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Red Hat to Build Downtown Tower?

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According to Triangle Business Journal, Red Hat has asked a number of real estate development groups to submit proposals for the construction of a building with a minimum of 300,000 sq. ft. of space, which would be about 20 stories. Now if you were to add any residential and retail space to the building, it could be even higher. Red Hat is apparently drawn to a an empty site owned by the city on Lenoir Street.

On another note, Red Hat has announced that they will be creating 540 new jobs in Raleigh :)

http://www.bizjournals.com/triangle/print-edition/2011/01/14/downtown-bound.html

http://www.bizjournals.com/triangle/news/2011/01/10/red-hat-expected-to-announce-wake.html

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This is fantastic news! Red Hat seems to be in the right area for the talent that's available here. And maybe having Red Hat further established in Raleigh will help attract other company HQs as well.

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This is the type of news that I have been hoping for. It's time for the major tech players in the area to step up and help transform Raleigh's image so that it matches the tech hub that it has already become.

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By the way, it's almost certain that Red Hat would fill one of two projects that have already been approved and are simply awaiting tenants to sign a long term lease so they can begin construction: or Both developers responded to the Red Hat RFP, have approved site plans, have enough space to accommodate Red Hat's requirements (300k sf+), and can probably meet Red Hat's requirements for being able to fill their new digs by the end of 2012. It would be probably be impossible for any other developer to be able to respond to Red Hat's schedule without approved development plans in place.

My bet is on Charter Square. They have almost exactly 300k sf in tower #1, have the most prominent site on Fayetteville St (perfect for a new HQ), and (their ace in the hole) one of the development partners (Craig Davis) is the lease holder for Red Hat's current Centennial Campus Space.

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Isn't 300,000 sq ft about the amount of space Progress Energy will be vacating out of their older tower post Duke merger once their lease is up in 2013? If worse comes to worse Red Hat could always take that space in 2 years....although hopefully they'll still go for the "new from the ground up" headquarters

N&O article referring to Progress Energy office space downtown

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I think it will come down to the two projects and their intangibles. Charter Square has a Fayetteville St address, at the newest part of downtown, and possibly both towers could be built as a result. In the RFP I believe they are looking for a residential component. The only negative is the size of the first tower. It would be just enough for Red Hat, and nothing else. If their RFP is calling for a mix-used building with retail and residential, the approved tower 1 won't cut it. As for the Edison, I believe that each tower can be built without the need for the other three towers. Plus, the tallest towers are going to probably be the tallest in the city, and the already approved amount of retail for the entire project seems enticing. Who wouldn't want to be a catalyst for the largest development in the urban center of the city?

I wouldn't settle for those two though. While I believe sites 2 & 3 aren't right for the project, they are also available. But I would keep an eye out for the supposed Glenwood tower, One Glenwood. Being close to that are would serve well for employees, and being the tallest building outside of the main Fayetteville St corridor would be quite nice.

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My bet is on Charter Square. They have almost exactly 300k sf in tower #1, have the most prominent site on Fayetteville St (perfect for a new HQ), and (their ace in the hole) one of the development partners (Craig Davis) is the lease holder for Red Hat's current Centennial Campus Space.

Does anyone know whether Charter Square already had an anchor tenant lined up for that office space in tower #1? I'm thinking that they had to have had a tenant agreement in place since they've already started construction, albeit very slow.

My desire would be to see them sign on with the Edison project. It would definitely give that project a boost and some needed momentum.

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My understanding was Charter Square has no anchors now. Even though the parking deck below it is done, I do not consider the project having begun yet. An agreement with the City is the only thing that got that part done. I give Charter Square the edge though. The layout and size of those two towers can still be adjusted substantially to accommodate Red Hat. Can anyone say "Red Hat Center for the Performing Arts" ?

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This is exciting! Man it'd be swell for the Edison or Charter Square (or any new building) to rise up on the skyline. For the city *and* for Red Hat.

But this is also assuming that Red Hat will stay here, yes? Are we certain of this fact yet? I can't find any official announcements aside from the aforementioned.

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The announcement said they are staying in Wake County. Sites being considered are expanding Centennial Campus facilities, North Hills, Perimeter Park and several downtown sites.

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I hope this happens for DT. I said a while ago that Raleigh doesn't need to chase height but would stand out better with density. I know two words not often heard grouped together density and Raleigh. While Charlotte might have the height. A skyline of well positioned 400 to 500 footers can impress just as good. Raleigh has the potential and I hope it becomes a reality. The only problem with viewing the skyline now from a drive by angle is the massive amount of trees. You really can't tell that there are any buildings in and around DT or any other part of the city. However that is not a bad problem to have...the city of oaks is right.

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I hope this happens for DT. I said a while ago that Raleigh doesn't need to chase height but would stand out better with density. I know two words not often heard grouped together density and Raleigh. While Charlotte might have the height. A skyline of well positioned 400 to 500 footers can impress just as good. Raleigh has the potential and I hope it becomes a reality. The only problem with viewing the skyline now from a drive by angle is the massive amount of trees. You really can't tell that there are any buildings in and around DT or any other part of the city. However that is not a bad problem to have...the city of oaks is right.

Tried to reply the other day but the site was down... I agree with the above thoughts. Raleigh ITB has a fairly good street network on either side of Downtown that could support greater density and walkability. The city has to promote 'urban' development versus 'suburban' development in more areas, meaning multi-level mixed-use building that align with the edge of the street. There are many areas in Raleigh where this could easily take place and make a big difference in the cityscape.

If Red Hat builds a tower it doesn't necessarily have to be very tall to make a big impact on the feel of the city. Hopefully a residential or hotel component can be included. Seems like the RBC arrangement worked pretty well.

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The importance of the street grid cannot be understated. The sidewalks and connectivity provide the finished product that is a "city". Highwoods Blvd. Not City. North Hills. Pseudo City. Hell I'd be for cracking open the South Saunders sewer freeway (and Western/MLK) and recreating the grid that used to be between downtown and Caraleigh and giving Red Hat all that space for a campus adjacent to downtown, thereby extending the downtown footprint. A half dozen 5 story buildings with land leftover to sell off to private developers (really, would anyone ever use the triangular shaped lot the City was trying to sell site 5 I think) in a proper and accessible grid would densify the City and expand the taxable footrprint to boot.

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I have my fingers crossed for Charter Square.

The other possibility that I'm sure we'd all rather not entertain is that RedHat is in talks wiht Progress Energy and their landlord to take over whatever space is vacated as a result of the Duke Energy merger.

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I have my fingers crossed for Charter Square.

The other possibility that I'm sure we'd all rather not entertain is that RedHat is in talks wiht Progress Energy and their landlord to take over whatever space is vacated as a result of the Duke Energy merger.

Wouldn't Duke Energy move into those spaces? Or at least enough of them to not leave ample room for Red Hat?

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I have my fingers crossed for Charter Square.

The other possibility that I'm sure we'd all rather not entertain is that RedHat is in talks wiht Progress Energy and their landlord to take over whatever space is vacated as a result of the Duke Energy merger.

That newer Progress Energy bldg does look ripe for Red Hat to occupy, but I honestly suspect that Raleigh will push for Red Hat to occupy new space in one of the planned towers.

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Wouldn't Duke Energy move into those spaces? Or at least enough of them to not leave ample room for Red Hat?

Maybe, but maybe not.

Progress has 800,000 square feet downtown. There is absolutely no question that they will downsize operations here, but the question is by how much. Red Hat wants 300,000. If 500,000 is all Duke needs downtown after the merger (and I'd say that's likely a fairly realistic number) then there you have it.

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I think Red Hat wants to have some concrete plans within the next few months regarding space. At this point, I don't think Progress...err Duke Energy has any idea of what their final space needs will be in Downtown Raleigh. My bets are on a new tower.

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I think Red Hat wants to have some concrete plans within the next few months regarding space. At this point, I don't think Progress...err Duke Energy has any idea of what their final space needs will be in Downtown Raleigh. My bets are on a new tower.

I'm not very business savvy with these kinds of things but perhaps there's something to having your company in a big tower, especially one that is an important step in the growth/development of the surrounding area and especially when so few things are being built.

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Maybe i am missing something obvious, but it seems uncommon for a software company to build a tower in a downtown area. Most HQs are campuses in a suburban setting. So why is Redhat different?

One exception that comes to mind is Adobe's office in downtown San Jose, CA (Silicon Valley). But I can't really think of many other major software companies HQ'ed in a downtown core.

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Maybe i am missing something obvious, but it seems uncommon for a software company to build a tower in a downtown area. Most HQs are campuses in a suburban setting. So why is Redhat different?

One exception that comes to mind is Adobe's office in downtown San Jose, CA (Silicon Valley). But I can't really think of many other major software companies HQ'ed in a downtown core.

You hit the nail on the head as to why I'm skeptical that they would go downtown. I have to agree that it would be extremely unusual. However, they have stated that at least two sites downtown are in the running.

As ChiefJoJo said, since they currently lease from Craig Davis, it's somewhat likely they'll go with something else by Craig Davis to avoid a costly paydown of their current lease (expires in 2020). So yeah, that puts Charter Square in the running. But look at what Craig Davis is planning to build on Centennial Campus, right across the street from where RedHat is now: ac_maincampusdrive.jpg.

This is the first building of the planned Alliance Center. It is a 150,000 sf building. This combined with the 188,000 sf they currently lease at Centennial would more than meet their 300,000 sf needs. This would certainly be the easiest move for them, probably the least costly, and also the least risky for Craig Davis.

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There is an article on Red Hat, located on TWC News 14 website. There is more talk on a possible relocation to downtown?

Sounds very positive! Not a slam dunk, but probably wanting to get the very best price? Red Hat is very hard to read…do we keep and expand our HQ’s on campus/very easy choice. Or do we go for the brass ring, cost will be more, but we will stand out more in the long run. Decisions, decisions! My other thought is that Red Hat is still working with the city for a downtown location with every possible incentive….and possible updated building site plan approval needed? Especially sense Red Hat says they will decide “in a few months”?

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Red Hat confirms that they are focusing on downtown for a site:

http://www.newsobser...hat-snazzy.html

I think that's great. It looks like they're leaning towards Edison or Charter Square because of the parking issue. However it's a bit of a slap in the face for Red Hat to ask for more incentives after the city has already bent over backwards quite a bit to keep them here in the first place. I don't know if they were seriously considering moving to a different city or just teasing out some money (potentially 20 million apparently) but whatever, in the long run I'm sure it'll be better for Raleigh. At least they're here. I'd love for them to build a new tower.

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Although I would hope for a DT tower, I just don't think it makes sense. Per the few other comments,, why would a tech company move to a tower (outside of Adobe which I have walked by multiple times). Not sure of red hat's testing requirements, but the reason tech companies go to cheaper locales is first, the business model, but more importantly, their companies require tons of test lab space. It just does not make sense to put that in an expensive tower. Doing interoperability tests on every known hardware solution takes up a lot of space Look at companies like Cisco or IBM in RTP. Much of that space are secured labs.

Now, maybe Red hat is a different model but I have a hard time buying that they would go to a DT location. I hope I am wrong. And yes, I am a Tech Worker.

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