Commercial Confidential: Forestar’s East Morehead apartments

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CHARLOTTE – Up until a few months ago, one of the more recognizable intersections in the esteemed Dilworth neighborhood – Morehead Street and Kenilworth Avenue – was notable mainly for its row of abandoned office buildings, the most obvious being a derelict five-story building hugging the northeast corner of the intersection.

But in October, Charlotte-based Crescent Communities broke ground on its $55 million, 296-unit apartment project, igniting a turnaround on that corner of Dilworth that has been continued by Austin, Texas-based Forestar asking for a rezoning on the adjacent parcels to allow for an apartment project with up to 380 units and up to 15,000 square feet of retail, according to the rezoning application.

The Forestar apartment project likely won’t reach 380 units, said Anna Torma, Forestar’s senior vice president of corporate affairs, though she was tightlipped about specific plans until after the company is granted its rezoning request. Following last week’s public hearing on the rezoning, the Charlotte City Council will likely vote on the request at its Jan. 21 meeting.

Still, Forestar owns the property at the Kenilworth and Morehead intersection and Torma said the existing buildings will be demolished early next year. Within the past month, fences have been erected around the property and construction crews have been on the site, indicating demolition may be imminent.

Torma said demolition could take a few months and that construction would likely start in summer 2014. Once construction begins, it will be between 12 and 18 months before the units are delivered, she said.

But before any construction crews can get to the site, it must be granted the rezoning. In September, FMF Morehead LLC, a company formed by Forestar for this project, filed a rezoning petition with the city asking for a change in zoning on a 2.77-acre piece of land, eliminating an office classification and asking for site plan approval.

With Crescent already underway on its apartment project right next to the Forestar site, its Dilworth project will be delivered well before the East Morehead apartments can be finished. Generally, apartment developers wish to be the first to the market to take advantage of the first wave of demand. But Charles Dalton said that may not be too big of an issue in this situation.

Dalton, the president of Charlotte-based Real Data, an apartment market analytics firm, said that the Forestar development will be far enough behind Crescent’s project that it will be able to capitalize on the second wave of demand, and that he thinks both projects can coexist in the heart of Dilworth.

“They’re both pretty good locations, they’re kind of right between being in the neighborhood of Dilworth and next to the greenway and the more commercial hub around the Metropolitan,” Dalton said. “They’re in a good little spot there. They’ll probably be (delivered) six months apart from each other. It might not be too big a disadvantage.”

Project description: Forestar is in the middle of the rezoning process on 2.77 acres in Dilworth to allow apartments on the site.

Address: Intersection of Kenilworth Avenue and Morehead Street.

Units: Up to 380

Rezoning decision: Set for Jan. 21

Expected start of construction: Summer 2014

Expected completion: 12 to 18 months after construction begins