Real Estate News

Real Deals: Plans submitted for second Charter Square tower

The developer behind Charter Square has submitted plans to the city for a second tower on the downtown Raleigh site.

Dominion Realty Partners is seeking to construct a 22-story building that would feature 250,000 square feet of offices and 194 apartments on the top floors.

The Raleigh-based developer was designing the north tower of the Charter Square site at the same time that it was working on the south tower, an 11-story office building that opened at the south end of Fayetteville Street last month.

Adding apartments to the north tower keeps the amount of office space at a manageable level, said Andy Andrews, chief executive for Dominion.

He said without the apartments “you would need about 450,000 square feet of office, which I think is a little aggressive.”

“I’m not personally interested in doing a 450,000-square-foot spec office building,” he added.

At 242,000 square feet, the first Charter Square building was a risk given that Dominion and its equity partner, Prudential Real Estate Investors, also did it on spec. The building is now 58 percent leased.

“We’ve seen good activity, we’re very pleased at where we are,” Andrews said.

There are few large blocks of available office space in downtown Raleigh, where the vacancy rate is 11.1 percent, according to Xceligent Karnes.

In addition to the Charter Square south tower, the Wells Fargo Capitol Center, 227 Fayetteville Street and One Bank of America Plaza all have continuous spaces over 20,000 square feet, according to DTZ Research.

Andrews expects the first Charter Square building to be fully leased by the time Dominion breaks ground on the north tower, which is likely to occur during the first half of next year.

Andrews said Dominion has not finalized who its equity partner will be on the north tower. Dominion and Prudential are also partners on Wade III, a 100,000-square-foot office building being constructed in the complex known as Offices at Wade near the PNC Arena.

That building, which is about half leased, is scheduled to open July 22.

Charter Square’s north tower will also likely face competition from several new downtown office projects that are now at various stage of development.

The project that is expected to move forward first is developer Gregg Sandreuter’s Edison office building planned for the corner of Martin and Wilmington streets.

Kane Realty is also planning to build an office tower on the Dillon Supply warehouse site it is seeking to redevelop in the warehouse district. A hearing to discuss that project is scheduled for Tuesday.

Bracken: 919-829-4548 or dbracken@newsobserver.com;

Twitter: @brackendavid

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