Significant Apartment Development Planned in Cary, N.C.

344-unit complex to be part of retail and office project


CARY -- Since its first store opened in 1991, people have converged on Crossroads to shop and work.

Soon, they will be able to snooze there, too.

Goldberg Cos. of Ohio has bought one of the largest remaining vacant parcels to build a 344-unit apartment complex that will be the shopping center's first residential project. Grading on the 18-acre site at Crossroads Boulevard and Jones Franklin Road is under way, with completion expected in early 2009.

The apartments would make Crossroads fit an increasingly popular mixed-use format in which people live, work and find entertainment in the same area.

Unlike office and shopping meccas such as Brier Creek and North Hills, which are ringed with apartments, developers had largely skipped Crossroads for other sites.

But now rising mortgage rates are turning potential homeowners into renters, and Crossroads is emerging as a major employment center on top of being a regional retail magnet.

In recent years, companies have flocked to offices in the Crossroads area because of its access to major highways, Research Triangle Park and the airport. The western Wake office market is the Triangle's third-largest, behind RTP and North Raleigh, according to Karnes Research.

Since 2004, the western Wake office market has grown nearly 19 percent, to 4.4 million square feet. Vacancies fell to 8.6 percent from 16.4 percent.

But residential development didn't kept pace.

In southwest Wake, the number of apartments fell 7.6 percent in the period, to 7,056 units, as some apartments were converted to condominiums. Vacancy rates fell to 6.4 percent from 9.7 percent.

Apartment developers are responding to area demand. The 393-unit Windsor at Tryon Village opened off Walnut Street in February, and Fairfield Residential of Texas is developing a 374-unit complex on Jones Franklin Road. Office park owners Crossroads and Duke Realty, which sold land at its Centerview office park to Fairfield, are finding a ready market selling land for apartments.

"If you think you wouldn't be building [more offices] for two to five years, it makes sense to take the gain now," said Duke senior vice president Jeff Sheehan. "It's the ultimate complement to your office site, with crossover traffic of people who work there and live there."

The Goldberg Cos. apartments could fill the few remaining Crossroads vacancies with businesses such as dry cleaners or shoe repair shops. Crossroads Plaza is 98 percent filled, according to its management firm, and has little room to expand.

The corporate section includes 500,000 square feet of offices, which are 98 percent leased, but there are 20 vacant acres for more offices, said Jimmy Barnes, president of Carolantic Realty, manager of the corporate park.

"We have sidewalks on both sides of Crossroads Boulevard and sidewalks throughout the office component," Barnes said. "You can literally walk to work and walk to 850,000 square feet of retail where you can find anything."

BUILDING CROSSROADS

EARLY 1980S: Commercial real estate broker Steve Stroud assembles 265 acres at U.S. 1/64 and Interstate 40 for the Harlon Group, a Texas land developer.

1985: Harlon sells acreage to the Ohio Public Employees Retirement System. Trustees of the fund propose "Crossroads Park," which would be the largest enclosed shopping mall in the state, with 2 million square feet of retail space.

1987: About 100 acres are sold to L.J. Hooker of Atlanta. The pension fund keeps 165 acres for offices.

1989: Hooker files for bankruptcy. Meanwhile, neighborhood opposition kills a proposed interchange with Interstate 40.

1990: New Market Development of Atlanta buys the retail land and begins construction. Office development is under way in Crossroads Corporate Park.

1991: Crossroads Plaza opens as the Triangle's "power center," an open-air shopping area with free-standing large anchor stores. Crossroads anchors include Service Merchandise, Home Quarters, Uptons and Phar Mor.

This content continues onto the next page...