RALEIGH, NC - An Atlanta developer has delayed construction of the Wade mixed-use development near the RBC Center in west Raleigh as it seeks equity partners in the midst of an anemic global capital market. Most of the street, sidewalk and infrastructure work is finished at Wade, but nothing has risen from the ground at the site where Post Properties plans to build 1,500 multifamily and single-family residential units and 150,000 square feet of retail.
"Wade is one of three projects that we've identified as our highest priority, but timing is the big question mark," says Jeff Harris, executive vice president of Post Properties in charge of the Atlanta, Charlotte and Raleigh markets.
Post Properties in 2007 paid $30 million for 125 acres at the intersection of Wade Avenue and Edwards Mill Road for a project that was first proposed by Preston Development Corp. of Cary. In a separate deal, Lichtin Corp. of Raleigh purchased the Wade land designated for five multistory office buildings and delivered the first two, Wade I and Wade II, in 2008 with about 97,000 square feet of space each. The buildings were 63 percent occupied as of Dec. 31.
Lichtin Corp. executive Karen Lichtin says all the partners involved in Wade's development remain committed to the project. "Everyone is still emotionally and financially dedicated to this project," says Lichtin. "We are very optimistic, that this project will be completed as envisioned." Post and Lichtin split the cost of much of the $2 million in road and streetscape improvements for a 1.6-acre town square that will be the centerpiece of the project.
Additionally, a Rhode Island hotel development company has purchased 2.6 acres designated for a hotel near the front entrance to the property. Stonestreet NC LLC, which is affiliated with Stonestreet Hospitality of Providence, R.I., paid $3.5 million for the land on Dec. 31, according to Wake County records. A representative of Stonestreet did not return calls to discuss the company's plans.
Harris says Post Properties, which has delayed five other projects nationally, now is seeking equity partnerships with institutional investors or pension funds so it can move forward with building. "We've been in conversation with prospective equity partners, but none are willing to commit to anything right now," Harris says.
Keefe Bruyette and Woods stock analyst Stephen Swett writes in a December report that while the apartment sector has benefited from people moving back into rental properties following the residential market collapse, he believes the tide will change in 2009. "As the economic decline deepens, we expect the areas of pain to spread, with economic weakness and employment losses in every region," Swett writes.
Source: Triangle Business Journal