Urban Infill

Repurposing property in an urban environment for new development. The term implies that the surrounding area is mostly built up and what is being developed will “fill in” the gaps. Urban infill usually focuses on repositioning underutilized buildings, often part of a community redevelopment program.

Putting ‘Urban Infill’ in Context

Urban Revive Developers, a real estate development firm known for its value-add and opportunistic redevelopment projects, recently embarked on an urban infill project in the vibrant downtown area of Raleigh, North Carolina. The project, named The Foundry at Glenwood, aims to reposition a once underutilized three-story building into a state-of-the-art creative office space, leveraging the charm and location of the historic structure.

Project Highlights:

• Location: Situated in a fully developed urban area with high foot traffic and surrounded by residential buildings, shops, and cultural venues.
• Design: Retaining the historic façade, the interior will be completely gutted and redesigned to feature open-plan offices, collaborative spaces, and green building technologies.
• Community Impact: As part of a broader community redevelopment program, this project aims to revitalize the neighborhood, increase property values, and attract further investments into the area.

The redevelopment is anticipated to cost approximately $15 million, with projected post-development valuation estimated at $30 million, based on the enhanced rental income potential and the high demand for modern office spaces in the area. The expected completion of the project is within 24 months, with a projected lease-up period of another 12 months to reach full occupancy.

Financial Perspective:

• Initial Purchase Price of the Property: $9 million
• Total Development Costs: $15 million (including soft costs and contingency)
• Projected Gross Effective Income: $2.4 million annually upon full occupancy
• Operating Expenses: $600,000 annually
• Net Operating Income (NOI): $1.8 million annually
• Projected Cap Rate: 6%, based on current market trends in the area

This urban infill project by Urban Revive Developers not only fills the gap in the existing urban landscape but also serves as a catalyst for further urban renewal and economic vibrancy in downtown Raleigh.