NC plans to sell two office complexes in Raleigh. Here’s how much they’re worth
Last year, lawmakers directed the state to sell several aging office buildings that occupy more than 21 acres of prime real estate near downtown Raleigh. Now the state knows what they’re worth.
The Division of Employment Security offices on Wade Avenue and the former headquarters of the Division of Motor Vehicles on New Bern Avenue could fetch about $43 million, according to appraisals done for the state Department of Administration.
The most likely buyers would be developers who would tear down the existing buildings and replace them with a mix of offices and homes and perhaps some retail, according to Integra Realty Resources, the firm that did the appraisals.
In both cases, the replacement of long-established state office buildings with private development could bring big changes to their neighborhoods.
Lawmakers did not set a deadline for selling the property, and the Department of Administration has not put them on the market yet. The state needs to figure out how to relocate people who are still working in the buildings, said department spokeswoman Julia Hegele.
There’s already interest in both properties, particularly the Wade Avenue site, Hegele said.
“We routinely get calls about when that property’s going to be listed, because as you can imagine that’s a pretty good piece of property,” she said.
The Wade property, on the corner of St. Mary’s Street near the Hayes Barton neighborhood, is the larger of the two. The state acquired the former Rex Hospital site in the early 1980s, and it now includes nearly 260,000 square feet of offices on 15.7 acres.
The largest and oldest building was built for the hospital in 1935, and the space is dated and “not competitive with most office properties in the market,” according to the appraisal.
As a redevelopment site, the property is worth about $31 million, according to the appraisal. A likely redevelopment plan would be something like Budleigh East, where a former housing complex at the corner of Oberlin and Fairview roads is being replaced with a mix of single-family homes, townhouses, apartments and a small amount of retail.
About 300 people still work at the Wade Avenue site, said David Rhodes, spokesman for the state Commerce Department, and there are no immediate plans to move them.
DMV offices occupy key spot in Southeast Raleigh
The old DMV headquarters on New Bern Avenue east of downtown includes 185,000 square feet of offices on nearly 5.4 acres. Though a few DMV employees still work in the complex, the agency’s headquarters moved east to Rocky Mount in 2020 after the state determined problems with asbestos and fire safety in the Raleigh buildings were too expensive to fix.
Those problems persist, making demolition and redevelopment the most likely scenario, according to the appraisal, which puts the value of the property at about $12 million.
The old DMV headquarters occupies a prominent spot in Southeast Raleigh, the city’s historically Black neighborhood that is gradually gentrifying. Residents and local officials say they are eager to see the property redeveloped in a way that benefits the community and is compatible with the bus rapid transit line GoRaleigh is building along New Bern Avenue.
The sale of both properties is part of a larger effort spurred by lawmakers to renovate state government offices and build new ones in downtown Raleigh. Proceeds from the sales would go into the Downtown Government Complex Reserve for improvements to state offices.
This story was originally published January 13, 2023 at 5:30 AM.
