Development Beat: Cameron Village’s Newest Apartments

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Thursday, December 8, 2016

So you probably thought Cameron Village had enough apartment complexes by now, right?

Wrong.

There’s been something like 45* new apartment complexes put up in and around the Cameron Village area in the last ten years, but it appears the appetite for downtown-adjacent, overpriced apartment living in Raleigh is insatiable.

We have to admit: it would be pretty great to have a Harris Teeter, a Chick-fil-A, a Goodberry’s and a Fresh Market all within walking distance, but still, how many more residential units can that area withstand?

The answer, according to Texas-based developer The Leon Capital Group, appears to be “at least 201 more.”

In a recent site plan review application filed by the organization, whose North Carolina offices are based out Charlotte, Leon Capital outlines its plans to build the new, three-story, 201 unit Hillstone Cameron Village apartment complex.

What’s most impressive to our mind about the property, which is spread across 3.562 acres, is the fact that it’s been cobbled together from a total of 18(!) separate parcels, the majority of which are single-family homes. The properties to be absorbed by the new Hillstone Cameron Village also include the Roundabout Art Collective at 305 Oberlin Road.

The Roundabout Art Collective

The Roundabout Art Collective

As reported by the News & Observer in October, Leon Capital paid $11.6 million for the land, and doesn’t plan to break ground on the new apartments for at least a year. We imagine the process might take a bit longer.

The 50′ tall building, combined with a 293-space parking deck will be 237,654 SF in total size and be accompanied by a 7,872 SF outdoor amenity area. A breakdown on the size of the units, in terms of bedrooms, is not available at this point.

Site plans for the project were put together by Withers Ravenel with preliminary architectural designs put together by JDavis Architects.

A perusal of Leon’s past apartment projects — the company also builds out retail properties and self-storage units — tells us that Hillstone will likely blend in well with the many generic, “upscale” apartments in the surrounding area.

1711 Caroline, one of Leon Capital's many previous developments

1711 Caroline, one of Leon Capital’s many previous developments

An article from the Charlotte Observer, where, as we mentioned, Leon Capital’s North Carolina operations are based, that decries the bland, uniform look of many of the Queen City’s newer multifamily developments feels like it could have been published in Raleigh’s News & Observer with only a few minor tweaks. Take this line for example:

The popularity of mid-rise, wood-framed buildings stems from increased demand for urban projects that fill in small, expensive parcels, said Bruce Lindsey, Charlotte-based regional director for trade group WoodWorks.

“If the land costs more,” he said, “the structure has to cost less.”

While we don’t necessarily agree with some of the conclusions reached there: namely, that local government should mandate more interesting design features, it would be nice if the look and feel of Raleigh’s new, ticky-tacky apartment complexes was as big a part of all those community conversations as the impacts they will have on traffic congestion and surrounding property values. A boy can dream.

*Not a real figure.

The area highlighted in yellow indicates the future site of the Hillstone Cameron Village apartments

The area highlighted in yellow indicates the future site of the Hillstone Cameron Village apartments

17 thoughts on “Development Beat: Cameron Village’s Newest Apartments

  1. You really need to stop calling these new apartments “overpriced”. They may be out of your price range (as they are out of mine) but they’re probably going to sell out pretty quickly.

  2. They are overpriced! When Raleigh rental prices are on-par with cities that are twice as big and frankly have more things to do there is a problem. True, they will sell out quickly but that does not mean they are not overpriced.

  3. Steve,

    I think I agree with you for the wrong reason: I don’t like using the same adjective over and over again to describe something, it’s lazy.

    I agree more with Braden that regardless of whether they sell out, they are “overpriced.” I don’t mean to use that word in the sense that I can’t afford to live in them (I can’t) but rather in the sense that the price in comparison to the quality of the product offered is too high. I can afford Starbucks, but I’d still call it overpriced.

    On another note, studio apartments in those complexes cost, on the low end, about $900/month. Median per capital income in Raleigh is around $31k: by HUD definition, these units are “unaffordable” (unaffordable housing is when someone spends more than 30% of their income on it.)

    I don’t have any answers or solutions, but I feel like there has to be something better than what’s being done now.

    James

  4. Given most of those buildings are over 85% leased, virtually any economist, developer, real estate agent, or anybody with business knowledge would most likely disagree with the “overpriced” statement. If market demand is there, price is a function of demand…so no they are “overpriced”.

  5. James,
    You and I definitely have a different definition of that term, which of course is perfectly reasonable. I appreciate your use of stats to support your point, but I’d have to disagree with your justification. Cameron Park is hardly an area that would constitute the “median” income for Raleigh, so using the city-wide median income seems irrelevant to me. By your logic, if I follow correctly, any above average home would be “overpriced”.

    Also, in regards to the quality of the product, I’m not sure I follow. I assume you mean the quality of materials and size per unit? These are certainly factors in real estate prices, but we all know location comes first and foremost. The reality is the demand for this kind of development, at least for now and the foreseeable future is much higher than the supply.

    I think my larger point was what you alluded to at the beginning. You have a habit of referring to any new apartments as being “overpriced” when in reality they’re just going for the market price. This shouldn’t be viewed as a bad thing, because it means wealthy, presumably well-educated people want to live in Raleigh’s center city. And while I agree with your point that traffic needs to be considered, any restrictions on density in the downtown area will exacerbate, rather than alleviate, affordability problems. Some people seem to think that new “luxury” apartments are causing rents to go up, but really, it’s Raleigh’s growing population and the desirability of the city that are causing this.

    Anyway, I enjoy the blog, and your podcast as well. A diversity of opinions is good, and I hope I don’t come off as too cranky.

  6. Steve,

    Lot of great points there, especially the part where you said you enjoyed the blog and podcast 🙂

    But you’re absolutely right: CV area is not a “median income” part of the city. I just brought up stats bc I wanted to reiterate the point that I wasn’t saying overpriced bc you and I can’t afford to live there – majority of the people in the city can’t. There’s nothing wrong with that, though.

    As far as quality, yes, I was referring to the type of materials and overall build quality of many modern-day multi-family developments. I’ve heard a lot of anecdotal horror stories from both renters and contractors about a lot of these types of places. For me it’s like this: if I’m buying a pair of headphones from $5 Below, they may look nice/expensive, but I don’t expect much and I usually get what I pay for. A lot of these new apartment complexes seem like $5 Below headphones for Bose prices, if that analogy makes any sense.

    But as you and Jess pointed out: if the market demands/accepts it, well, that’s how it is. I guess I just wish that wasn’t our main criteria for judging things, but I’ll cut myself off there before I get all political.

    You’re absolutely right that location more than anything determines price in real estate, and I agree that these luxury apts. are not driving up real estate costs, and that any attempts to block density will make things worse rather than better.

    I can see how my habit of referring to apts. as overpriced can be interpreted that way, and I’ll probably stop describing them as such going forward. I will probably continue to harp on the design features of most of them, because with few exceptions (I dig Skyhouse) these places are terrible to look at.

    That’s just my personal opinion of course, and I hope I never give the impression of thinking of myself as any kind of expert. If anything, I try to make fun of myself for my lousy opinions/taste.

    Speaking of: Jess, yes, you are absolutely correct. But if this recent presidential election taught us anything, wasn’t it that we should maybe stop listening to the “experts” so much? And even further back, how many of those economists you mentioned predicted the housing crash of 2008?

    Chris,

    Thanks for the link. I did a real basic search on imaps for the main LLC that owns the properties, which is where that image came from.

    James

  7. I strongly agree with the idea of apartments between Hillsborough Street and Cameron Village.

    This is literally the nicest part of town. You ain’t gonna get a brand new apartment in the nicest part of town for cheap. The only way to make sure that affordable apartments do eventually exist here is to just keep building. As the stuff getting built today gets older, and newer stuff is built, the older stuff will naturally become less expensive. I always see you guys complaining about the low quality of these stick-built complexes; however, that means they are on a faster depreciation schedule, and therefore, they will get cheaper faster. As long as we steer clear of infill development backlash and keep on building, this is the surest ticket to affordable in-town living in Raleigh.

    So, I love infill apartment complexes. HOWEVER. The execution of this specific plan has a lot of things wrong with it.

    (1) The city and neighborhood have recently gone through a very detailed process where a small area plan was painstakingly crafted. This development does not adhere to the letter or the spirit of the plan as written and does nothing contributing to improvement of the area, instead exploiting it for maximum profit at the public’s expense.

    (2) The development is monolithic. This is a very large block and could use to be broken up. This is an octopus-like development right in the center of the block completely prevents any future ability to break the block up.

    (3) The small area plan calls for Enterprise Street and Oberlin Road to be the main connection between the pedestrian areas of Hillsborough and Cameron Village, yet this plan contains no retail along Enterprise or Oberlin.

    (4) The small area plan calls for upzoning the property to OX-4 and OX-5 in order to densify the area and make it more attractive, and yet the developer is sticking with the less-intensive RX-3 category, probably in order to grease the skids and make it as hard as possible to stop, and so that they will be held to lower urban design standards (eg. block size, as noted below.)

    Does this development require council review? Even if not, I can think of two possible ways to deny this site review submission and force something better:
    (1) They are requesting to close and take ownership of part of the Maiden Lane right-of-way so that they can build on it. Per NC General Statute 160A-299, street closures are entirely at the discretion of council, (“…the council may adopt an order closing the street…”) and if council feels it is contrary to the public interest, it can be denied. I feel such a closure is overwhelmingly contrary to the public interest and therefore any such petition should be denied.

    (2) The UDO specifies a maximum block perimeter of 3000’ for the existing RX-3 zoning, and 2500’ for the proposed OX-5 zoning. The existing block has a perimeter of approximately 3200’ so this development meets neither standard. I would encourage a strict adherence to the letter of the law here. And if possible, go ahead and rezone to OX-5 to force the better standard, since the small area plan already clearly showed the city’s intention to do so.

    The obvious way to break the block up would be to punch Hope Street through to Park Drive and terminate Maiden Lane at a T-intersection with this new connection. The developers of this project are missing one property (219 Oberlin Road – Evolve Movement) in order to make that happen. If they can get that property, then great; if not, there are still other possible ways to break up the block:
    https://goo.gl/3izAxg (Including 219 Oberlin)
    https://goo.gl/7knJJ8 (Not including 219 Oberlin)

  8. Had a kinda wordy reply on here stating how I don’t really like the execution for this development. I guess it got moderated? Oh well.

  9. Orulz,

    Once in a blue moon WordPress requires me to approve a comment: no idea why. Yours should be up, lot of great stuff in there, and I think I’m going to update the post to tell people to read it.

    And just for the record: I don’t delete comments unless they’re spam or direct harassment. Even trolls are welcome to post here! (I miss you JenJen!!)

    James

  10. James,
    I’m glad Raleigh has an active blog/comment community where I can recognize names (like Orulz!). It’s a testament to the city that so many people care about these issues.

    I actually tend to agree with your design critiques. And your analogy about headphones makes perfect sense. Unfortunately, I think really well-designed buildings would just be even more expensive. For example, Hargett Place looks like it’s going to be a really nice development, but it’s also going to be 700K+ per townhome. The strange part is, that’s probably a pretty fair price for those.

    But, having spent a lot of time in big northeastern cities, I have to say most urban housing is actually pretty boring. Manhattan has some great buildings of course, but most people live in pretty bland apartments. Nonetheless, I want to see better design, too. In a way, maybe their quality has a silver lining, most of these will be torn down again relatively soon and replaced with something different. I doubt Glenwood South will be all midrises once the 2050s roll around.

    Also, if I can shamelessly plug something: someday I hope you do a podcast on Amtrak in Raleigh, covering the PIP and the prospect of higher speed rail to DC and Atlanta.

  11. To orulz’s points:
    Those are all correct, and this project will probably have to presented for approval to the City’s planning board and city council (public hearings if there is a rezoning). In that case, the developer will have to justify why this project should be approved even though it does not meet the small area plan, future land use map, etc.

    At the same time however, the BEST way to ensure projects like this don’t get built is to make sure the land doesn’t fall into the hands of the developer. Don’t want a gas station being built next to your subdivision, buy that lot yourself.

  12. Steve,

    I imagine you’re right about well-designed buildings costing more, and I would also guess it would be harder to get financing for such projects. Such is life in the big city!

    I am a big fan of many of these new downtown townhome projects (I *love* the Peace Street Townes), especially because some of the developers involved with them (Stuart Cullinan of Five Horizons Development) are truly seeking to create high-quality, affordable (although not for the likes of me, haha) housing for people.

    Fair point about most urban housing being pretty bland – but at least within the city proper for places like Philly, NY, the new multi-families are generally of a much higher build quality than the ones Raleigh has been getting.

    And yes I agree 100% regarding the silver lining: within 10-15 years, people aren’t going to want to pay a premium to live in many of these structures, so the prices will drop until someone else buys the land and builds something new.

    Would love to do a podcast on Amtrak! Do you want to send an email to inboundraleigh@gmail.com with some more details?

    Brad,

    I actually know a family near Crabtree Valley who did something similar to that: bought the adjacent property to their home so it wouldn’t be developed into multifamily living. Of course, this isn’t an option for everybody, but it’s nice if you can afford it. Fortunately, both the husband and wife in the example I mentioned are hardworking, successful (and wonderful, although I don’t think they read this column) people, and they were able to preserve their neighborhood through this purchase.

    James

  13. The thing is, I DO want this land to fall into the hands of a developer. I am definitely in favor of developing apartments in this part of Raleigh. I am a big fan of complexes like 401 Oberlin, Berkshire Cameron Village, and 616 Oberlin. I also support student complexes like Stanhope and Valentine Commons. Are there things I would change about them, sure, but to a certain extent you have to let developers do what they do – too much restriction and too many demands can put a big damper on development.

    As for Hillstone (this one) – The density, the unit count, the parking, etc. I take no issue with those aspects of this development; if anything they should go denser and add more units IMO. The parking is IMO probably more than is needed, since it is nearly 1.5 spaces per unit, but if the developer wants to build that many spaces then I do not see the need to hold them back.

    My only issue here is with the way the site plan is laid out.

    I do not like the way this specific proposal maxes out the site with a single octopus-like building with tentacles stretching far enough in every direction to completely block any attempt to break up this very large block. They have made a small token gesture in this direction with a narrow, meandering, privately owned path along the northern lot line. This is laughable. The city has made the argument over and over that blocks need to be human-scaled in order to improve our city’s walkability and connectivity – and they are dropping a steaming pile right on the middle of the block that’s most important for connecting Hillsborough Street and Cameron Village together. Puh-leaze.

    What I am afraid of is, that this is what they arrived at AFTER negotiation with the neighborhood. For example, they have a certain unit count in mind in order to justify the purchase price of the land, but the neighbors demanded NO MORE THAN THREE STORIES at all costs. Therefore they are left with no choice other than to completely max out the building envelope on the site, rather than dedicating some of the land to new streets.

    I don’t know what’s going on here and I have no idea where this one will go. All I know is that I have seen the site plan and I don’t like it.

  14. I believe that Leon Capital Group acquired a 14 acre parcel of land in north Raleigh as well. Any word on the plans for that lot?