Please create an account to participate in the Slashdot moderation system

 



Forgot your password?
typodupeerror
×
Businesses

Epic Games Buys a Huge Mall (polygon.com) 65

Epic Games is buying an old shopping mall -- with nearly one million square feet of space -- and plans to convert it into its new global headquarters by 2024. From a report: The deal gives Epic the 980,000 square foot Cary Towne Center for $95 million. Cary Towne Center is about 2 miles from Epic's current HQ. Epic Games has been based in Cary, North Carolina since 1999, and has 2,200 employees in its global workforce. The company, best known for developing the Unreal Engine and Fortnite, has about two dozen subsidiaries and studios in other locations around the world, acquiring or establishing more than half of them since Fortnite Battle Royale launched at the end of 2017. Sitting on 87 acres, Cary Towne Center, like many shopping malls in the United States, has struggled to remain open as anchor tenants have left or closed altogether thanks to shopping trends moving online. WRAL-TV of Raleigh noted that only a few stores remain open there, and much of the mall is blocked off. Its current owners picked it up in 2019 for $31 million, then got the Cary Town Council to approve its rezoning, which would permit office use, hotel rooms, and multi-family housing in addition to commercial space.
This discussion has been archived. No new comments can be posted.

Epic Games Buys a Huge Mall

Comments Filter:
  • Not dumb (Score:4, Insightful)

    by timeOday ( 582209 ) on Monday January 04, 2021 @02:44PM (#60895990)
    Whoever flipped this thing on regulatory arbitrage in 1 year for $60M is a genius at political corruption. Even so, Epic got a good chunk of real estate compared to the monuments that company managers like to build to themselves. Apple Park cost $5B.
    • Its current owners picked it up in 2019 for $31 million, then got the Cary Town Council to approve its rezoning

      Not sure how that works in the US, but over here this takes the right friends and a few hefty envelopes passed under the table. These sort of deals come along all the time, old school buildings, churches, offices... and somehow the same guys always manage to snap them up and then get the rezoning through.

      • Re:Not dumb (Score:4, Insightful)

        by jellomizer ( 103300 ) on Monday January 04, 2021 @03:46PM (#60896282)

        In the United States for most Towns, the government is still rather approachable. I live in the middle of nowhere. They wanted to rezone some property a mile away from my home. The Town sent me a note that it was happening, and when the City console meeting was. I can go to that meeting, listen in to what it was about, Bring up any objections I may have. I didn't because it was far enough away from my home, and they weren't doing anything that would impact my water or air.

        Usually the problem is they are a lot of people who assume the system is broken, thus they try to work around it first, then they hit a roadblock because you now annoyed the officials, most a middle class guys. So you now have to but head with city hall. Vs actually just working with the system at first and things often run much more smoothly, heck they will often be willing to do some things extra.

      • Not sure how that works in the US, but over here this takes the right friends and a few hefty envelopes passed under the table. These sort of deals come along all the time, old school buildings, churches, offices... and somehow the same guys always manage to snap them up and then get the rezoning through.

        Real estate developers are some of the most corrupt people in existence in the USA. They are always neck deep in muck with local politicians and it was what made the claims that Trump is a "political outsider" so laughable. He may not have been elected to a position before 2016, but he was hand in glove with politicians for long before then. It is like calling a political lobbyist an outsider.

        In short, Trump before 2016 was just paying the bribes instead of receiving them.

      • In the US, office and commercial have the same broad zoning category. The local municipality frequently has something finer-grained under it for "shopping" vs "offices", but changing between those sub-classes is way easier than changing it from commercial to residential or industrial.

        The mall's been mostly empty for a long time, and bankrupted multiple companies that tried to keep it as a mall. So the city's quite pleased that someone is going to make use of it (and thus bring in tax revenue). Even witho

        • by jbengt ( 874751 )

          In the US, office and commercial have the same broad zoning category.

          To be pedantic, in the parts of the US in which I've worked "Commercial" is offices, "Mercantile" or "Retail" is shopping. Each has particular code issues with zoning, fire, exiting, plumbing, ventilation, etc. I've worked on several projects converting stores/malls to offices/call centers and it is true that changing zoning from a mall to an office space is not that difficult, they have a lot of the similar impacts on roads, sewers, e

      • Not sure how that works in the US, but over here this takes the right friends and a few hefty envelopes passed under the table.

        It works the same in America, except the envelopes are passed above the table rather than under it.

        In most of the world, bribing politicians is illegal. In America, it is not.

    • by godrik ( 1287354 )

      Frankly only time will tell whether it is a great idea or a completely dumb one!

      At this point, it is almost 500 sqft of surface per *global* employee. That's an insane amount of space even when taking into account the need for server rooms and things of that sort.

      So my guess is that they would sublease some of it or they are looking at fliping it.

      • Re:Not dumb (Score:4, Interesting)

        by Junta ( 36770 ) on Monday January 04, 2021 @03:32PM (#60896222)

        Well, for one, various articles mention that while they plan to have their HQ there, they were also taking over plans that were in progress for use by the community and other companies, so they are basically being a landlord and presumably for their brand to be carried on the 'community recreation and sports center'.

        So they probably won't directly be the consumer of all the space, but owning gives them first choice at how things go down and then have enough real estate to potentially pay back their investment within a decade through leasing to other companies.

        • by DarkOx ( 621550 )

          Lowe's did the very same thing in Wilkesboro before their move of HQ to Mooresville.

          They bought out the failed shopping mall and converted it slowly to office space. I think they still use it for customer service and various IT functions.

          Initially some shopping remained but eventually they took the entire thing over. Thinks like the food court actually got converted to the corporate cafeteria. Honestly it was one of the nicest corporate campuses for actually working at day in day out I ever experienced. Wh

          • Cary Towne Center is a one story mall (maybe there is an upper level in a couple of spaces meant for anchor stores but otherwise, it is all one level).

    • by bws111 ( 1216812 )

      Is there any actual evidence of 'political corruption'? How is it not better for the city to have a useful, tax-paying property than a dead mall? Was there any opposition to the rezoning?

      • by cusco ( 717999 )

        It's rezoning, what more evidence do you need? I've never seen a rezoning of a project that was estimated to cost over a million dollars that didn't benefit the zoning commissioners, their families or their business partners. Frequently all of the above.

    • Epic got a good chunk of real estate compared to the monuments that company managers like to build to themselves. Apple Park cost $5B.

      I wonder how much you think it costs to remodel an entire mall, a cost not at all factored into the cost yet...

      I mean I guess if you don't mind everyone working in dirty Old Navy and Pottery Barn mall stores there's no more cost...

      Would you rather buy a 100 year old house and be constantly paying to maintain it, or pay to build a new house from scratch with the latest materia

      • by jbengt ( 874751 )

        I wonder how much you think it costs to remodel an entire mall

        To turn it into offices? I'm guessing somewhere between $50 and $100 per sq ft, depending on what's there now and how much you want to do with it. Will windowless office space be acceptable? How much electrical infrastructure will you need? (It will typically be more than a mall.) How much phone and data infrastructure will need to be provided? (Much more than for a mall) Is the ventilation and A/C adequate for an office (The A/C is probably

    • by Kisai ( 213879 )

      It's a sad state of affairs when shopping malls, which are themselves small cities within a city, are torn up into condos and other nonsense because the city council happened to agree with the mall owner of the day that the mall is no longer viable after 30 years.

      Like what utter wasteful nonsense.

      The problem is not malls. You could reconfigure nearly every shopping mall in the world into office spaces without doing any serious renovation. The local mall, when some of the spaces weren't open for used got use

      • by jbengt ( 874751 )

        You could reconfigure nearly every shopping mall in the world into office spaces without doing any serious renovation.

        Having been involved in the design of such projects, I know that is not true.
        Don't necessarily disagree with some of your other points, though.

  • by kalpol ( 714519 ) on Monday January 04, 2021 @02:46PM (#60896004)
    Worked out pretty well as I recall. Lots of room and they built a slide from the second deck to the first, and kept the food court sign.
    • by UnknowingFool ( 672806 ) on Monday January 04, 2021 @03:06PM (#60896126)
      Also important: lots of parking spots for employees. I know of a former mall being converted into a community college. There was a bonus benefit in that the mall was on many city bus routes for students that could not afford cars.
      • by Megane ( 129182 )

        The mall that Rackspace took over had been on the decline since the late '80s. The final straw was in the late '90s or so, when a bus park-n-ride was built a mile away, and then the mall owners demanded that the bus company pay the mall for the privilege of continuing to use the mall as a bus stop. Poof went what little walk-by traffic they had, poof went the mall. Fortunately Rackspace was needing more office space. (I'm sure their old office space downtown near the phat pipes became more hosting space.)

        A

  • by cirby ( 2599 ) on Monday January 04, 2021 @03:05PM (#60896118)

    That's an insanely good deal.

    For a comparison, it's more than $50 per square foot per year just to lease office space in a lot of cities.

    Even cheaper cities run $25/sq ft/year, just for rent.

    So they basically bought a massive office building for the equivalent of a four year lease.

    Not to mention the huge amount of parking room they have.

    • by JRock911 ( 848012 ) on Monday January 04, 2021 @03:41PM (#60896254)
      That mall has been deserted and circling the drain for years. IKEA was supposed to come in last year and bailed. Last time I was there, over half of the stores were empty. This was pre COVID so I assume now its even worse. One of the oldest malls in this area. Hate to see it go but I'm really surprised it lasted this long.
    • All that is considering that "older" mall doesn't require a lot of work on its aging infrastructure.

      You ever seen them tear down a perfectly fine restaurant and rebuild a slightly nicer one somewhere? It doesn't seem to make sense, but I'd wager it does since someone somewhere is writing checks to make that happen.

      I'm just saying buying a mall (whose species has been on the wane for 20+ years), may not be the genius business decision it initially seems.

    • Well not quite as they are going to have to do a lot of investment to make the property viable as office space. When you add that in, they probably got it for the price of a 5-10 year lease. Maybe still a good deal. But it's not like they can just move in desks.
    • by jbengt ( 874751 )
      Well, the rental cost of office space in Cary, NC is probably cheaper than that, maybe less than half the $25 per sq ft per year you're thinking. And the cost to turn the mall into office space is probably going to be as much as buying it in the first place, if not more. Still a reasonably good deal.
  • by Dirk Becher ( 1061828 ) on Monday January 04, 2021 @03:21PM (#60896180)

    "Gotta catch mall."

  • by account_deleted ( 4530225 ) on Monday January 04, 2021 @03:25PM (#60896198)
    Comment removed based on user account deletion
  • Food Court (Score:4, Funny)

    by awwshit ( 6214476 ) on Monday January 04, 2021 @04:48PM (#60896498)

    The Food Court is already there. See you in the Orange Julius conference room at 2pm!

  • by Ranger ( 1783 ) on Monday January 04, 2021 @05:10PM (#60896614) Homepage
    There are lots of dead and dying malls, and I'm sure the owners would love unload them. There are YouTube channels devoted to dead and dying malls. [youtube.com]
  • The canary in the coal mine of any mall is Spencer's. If they close, the mall is officially dead.

    • by jbengt ( 874751 )

      The canary in the coal mine of any mall is Spencer's. If they close, the mall is officially dead.

      Good thing for the malls around here, then, that none of them have a Spencer's.

  • as deadlines approach, their cubes get smaller
  • It is considered an autonomous unit for mid-mall snacking.

Professional wrestling: ballet for the common man.

Working...