Chicago company plans life science project by Durham Freeway

A sign inside the Underground at Heritage Square in Durham announces its closure after 20 years.  The land was sold in June 2022 to investors led by Chicago real estate development firm Sterling Bay, which plans to erect a life sciences campus.

A sign inside the Underground at Heritage Square in Durham announces its closure after 20 years. The land was sold in June 2022 to investors led by Chicago real estate development firm Sterling Bay, which plans to erect a life sciences campus.

Marie Helene Moore

Developers paid $62.5million for an aging shopping center just off the Durham Freeway 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 sits close to Durham Bulls Athletic Park and the American Tobacco Campus, with unobstructed views of the ever-growing downtown skyline.

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 area universities 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.

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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. Marie Helene Moore

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 downtown Haitian community and destroyed 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 has been marketed as “ready to use”, there are still a few companies, including Durham Food World icons and Pelican’s SnoBalls.

Kwang Lee has owned the international grocery store 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 void 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, who took out a $21.5 million loan last year to purchase the land and acquire the leases, property records show. so to be clear, did they buy the mall, or just part of it.

Kono, a Duke University graduate, and Nucci worked at an investment firm in New York before entering into their own business partnership, according to a press release from JLL Capital Markets, which arranged the sale.

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.

One of his most significant projects is Lincoln Yards, a sprawling mixed-use community intended to transform a 53-acre strip of industrial land on Chicago’s riverfront – a “city within a city”, said the CEO at a local TV channel.

The city has agreed to pay up to $1.3 billion for the effort, more than 21% of the projected $6 billion total price, the Chicago Tribune reported. The grant prompted a lawsuit and policy change at City Hall, which didn’t stop 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 seeing 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.

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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

Lincoln Yards includes a life sciences component, eight stories of glass-walled 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 Google’s Midwest headquarters, though it 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 Citrix headquarters in Raleigh, buying it for $68.5 million in 2014 before selling it five years later for nearly $85 million.

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This story was originally published July 6, 2022 9:05 a.m.

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Mary Helen Moore covers real estate and business for The News & Observer. She grew up in eastern North Carolina and attended UNC-Chapel Hill before spending several years working at newspapers in Florida. Outside of work, you might find her riding her bike, reading, or tending to plants.

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