, paid just over $4 million for a .8-acre site at the intersection of Glenwood Avenue and Hillsborough Street.