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Downtown Raleigh is among the fastest-growing areas in the Triangle, with nearly 7,000 new homes created since 2015, according to the Downtown Raleigh Alliance.
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But only 274, or less than 4%, of those new homes were owner-occupied, according to the alliance, the downtown booster group. The buildings that have been built in and around the central business district in recent years mostly offer apartments for rent.
That’s why downtown boosters are especially excited about One Nash Square, a 20-story condo tower expected to begin going up this winter. The 82-unit tower was featured prominently in the Downtown Raleigh Alliance’s annual State of Downtown event last month as a hopeful sign that for-sale housing construction will pick up.
“We’ve produced an enormous amount of rental units, which has been great for that part of the market,” said Bill King, the alliance’s president and CEO. “But there are people who want to own homes.”
Residential buildings have dominated downtown development in recent years, King said. Since 2020, construction has begun or been completed on more than 5,000 homes downtown, with another 6,000 in various stages of planning, he said.
By the alliance’s definition of downtown, which includes Glenwood South, the Seaboard area and new apartment towers along South Saunders Street and Lake Wheeler Road, downtown’s population has more than doubled since 2015, to nearly 17,000, and could grow by another 7,400 by 2031.
So many apartments have been built that downtown rents have actually declined in recent years, King said.
“Which is a byproduct of adding such a massive amount of supply in such a short period of time,” he said at the State of Downtown event. “Though in this past quarter, we did start to see rent rise for the first time in years.”
Downtown residents tend to be younger and affluent, with college degrees and no children, according to census and other data. Nearly two-thirds were in their 20s and 30s in 2020, according to census estimates, and the average annual income of households within a mile of the State Capitol is more than $151,000, according to the alliance.
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What happens as those renters get older and want to own a home but remain downtown? And what about empty nesters who want to try downtown living?
Brian Ray of Alchemy, the New York-based developer of One Nash Square, expects some will want condos like the ones the company has begun selling.
Condos will range in price from $835,000 for a one bedroom on the fourth floor to $4.65 million for a three-bedroom penthouse with a 1,200-square-foot terrace. The building will have a parking garage, co-working spaces, a pool with a lap lane, a full gym and a lobby staffed round the clock.
“All of the amenities and some of the world-class programs we’re building in New York City,” Ray told the audience at the State of Downtown event. “We think the market is really primed for this type of evolution of product.”
There hasn’t been a condo project built downtown since The Fairweather, a 45-unit building on south West Street, was completed several years ago. The success of One Nash Square could encourage more, King said.
“It’s an interesting test of that part of our market to see how a building like this performs and if we can have more of those buildings,” he said. “I think having more for-sale units is helpful for continuing to fill out the housing spectrum throughout the region.”
One Nash Square will occupy a lot at the corner of Dawson and Martin streets that were cleared several years ago. In 2022, Alchemy paid $15 million for the .84-acre lot, plus another $1 million for the building next door that for decades housed The Berkeley Cafe before it moved two blocks away in 2023.
Alchemy’s original plans for the site called for a 36-story tower with about 400 rental apartments, something the company reconsidered last year when it looked at the crowded rental market downtown. The company hopes to complete the condo tower by 2029.
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