The surge of redevelopment activity along Raleigh’s Hillsborough Street shows no signs of slowing, with developers now actively seeking to transform several large parcels on the western end of the thoroughfare.
A Georgia-based student housing developer wants to redevelop a 3.2-acre site along Hillsborough that is now home to the offices of the online book publisher Lulu.com.
Athens-based Landmark Properties wants to convert the site into a five-story apartment complex with some retail and a parking deck, according to a rezoning request filed with the city and a letter sent to neighboring property owners earlier this year.
The property, between Concord and Rosemary streets, is owned by Lulu founder Bob Young, who was previously CEO of Red Hat and is now CEO of the Raleigh-based drone company PrecisionHawk.
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Young paid $3.5 million for the bulk of the site in 2007, including the historic N.C. Equipment Co. building. Two years later he acquired two adjacent parcels for $1.325 million, according to property records.
Young invested considerable money renovating the N.C. Equipment Co. building, known for its big bulldozer sign and Lulu’s headquarters since 2009.
Landmark and Lulu executives didn’t return calls and emails seeking comment on the rezoning.
Landmark is the developer behind Retreat at Raleigh, a student housing development about two miles west of N.C. State University’s campus that opened in 2012. Landmark has since sold the project for $40.6 million. The company is developing a number of urban infill projects under its “The Standard” brand.
Redeveloping the Lulu site would add even more density to an area of Hillsborough that is quickly becoming a mini-city of private student housing complexes.
Valentine Commons, a 10-story, 928-bedroom complex at Hillsborough and Dixie Trail, opened in the summer of 2012. And Stanhope Center, Kane Realty’s 882-bed student housing complex, opened earlier this year.
Stanhope was fully leased when it opened, and its initial success is likely to only encourage more student housing projects close to campus.
Already two other smaller student housing projects, the 96-bed Hillsborough Lofts at 2510 Hillsborough and Blue Sky Services’ 49-bed project at 105 Friendly Drive, are under construction and expected to open next summer.
N.C. State officials have expressed a desire to see more diversity in the types of housing projects proposed along Hillsborough, and the market may soon dictate exactly that.
The university’s undergraduate population isn’t really growing, which means new projects will likely need to broaden their appeal or draw students who now find themselves living farther from campus.
Demand for student housing may also dictate what gets built farther west on Hillsborough on a 2.18-site between Montgomery and Furches streets, just east of where Hillsborough intersects with Faircloth.
FMW Real Estate, the Charlotte developer behind a number of apartment project along Hillsborough, is now behind the effort to rezone the property, an effort which has been going on for well over a year. Jim Zanoni, an FMW owner, didn’t return a call seeking comment.
But FMW has done projects targeted at young professionals, such as 927 West Morgan, as well as smaller projects targeted at students, including 1301 Hillsborough, 2604 Hillsborough and 2811 Hillsborough.