Investors pay $62.5m to turn Durham Mall into life sciences campus

Developers paid $62.5 million for an aging mall right next to the Durham Highway last week and plan to turn the 10-acre site into a “life sciences campus.”

The investment group purchased the land just south of NC 147 and west of Fayetteville Street. It is near Durham Bulls Athletic Park and the American Tobacco campus with a clear view of the ever increasing downtown skyline. Both plots are now home to Heritage Square and Pelican’s SnoBalls.

No official plan has been filed with the city, but a spokesperson for Sterling Bay – the Chicago-based development company at the center of the project – said the labs, offices and residential units are all part of vision.

They declined to answer questions from The N&O about the project and efforts to engage the community.

“We are in the very early stages of the project and are excited about the future of the site and the growth of life sciences in Durham, but we have no more information to share at this stage,” said the group via a publicist’s email. “We look forward to getting to work, meeting local residents and stakeholders, and making progress on programming and design, and would be happy to come back when there is more information to share.”

The group said the talent pool fostered by universities in the region was a big selling point and noted the presence of Google and GlaxoSmithKline.

“Raleigh-Durham is an exciting U.S. growth market with a unique character,” Andy Gloor, CEO of Sterling Bay, said in a press release.

Developers have paid more than $62 million for 10 acres in Durham along Highway 147, where they plan a life sciences campus with labs, living units and retail space. Today, the land is paved and the businesses are aging. Food World and Family Dollar are the latest tenants of Heritage Square.

Haiti has muddled history

The site is in a commercial area. Its closest neighbors include a historic black church whose congregation has worshiped in the area since 1897 and the Durham Freeway, which in the 1960s cut off the Haitian community downtown and destroys a once prosperous black neighborhood.

Julian Pridgen, pastor of St. Mark AME Zion Church, said the church has yet to be contacted by its new neighbors.

“It’s a bit of a shock to me,” Pridgen said of the sale. “I hope whatever they do, how can I tell?” — I hope they will take into account the existing community.

He would like the developers to hold meetings and ask for feedback before formulating their plans.

“Listen to us,” Pridgen said.

An uncertain future for Food World and Pelican’s SnoBalls

Although the property was marketed as “ready to use” in a press release JLL Capital Marketswho organized the sale, there are still a few companies, including icons of Durham Food World and Pelican’s SnoBalls.

Kwang Lee is the owner of international grocery story food world since 2005.

“Nobody knows,” Lee said when asked what will happen to his business.

This is one of the few grocery stores accessible to residents of Haiti and downtown. Pridgen said he was worried about the impact on those visiting the store.

Food World and a Family Dollar are the only remaining tenants operating in Heritage Square, a one-story mall that dates back to 1985.

The remaining storefronts are now vacant, the cracked sidewalk largely empty of cars. A year ago, they housed beauty supply stores, an auto repair center, an outpatient clinic for people struggling with mental health and addiction issues, a flea market mall and a Subway sandwich shop.

The properties were sold by LLCs owned by Blake Nucci and Chris Kono. They repaid a $21.5 million loan last year to acquire the land and leases, though the Pelican SnoBalls still have certain rights under a 2020 lease agreement, property records show. .

The owner of Pelican’s did not respond to requests for comment.

Who are the investors?

Sterling Bay is a national real estate developer with nearly $15 billion in assets under management or under development. This appears to be his first foray into the North Carolina real estate market.

“We invest and develop iconic propertiesproclaims its website, the italics itself.

One of his most important projects is Lincoln Shipyardsa sprawling mixed-use community intended to transform a 53-acre strip of industrial land on Chicago’s riverfront – a ‘city within a city’, the CEO said a local television channel.

The city has agreed to contribute up to $1.3 billion for the effort, more than 21% of the planned total price of $6 billion, the The Chicago Tribune reported. The grant sparked a court case and one policy change at City Hall, none of which stopped construction workers from innovating last year.

One of the investors in the Durham project has hinted that he may be asking for public funds here too.

“Durham is experiencing an influx of leading technology and innovation companies attracted by the region’s highly educated and growing population and proximity to world-class research institutions. As a result, the market is attracting substantial public and private funding to support innovation and technological advancements, but the city needs high-end facilities that can meet demand,” said Mark Burkemper, Senior Managing Director of Harrison Street and Head of North American Transactions. Press release.

Sterling Bay's life sciences building at its sprawling Chicago development, Lincoln Yards, will total eight stories and offer large, flexible floor plans.

Sterling Bay’s life sciences building at its sprawling Chicago development, Lincoln Yards, will total eight stories and offer large, flexible floor plans.

Lincoln Yards includes a life sciences section, eight floors of glazed laboratories on concrete slabs, each with a private balcony. A mini “executive parking” pad will be dug into the lower level.

The company has a dedicated “life sciences” wing, separate from its industrial, residential and retail operations. He says the practice is led by both healthcare experts and real estate professionals who understand the “demanding environments” clients expect.

Most of Sterling Bays’ holdings are in the Chicago area, including the Midwest HQ of Googlealthough he has undertaken projects in Texas, California, Florida, Oregon and Utah.

They have previously partnered with Harrison Street, also based in Chicago, on life science projects. Harrison Street said it has invested in 8.5 million square feet of laboratory space globally and is the largest owner of life sciences assets in the UK.

Acram Group, meanwhile, is a New York-based real estate company originally named JMC Holdings. They once owned Raleigh’s Citrix Headquartersbuying it for $68.5 million in 2014 before reselling it five years later for nearly $85 million.

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Edwin S. Wolfe