Highwoods Properties, the Triangle’s largest landlord, plans to boost its downtown Raleigh inventory by acquiring the site of a stalled high-rise office project at the southeast corner of Wilmington and Martin streets.
Highwoods, a real estate investment trust headquartered in Raleigh, has signed a contract to acquire the seven-tenths of an acre site from an affiliate of developer Gregg Sandreuter’s Beacon Partners. Sandreuter has long been planning an office building, Edison, on the site.
“We have that Edison site under contract, but really there are no immediate plans for us to build a tower,” said Highwoods spokesman Brendan Maiorana. “At some point in the future we hope we’ll be able to build a project there.”
“It’s just a good piece of land that we want to have in our inventory and use as an option where we can try to recruit anchor tenants and see if we can do a deal over time,” he added.
Maiorana declined to disclose how much Highwoods has agreed to pay for the site. The company expects the sale to be completed by the end of September.
Highwoods has developed conceptual designs for a building on the site encompassing about 300,000 square feet, Maiorana said. The company typically draws up conceptual plans for its undeveloped sites as part of its efforts to attract prospective tenants.
But CEO Ed Fritsch told analysts during an earnings conference call Wednesday morning that the company expects to pay $7.7 million for a downtown Raleigh site that could be developed into 292,000 square feet of office space. He did not name the site.
Maiorana stressed that Highwoods takes a long-range approach to developing its properties.
“The MetLife project (in Cary) that we commenced in 2013 and delivered last year, that was purchased in 1997 and held ... for 16 years before we started construction on it,” he said.
Sandreuter couldn’t be reached for comment on the deal.
Highwoods already owns two office towers on Fayetteville Street in downtown Raleigh: PNC Plaza, which is 100 percent occupied; and One City Plaza, formerly known as One Bank of America Plaza.