And six-story Morehead Square at 200 E. Morehead, across from a nine-story apartment complex, has space for another office building.
With uptown office space hard to find and parking expensive, "It's no coincidence big chunks of dirt are becoming available on Morehead," Moffat said.
Demand there persuaded Morehead Properties to consider redeveloping the site of the old Salvation Army building, which it renovated for offices at 1051 E. Morehead St. in 1994, he said.
The company hired an architect to work on plans for a project that could be started after leases in the existing building expire in summer 2009, he said.
Height and density are uncertain, Moffat said, "but one of the attractive features of our buildings is they are not overly dense."
East Morehead is in what real estate analysts refer to as the midtown office market, a commercial wedge south of I-277 that also encompasses parts of Kings Drive, Kenilworth Avenue and Providence Road.
Because the area is in the shadow of uptown, demand is particularly strong. "We are hearing from interested folks who want their own piece of East Morehead," Moffat said.
At the end of the fourth quarter, Karnes Research Co. pegged the midtown vacancy rate at 6.3 percent, second lowest among the county's 11 market areas, behind uptown's 3 percent.
That tight supply provided the incentive for Insite to buy the vacant funeral home and bring in a private equity investor to start the redevelopment process.
Blanton said Insite is negotiating with several institutions to assist with financing. No leases have been signed, but leasing agents are talking with several potentially large office tenants.
727 E. Morehead St.
--Size: 12-story building with 180,000 square feet of offices and 15,000 square feet of shops and restaurants on about 1.5 acres.
--Value: About $60 million, including land.
--Name: The address is the tentative name, but anchor tenants will have naming opportunities.
--Timetable: Construction to start in fourth quarter of 2008 and be completed in first quarter of 2010.
--Lease rates: Low- to mid-$30s per square foot annually. Leasing agent is Keystone Partners, www.keystone
--Features: Building will apply for Leadership in Energy and Environmental Design (LEED) certification and include bike racks and showers for tenants, courtyard, green space, rooftop patio, private balconies on seventh and 11th floors. Each parking level will have direct access to an office floor. Cars will enter garage via Royal Court on back side of the building. Office floors will have skyline views.
--Development team: Insite Properties, developer with principal Tony Pizzo leading project; BB+M Architecture, architect; J.F. Schultze Construction LLC, general contractor; Matrix Real Estate Services, project management consultant; LandDesign Inc., site engineer. 727 E. Morehead St.
Royal Court condo high-rise development 727 E. Morehead St.
Royal Court condo site
State Street site