Plans for 32-story tower in downtown Raleigh stall due to COVID, $769M deal

Aaron Sánchez-Guerra
·2 min read

Plans for an addition to Raleigh’s skyline are delayed indefinitely after commercial real estate firm Highwoods Properties acquired a slew of properties that includes a building envisioned for a future 32-story high-rise.

Highwoods Properties, based in Raleigh, agreed last month to acquire the commercial real estate properties from Atlanta-based Preferred Apartment Communities Inc. for $769 million.

The acquisition includes a leasehold interest in the property at 121 Fayetteville St. The agreement means the site has been leased to Highwoods for development, although the company doesn’t own it.

Preferred Apartment Communities pitched plans for the downtown building in the summer of 2019 as 121 Fayetteville, a modern new tower with a seven-story parking garage and 375,000 square feet of office space with ground-level retail space.

This doesn’t mean that future development plans are off the table, Brendan Maiorana, Highwoods executive vice president of finance, told The News & Observer.

“We haven’t scrapped any development plans for 121 Fayetteville and think the work that the Preferred team did with Duda|Paine (Architects) is a fantastic option to go vertical,” said Maiorana.

“We’re just focused on the acquisition in front of us and will remain open to future vertical opportunities on the property if and when they present themselves, and thus we have no current plans to start construction at 121 Fayetteville.”

Durham-based Duda|Paine Architects designed the proposed high rise with Kane Realty leasing the project. The sleek tower would have a 15th floor sky lobby and outdoor terrace, according to previous plans.

Plans for another addition to Raleigh’s skyline are delayed indefinitely after a major property acquisition that includes the 121 Fayetteville Street property envisioned for a future 32-story high-rise.
Plans for another addition to Raleigh’s skyline are delayed indefinitely after a major property acquisition that includes the 121 Fayetteville Street property envisioned for a future 32-story high-rise.

Boone Dupree, CEO of Preferred Office Properties, a subsidiary of PAC, said he couldn’t comment on the transaction but that development plans were not stalled prior to the agreement.

Construction plans for 121 Fayetteville were delayed in 2020 by the coronavirus pandemic, however, according to The Triangle Business Journal, which first reported news of the acquisition.

The pending transaction is set to close in the third quarter of this year. It includes the 29-story Wells Fargo Capitol Center tower on 150 Fayetteville St., the 16-story CAPTRUST Tower in North Hills, as well as the Charlotte properties of Capitol Towers and the Morrocroft Centre office complex, according to a Highwoods news release.

The 121 Fayetteville St. site currently has a parking garage and restaurants like Benny Capitale’s pizza and Paddy O’Beers, a bottle shop.