If you thought downtown Raleigh’s skyline was done growing, think again. Highwoods Properties is lining up a new office tower on a prime parcel in the city center that already comes with zoning for up to 40 stories. If the project moves forward, it would bring big floorplate office space to the core and could add a new peak to a skyline recently reshaped by mixed-use projects.
As reported by Triangle Business Journal, Highwoods has confirmed it is planning an office building on the downtown site, which is already entitled for a tower of up to 40 stories. The article, by reporter Kayli Thompson, notes that the existing zoning gives the company room to pursue either a straightforward office high-rise or a larger mixed-use concept, though design specifics and a construction schedule are not yet public.
Highwoods Tightens Its Grip Downtown
This is not a one-off play for Highwoods. Earlier this year, the company expanded its footprint in Raleigh’s central business district with a joint-venture acquisition of Bloc83, a two-tower office complex. In a January press release, GlobeNewswire reported that Highwoods said Bloc83 was about 97 percent leased at the end of the year, a sign that certain downtown offices are still pulling strong demand even as the national office market struggles. The company also told investors that the Bloc83 deal gives it more flexibility to court and accommodate larger tenants.
What 40-Story Zoning Brings To The Table
Raleigh officials have spent the past several years signing off on rezonings that allow towers up to 40 stories on select downtown blocks. The idea is to let developers secure the right to build tall now, then wait until the market is ready before pouring concrete. City leaders and builders have treated these 40-story entitlements as a way to turn parking lots and sleepy parcels into taller, denser projects when the timing is right. WRAL has tracked several of those rezoning votes and the political debates that followed.
Why Tenants And The Market Care
Locking in maximum-height zoning effectively keeps a shelf of potential space ready for the day a big tenant comes along. A single large lease can be enough to justify breaking ground on a new tower, and analysts have pointed to the Bloc83 deal as a reminder that major investors still see value in downtown office properties. Axios Raleigh highlighted the state investment authority’s role in that transaction as a sign that institutional capital is still willing to bet on the market.
Even with zoning in place, though, a 40-story building does not just materialize because someone has a site plan. Brokers note that towers of that scale usually need a mix of substantial preleasing, committed investors, or secured construction financing before they move from paper to piling rigs…