In the News
Old is New in Durham as Tenants Jazz Up Warehouses
McKinney advertising agency leases a space that is flooded with light at the American Tobacco Campus in Durham, N.C.
How does a company make a dramatic statement with its commercial real estate property at a time when little credit is available for new development? One way is to adapt an old building to a new use with a snazzy, high-tech rehab.
In Durham, N.C., where the tobacco industry once thrived as factories rolled out cigarettes and warehouses stored the aromatic tobacco, Capitol Broadcasting Co. has developed a massive, mixed-use development, American Tobacco Campus. The company has converted dilapidated warehouses and an abandoned factory to state-of the art office and retail buildings.
The buildings feature wireless technology and electronic monitoring systems so that they can be managed remotely, says Michael Goodmon, vice president of real estate at Capitol Broadcasting, a Raleigh-based communications company that owns several television stations in North Carolina, as well as the Durham Bulls baseball team. The lighting system uses a high-tech and energy-efficient design that takes advantage of natural light.
The factory that closed in 1987 formerly produced Lucky Strike cigarettes. Now its strengthened walls and interior are in demand by companies that don’t want the typical office tower or mid-rise. On the tobacco campus, the youngest building was built in 1954 and the oldest, in 1874.
Capitol just extended the lease of another key tenant, McKinney advertising agency, which has contracted through 2021 for about 60,000 sq. ft. Previously, McKinney’s lease was set to expire in 2014. Before moving to the American Tobacco Campus in 2004, McKinney occupied more typical, multi-story office space in Raleigh.
Five years ago, to lure the ad agency, Capitol Broadcasting provided a hefty tenant allowance to help McKinney convert the space to its needs, says Goodmon. The more flamboyant design and an upgrade two years ago have helped the agency become more competitive, says Goodmon.
“They compete against huge advertising firms on Madison Avenue. When they look for talent, they’ve got to have a type of space that attracts that type of talent.”
