- Epic Games just purchased a failed mall outside Raleigh, North Carolina, for $95 million.
- The gaming giant plans to erect a multimillion-square-foot headquarters that could be about 18 times the size of its current base outside Raleigh. The site can accommodate up to 4.5 million square feet of new space.
- Epic has been in a standoff with Apple and Google over its installation of an in-game payment system in its blockbuster game “Fortnite” that allowed users to skirt fees charged by the tech giants.
- The deal demonstrates not only Epic’s unblunted ambitions in the wake of the lawsuit but also how developers are creatively and profitably repurposing mall properties that have collapsed from a yearslong shift in consumer shopping habits and, over the past year, the pandemic.Â
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Epic Games, a video-gaming giant, has purchased a former mall outside Raleigh, North Carolina, for nearly $100 million, with plans to raise a multimillion-square-foot headquarters on the site.
The company closed on the parcel on December 31, according to a person with direct knowledge of the transaction. Epic announced the deal publicly on Sunday evening after an inquiry from Business Insider.Â
The purchase highlights the company’s ambitious growth plans despite a major rift with Silicon Valley. Over the summer, both Apple and Google pulled Epic’s blockbuster “Fortnite” title from their digital stores when Epic unveiled an in-game payment system that would allow customers to make purchases directly from Epic and skirt the fees normally levied by the tech companies.
Immediately afterward, Epic launched a lawsuit against both tech giants, challenging the game’s expulsion from their stores. The case is ongoing and holds major implications for Epic’s business, as it could cut off Epic’s marquee game from billions of devices around the globe.
In announcing the new headquarters project, Epic appears unbowed by the standoff, with the company imagining dramatic growth for its operations.
The company purchased the 87-acre Cary Towne Center, a nearly 1 million-square-foot failed mall that was acquired two years ago by the developers Turnbridge Equities and Denali Properties from CBL Properties, a publicly owned mall landlord that filed for bankruptcy in November.
Jason Davis, a managing director at Turnbridge, said the company and Denali then steered the property through a monthslong local rezoning process to allow up to 4.5 million square feet of mixed-use development on the site.
Elka Looks, a spokeswoman for Epic, said the company had not yet drafted detailed plans for the project. She declined to reveal whether it had hired an architect, how large the development would be, or if Epic would seek to complete the project in phases to allow the company to grow into the additional space over time. The project has the potential to be vastly larger than Epic’s present headquarters, which is a short distance away in Cary, North Carolina, and totals about 250,000 square feet.
“We’re still pretty early in development and don’t have any plans to share just yet,” Looks said in an email. “The facilities will include both office buildings and recreational spaces. We are committed to working with the Town of Cary to explore ways some of this property might be used by the community.”
Cary Mayor Harold Weinbrecht said in a statement that he was “extremely proud that Epic has chosen to call Cary home for their new global headquarters.”
“We look forward to continuing to work closely and collaboratively with the Epic team as they conceptualize their new campus,” Weinbrecht said.
Looks said Epic would break ground on the project this year and anticipated relocating employees to the site by 2024.
The deal is an example of how floundering mall properties that have been upended by the pandemic and a yearslong shift in consumer spending to e-commerce are being lucratively reimagined by developers. Davis said that shortly before Turnbridge and Denali purchased the Cary Towne Center, one of its anchor tenants, JCPenney, had closed its location at the property. Within months of purchasing the property, two more anchor tenants, Sears and Macy’s, dropped out, Davis said. Turnbridge and Denali subsequently cleared out much of the property’s remaining stores and were going to begin razing it next month, with plans to build a mix of office, residential, retail, and hotel space on the sprawling site, Davis said.
Instead, Epic preemptively approached the group to purchase the site for $95 million, Davis said, a hefty premium on the roughly $40 million the developers paid to buy the property and prepare it for development.
“I think Epic liked this site for the very same reasons why we thought it was the perfect property to develop,” Davis said. “It’s minutes from downtown Raleigh, it’s close to the airport, and it’s one of the only critical masses of land ready to build on in one of the fastest-growing markets in the country.”
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