Consolidation among some of the larger tenants in the Greensboro/ High Point/Winston-Salem market will have a big impact on office development during the second half of the year, according to Dodson R. Schenck Jr., vice president of Hagan Properties Inc.

United Health Care will consolidateits operations into a new 170,000-square-foot, Class A building in the North Elm Street corridor. Currently, United Health Care occupies space in numerous multi-tenant office buildings throughout the northwest submarket of Greensboro. VF Corporation purchased the former Cone Mills corporate headquarters office at North Point Corporate Center, also in the North Elm Street corridor, and will consolidate many of its divisions into the 76,000-square-foot building. Both the United Health Care consolidation and the VF consolidation may provide a shot in the arm for the area and stimulate interest from users, brokers and developers, as these companies will bring hundreds of workers to the area.

These consolidations will leave large blocks of second and third generation space that will need to back filled in 2002. This could be a difficult task, considering that the Triad is made up of a multitude of diverse, mid-sized tenants, as compared to Charlotte, which is driven by Bank of America and First Union, or Raleigh, with its large technology-based companies such as Cisco and IBM. Developers in the northwest section of town will be cautious with speculative development next year until they can gauge how rapidly some of this space will be absorbed.

In Greensboro, most of the development this year is occurring in the Green Valley Office Park. This park is extremely popular with traditional Greensboro companies because of its convenient location - it is very close to the Piedmont Triad Airport - and accessibility. Starmount Corporation will complete two Class A suburban buildings this year - the 126,750-square-foot 800 Green Valley Road building and the 75,000-square-foot Cone Mills Building. Cone Mills Corporation, which sold its corporate headquarters building to VF Corporation, will become a tenant at Green Valley Office Park, where it will occupy approximately 50,000 square feet when its building opens in the first quarter of 2002.

The Airport submarket in Greensboro, the most active and vibrant submarket in the Triad over the last few years, is seeing activity with a 46,000-square-foot Class A building being developed by Liberty Property Trust and a 45,000-square-foot building being developed by Bissell Companies. The Airport submarket is very popular with companies that are seeking a single office presence in the Triad.

Downtown Winston-Salem is experiencing some revitalization with the development of One West 4th Street by Magnolia Partners. This 475,000-square-foot, Class A building will be anchored by a 197,000-square-foot Wachovia Bank, the 165,000-square-foot Womble Carlyle Sandridge & Rice law firm offices and a 40,000-square-foot building being developed by JDL Castle Corporation. The development is approximately 80 percent pre-leased prior to its scheduled opening in the first quarter of 2002.

Grandover, in the southwest submarket, is seeing continued activity by its developer, Koury Corporation, with the construction of a 52,500-square-foot, Class A office building. Tenants at Grandover enjoy its proximity along I-85 and the amenities it offers such as two golf courses and a first-rate resort and conference center at the adjacent Grandover Hotel.

"People should keep an eye on the North Elm Street corridor in the northwest submarket of Greensboro," says Schenck. The area, which saw significant activity in the late 1990' but not as much activity in the past two years, may be gearing up for a resurgence with the addition of United Health Care and VF Corporation. Also in the northwest submarket, LindBrook Development Services just announced plans for Huntington Place, a 225,000-square-foot mixed use infill project that will incorporate Class A office, retail and residential space in a six-story building, as well as a 350,000-square-foot medical office project. Of great interest to commercial real estate brokers and developers will be the success of Highwoods Properties development under construction at New Garden and Bryan Boulevard (Jefferson Village) in the northwest submarket. Long term, this is a great location that offers good access to both downtown and the airport. Jefferson Village is 100 percent speculative and is the first building in an 80-acre park that will ultimately have 800,000 square feet of Class A office space. "It will be interesting to watch how tenants in the market receive this unproven office location," says Schenck.

Dodson Schenck Jr. is vice president of Hagan Properties Inc.


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