Author: Dudley Price; staff writer
Edition: FinalSection: Business
RALEIGH -- The downtown warehouse district's No. 1 landlord is moving east to Moore Square. Greg Hatem of Empire Properties has contracted to buy three buildings at Martin and Blount streets in an area that has been passed over for much of the redevelopment that has come to other parts of downtown.
"It's a risk but we see [downtown] Raleigh growing to the east," Hatem said. "We feel East Raleigh is where West Raleigh was five or 10 years ago."
The 90yearold buildings have a total of 20,000 square feet. Hatem plans to renovate most of the space into offices or shops, and a partner in the purchase might occupy about 5,000 square feet when the renovation is complete in about a year.
One of the buildings, at 224 S. Blount St., houses the Pour House, a bar that has a lease for several more years. But except for an incense shop, the buildings on Martin Street are vacant. An antiques store that rented space in the Martin Street buildings folded about a year ago.
Hatem was one of the first to see potential in the warehouse district bounded by Cabarrus and Dawson streets and the Norfolk Southern Railway on the west side of Fayetteville Street Mall. Four years ago, he and his partners renovated an old warehouse that now houses Jillian's Billiards Cafe and since then have bought four more buildings on West Martin Street.
But with few warehouses left for sale in the district, Hatem hopes to find the same potential several blocks to the east of the downtown mall, where redevelopment has been slower coming.
Although the area hasn't enjoyed the momentum of Glenwood South and the warehouse district, where dozens of new restaurants and clubs have opened in the western section of downtown, a number of entertainment businesses have opened around Moore Square in recent years. They include Caffe Luna at Hargett and Blount streets, just across from the new Exploris children's museum, and Tir na nOg Irish Pub at 220 S. Blount St.
A new middle school also is under construction just east of the square.
"This is kind of pivotal for us," Hatem said. "It's a departure from what we do." Hatem also is buying a 3,000squarefoot warehouse near the school site at 315 S. Bloodworth St. for renovation into offices.
Real estate experts predicted that there would be demand for Hatem's latest acquisitions because downtown has become increasingly attractive to small firms, particularly technology companies, who like the allure of older buildings and the convenience of nearby restaurants and nightspots.
"It would be a pleasant little place to have an office," said Mike Williams, vice president of Karnes Research Co., which studies commercial real estate trends in the Triangle. "They have parking right behind it and can get to services and it would be good for entertaining."
Williams referred to a city parking garage just west of the buildings and restaurants around Moore Square and in City Market.
"The market is tightening up and what has been driving it is small tenants who want to be downtown," Williams said.
Only 5.4 percent of the office space downtown was vacant in July, down from a vacancy rate of 13.4 percent in July 1998, according to Karnes.
Errol Frailey, president of the Downtown Raleigh Alliance, a booster group, said owners of City Market may have had trouble filling some vacant retail space because the building Hatem is buying sat empty for a year right across the street.
"The buildings are kind of the missing link," Frailey said.
Copyright 2003 by The News & Observer Pub. Co.