Office Building Back on the Block in Hot Market

RALEIGH, NC-Capital Center, a six-story office building near Cary’s Crossroads Plaza, is on the market again, after Houston developer Hines Interests Inc. dropped an option it had taken last summer. Hines was to buy the 152,000-sf building sitting on six acres and construct a second building on the property.

Hartford, CT-based Cornerstone Real Estate Advisors bought the fully-leased Capital Center in 1998 for $23 million. Cornerstone, like Hines, wanted to develop more office space on the adjacent land. But the fund lost its focus and put the property up for sale last year.

The Atlanta office of Cushman & Wakefield is talking to other prospective buyers for the 12-year-old building. Highwoods Properties, the Triangle’s largest office property owner is interested. Capital Center is the largest of several office buildings along Jones Franklin Road near Crossroads Boulevard. Highwoods has three buildings, called Situs, on the same street. Situs consists of two 60,000-sf buildings and a 40,000-sf building.

Between August and October, the amount of office space leased in West Raleigh grew by over 200,000 sf, which pushed the office vacancy rate to 3.7% in October. Overall office vacancy in the Triangle is 6.9% according to Karnes Research Co.