Aug. 25--RALEIGH -- A new lease might lead to a new building and more competition among developers in one of the Triangle's hottest office corridors.
Pepsi Bottling Ventures has agreed to lease about 28,000 square feet at GlenLake office park, near Crabtree Valley Mall in northwest Raleigh. The lease, which will last at least 10 years, is the biggest in a flurry of recent deals to plug vacancies at GlenLake. The 158,000-square-foot building that will house the bottler is now 70 percent preleased; it is expected to be finished next month. Its twin, built five years ago, is full.
Highwoods Properties is thinking about starting on a third.
"We still have people who are interested in GlenLake beyond what we may be able to accommodate," said Ed Fritsch, Highwoods' chief executive.
The Raleigh real estate investment trust is refining designs and calculating construction costs for a 122,000-square-foot building.
If demand remains strong, construction could begin before the end of the year. It would take a year to build, Fritsch said.
Pepsi Bottling Ventures took the space to consolidate three Raleigh offices. "It's very convenient to Interstate 40 and the airport," said Eric Croson, chief financial officer for the bottler. He declined to disclose terms of the deal, as did Rich Harris, the GVA Advantis broker who represented Pepsi.
New and expanding companies have been drawn to the northwest Wake County submarket because of its central location and proximity to stores, restaurants, homes and major highways. The submarket is generally bounded by the Beltline, Creedmoor Road and Interstates 540 and 40.
The office vacancy rate in the submarket dropped to 6.7 percent at the end of June, from 11.3 percent a year earlier, according to Karnes Research of Raleigh. The Triangle's office vacancy rate dropped to 12.1 percent from 14.2 percent during the same period.
Office developers have been scrambling to restock the shelves in the submarket.
Highwoods and others are considering projects that could add 1 million square feet or more to the submarket within five years. It took a decade for the corridor's last million square feet to be built.
Grubb Ventures is building a 110,000-square-foot building a couple of miles away, at 3700 Glenwood Ave., and it wants to break ground on a twin within a year. The Soleil Group and Triangle Development Group are each planning office towers at Creedmoor Road and U.S. 70 that would total 160,000 square feet of space by 2010. If they were to break ground tomorrow, "it wouldn't unravel us," Fritsch said. "If some of these prospects we have firm up, we'd go ahead."
