Five years ago this month, the Raleigh Racquet Club reached a deal to sell a chunk of its real estate fronting Falls of Neuse Road to a developer for $1.6 million.
As happened with many deals agreed to around that time, the sale never closed, and the club ended up holding onto the property while it waited for the market to recover.
Last week, a sale did finally get completed, although the only thing similar about the transaction was the purchase price. The club sold 16 acres at the back of its property to a residential developer for $1.525 million.
“It’s a lesson in learning,” said John Bruckel, a local real estate developer and longtime member of the club. “In the final analysis, this is a much better end result for the racquet club.”
The club’s efforts to sell its excess property are a reminder of just how much the market has changed over the past five years, and particularly over the past 18 months.
The original deal in 2008 called for Drucker & Falk to develop a 120-unit independent-living retirement facility on the five acres fronting Falls of Neuse – the most valuable portion of the 36 acres that the club owned. While the sale would have given the club the best per-acre price, it also would have required it to relocate its pool and get an easement through the retirement community.
But the housing downturn that began in 2008 put the brakes on nearly all new projects.
It was particularly hard on retirement developments such as the one Drucker & Falk was proposing, since many people finance a move into such facilities by selling their homes.
As the real estate slump dragged on, the racquet club decided it couldn’t wait any longer to do something about its pool. Instead of building a new one elsewhere on the property, it decided to renovate the existing one.
To raise money, it came up with a real estate plan that involved marketing the 16-acre tract of unused land as an infill development to homebuilders. The club was quickly approached by Ashton Woods Homes, which put the land under contract in late 2011.
The company hoped to put nearly 60 homes on the site, which required it to be rezoned to allow more homes per acre – from R-4 to R-6.
But neighbors objected to the proposed higher density, and the rezoning effort stalled. Meanwhile, the housing market continued to improve, and builder interest in the racquet club’s land spiked.
“In the last go around, there were five or six different companies that were putting in bids,” said Bruckel, who worked with the club’s president and general manager on the sale. “The market heated up to the extent that we got 50 percent more money for our R-4 than we thought we could get at the time.”
The club sold the property last week to Eastman Development, which plans to build a 35-home subdivision on the property.
Instead of having a retirement community at its front entrance, the club will now have a neighborhood called Wimbledon backing up to its outdoor courts.
The development will even have streets named Doubles Court and Topspin Court.
The hope is that Wimbledon will provide an influx of new members for the club – or, as Bruckel puts it, “it will be a short lob from Doubles Court onto the tennis court.” There are restrictive covenants on the type of materials that can be used to build the homes in the subdivision, although nothing that says the owners have to play tennis.
“We know that’s going to happen naturally,” Bruckel said.