RALEIGH – Skyscrapers continue to be added to the Raleigh’s future skyline, the latest being a 20-story tower headed for the Warehouse District.

The developers of a new multifamily, nearly 300-unit residential tower at 320 West South Street in Raleigh plan to raise more than $48 million for the project, which according to  the company will include luxury apartments, a stand alone parking structure, and other amenities.

Capital Square, a Richmond, Va.-area company, opened a $48,451,000 fund, CRSA Opportunity Zone Fund VI, to raise equity capital from investors in order to develop the project at 320 West South Street, the company announced in a statement.

According to the Administrative Site Review filed with the City of Raleigh, updated on August 6, 2021, the 1.166-acre, 20-story project will include 296 residential living units and 396 parking spaces, as well as ground-floor retail space.

Another new tower is located at 400 Hillsborough Street and is scheduled for completion in the fall of 2023. It’s the latest in a series of planned developments from downtown to North Hills and beyond that is transforming the Capital City skyline. Two 40-story towers also are projected to be coming to North Hills.

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The company said the project will include 297 residential units and 437 parking spaces. The proposed project will contain 201 1-bedroom units, 92 2-bedroom units, and three 3-bedroom units, according to the plans filed with the City of Raleigh.

“The fund combines the many benefits of tax deferral and exclusion from being in a qualified opportunity zone plus exceptional economics associated with a 20-story development in downtown Raleigh, the state capital of North Carolina,” said Louis Rogers, founder and CEO of Capital Square in a statement.  Rogers added that the company specifically chooses to invest in and develop projects in capitol cities because these types of markets are often insulated against downside during economic pullbacks or recessions. 

In a second statement, the company noted that the total investment required by the project will be $121 million.

Filings with the City of Raleigh indicate that the architect for the project is Raleigh-based JDavis Architects.

320 South Street, Southwest Perspective. Image: Capital Square.

The designs noted in the company’s statements indicate the building will feature amenities such as a “resort-style” swimming pool, a coworking space, a rooftop lounge, and a fitness center, as well as 8,384 square feet of ground-floor commercial and/or retail space.

The Capital Square website also states that outdoor spaces and features will be included in the project.

“This is a great location for this type of development; it checks all of the supply and demand boxes,” said Adam Stifel, executive vice president of development with Capital Square.  “There is a lack of luxury multifamily properties in the downtown submarket, as rental demand for this type of project keeps growing.”

Wake County has seen a large volume of transactions in the “very high value segment” of the real estate market in July 2021 and August 2021, according to data from the Wake County Register of Deeds, with more than $1 billion in total transaction volume occurring in that segment of the market during those two months.

Housing costs

Twelve of the 16 deals in this segment involved the transfer of a multifamily property, according to the data reviewed by WRAL TechWire.

Rent growth in the Raleigh market grew by 2.5% month-over-month, according to the latest data released by Zillow, with the company’s observed rent index placing rental rate at $1,647/month.

But the latest available ApartmentList data shows an even higher increase in month-over-month rent for 2-bedroom and 1-bedroom apartments, with 4.1% growth of rent rate in August compared to July.  The same data shows a rental rate increase of 14.3% year-over-year in Raleigh, with average rent of a 2-bedroom apartment now $1,424 and a 1-bedroom apartment at $1,244.

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