Epic Games purchased the 980,000 square foot Cary Towne Center for over $90 million.
This epic real estate acquisition, the center, is relatively close to Epic’s current headquarters. How did Epic come about buying this property?
As a result of consumers preferring to shop online, many tenants left Cary Towne Center because of insufficient funds to pay rent. While there are some stores that remain open, a majority of the mall is unused and is blocked off. Of course, COVID-19 did have something to do with helping to spur the process of re-organization, leading Tencent’s Epic Games to purchase the property.
As a result of the rezoning, the center is now permitted to be used for other purposes in addition to shopping. This rezoning was a boon for the firm with this Epic real estate acquisition because this allows them to begin construction at their earliest convenience.
The center was supposed to be a sports and recreation center for Cary’s town, but since Epic will be using the site mainly for their offices, the company will be working with the town to compromise.
The final building will have both office and recreational spaces.
Epic should be commended for buying and revamping an old space instead of buying land and constructing an entirely new building. It is essential to note that Epic buying a mall to use is clever because malls have open spaces as a result of food courts, movie theatres, and parking garages.
Significant Work on This Epic Real Estate Acquisition
There will be work to do, but Epic would just need to customize the space to their liking. Most of the foundation for a great space is already present. The fact that they are also working with the town to make sure that the people of the city can still utilize the area is also something that is fantastic and works to increase overall synergy.
Oftentimes with the construction of abandoned or unused buildings, it can be challenging to get information on work that was completed or to get clarification on specific aspects of the building. With the town of Cary on Epic’s side, they should have a relatively straightforward construction process.
Epic choosing this mall is unique for yet another reason.
The mall is located in North Carolina.
Many technology companies are moving to areas such as Texas, Georgia, and North Carolina as opposed to more expensive places like California. Dispersing around the country makes it so that these technology companies’ employees are more empowered because they have more spending power with the money they earn.
The large real estate acquisition by Epic Games shows that there is potential promise for commercial real estate.
Epic purchasing the mall in Cary is not too much of a surprise as they are currently located in North Carolina and have been based there since 1999.
It might seem like a bizarre choice for Tencent’s Epic to want space as ample as Cary Towne Center, but the more area that they have, the better more opportunities for the company to expand and utilize space without concerns.
This space gives the company the ability to have movie sets, motion capture rooms, and hire more employees.This also provides the option to delve into other areas, such as constructing an eSports Arena or letting other smaller gaming companies rent out space.
Not only did Epic save a mall from being demolished, but they also are planning on making it so that the locals will also benefit from the space.
Kudos to Epic on a job well done.
The Epic Real Estate Acquisition and The Cries On The Death of Commercial Space
What I can glean from this one piece of data is that while many are sounding the alarms on commercial property. It makes no sense to think that different groups will not find value in commercial space. This recent acquisition shows that one can go ahead use commercial property to meet the needs of the current era.
Commercial property leases and the overall rate of leases may not look as they did before but remote work does not destroy the value of commercial property entirely. For instance, employees may prefer a hybrid approach to work where they can come in for a few days and work from home for another few days.
Indeed, firms like Brookfield, and others are betting that remote work will not entirely take away the need to come to the office. Firms like JP Morgan and Netflix have shown mixed results on the value of remote work for the corporation.