A coffee house and restaurant called the Tribeca Cafe and Lounge is headed for the first-floor retail space at the Hue building in downtown Raleigh.

George York of York Properties confirmed that the restaurant has signed a lease for the spot at 310 W. Hargett St., which was previously home to the White Rabbit bookstore.

The company's Facebook page says that the restaurant's target opening is May and bills the restaurant as a place to enjoy a quiet cup of organic coffee, a place to dine on sushi, exotic salads, sandwiches and soups and a place to enjoy art shows, music and other evening events.

The restaurant is not affiliated with Rocky Top Hospitality's expanding Tribeca Tavern chain.

White Rabbit Books is closing its Raleigh store after almost a year of trying to survive in a mostly empty building.

The shop, which caters to lesbian, gay and transgender customers, sells books, DVDs, gifts and other items. White Rabbit has been open in downtown Raleigh for more than 22 years, mostly on Martin Street. In January, the store moved to a new location on West Hargett Street, just below the new residential development Hue.

Along with the slow economy, the move to an empty building was a fatal mistake, said owner Jim Yarbrough

It's been nearly two weeks since the failed downtown Raleigh condo project Hue was sold and converted to rental apartments.

The new owner, Mid-America Apartment Communities, said today that 11 people have signed leases and four people have moved in to the building.

Jackie Melnick, a senior vice president with Memphis-based Mid-America, said 65 prospective renters have taken tours of the 208-unit building since it was reopened.

"We had no advertising or any collateral out in the market to tell people that it was going to be an apartment community," she said. "[The early response has] exceeded our expectations."

Mid-America hopes to have Hue fully leased within 12 months, Melnick said.

A Memphis real estate investment trust has bought the Hue condo building in downtown Raleigh for $33.6 million.

The buyer, Mid-America Apartment Communities, plans to turn the 208-unit project into rental apartments.

The new pricing sheets for the Hue says a two bedroom, 1,337 square foot apartment will rent for $2300 a month.

Mid-America owns four other apartment communities in the Triangle: Hermitage at Beechtree and Waterford Forest in Cary and the Preserve at Brier Creek and the Providence at Brier Creek in Raleigh.

The Hue shut its sales office in May without selling a single unit. Two weeks later the property was handed over to the lender.

The price Mid-America paid is impressive considering the company’s plans to convert the project to rentals.

The Charlotte and Raleigh offices of CB Richard Ellis brokered the deal.

Henry Cisneros, executive chairman of the developer behind Hue, said in a message late Wednesday that the downtown Raleigh condo project was the victim of a brutal housing market.

"I had great hopes for that community," said Cisneros, who founded CityView in 2000 after serving as President Bill Clinton's secretary of housing and urban development.

"Just very difficult in this economy to sell housing units in downtown Raleigh. We tried everything we possibly could, finding all sorts of ways to support the buyers. We just couldn't move them. Just couldn't move them."

Hue closed its sales office two weeks ago and CityView handed over the property to its lender on Thursday to avoid foreclosure.
 

Among the many questions hanging over Hue now that it has shut its sales office is what is the project's status with its lender.

CityView, the Los Angeles group that developed the project along with Trammell Crow Residential, took out a $36 million construction loan from iStar Financial to build Hue.

The date of the loan is August 2007.

Many projects these days are finding it difficult to replace their construction loan with permanent financing because the value of their property has fallen.

If the amount of permanent financing they are able to put on the property is less than the construction loan, then the developer will need to put in more equity or negotiate with the lender to get the maturation date of the construction loan extended.

Construction loans vary in length, from 3 years to 5 years to longer. The terms of CityView's loan with iStar are not detailed in property records.  

CityView officials and Hue's sales manager have yet to return calls seeking comment on the future of the project.

CityView currently manages multiple investment funds and its investors include pension funds, the city of Los Angeles and J.P. Morgan.

CityView has invested more than $2 billion in more than 20 metropolitan areas in 13 states.

iStar is publicly traded real estate investment trust. The REIT's shares dropped to as low as $2.43 last fall but have since recovered to above $6 a share.

Hue, the empty multicolor condo building at Dawson and Hargett streets in downtown Raleigh, is closed until further notice.

Signs announcing the closure are posted on the building's doors. An answering machine message at the Hue's sales office also says it is closed.

None of Hue's 208 units have sold, according to property records.

After a lengthy reservation period that left some prospective buyers wondering what was going on, Hue finally began selling units in January.

The project, which was developed by the Los Angeles company CityView along with Trammell Crow Residential, has been trying to qualify for government-back mortgage insurance programs to help with sales.

The project's application to be eligible for the Federal Housing Administration mortgage insurance program is pending. Such approvals typically require at least half the units in a building be presold, but Hue was seeking a waiver.

Calls to CityView and John Butler, the sales manager for Hue, were not immediately returned.

Condo sales in downtown Raleigh have slowed to a crawl as lending has tightened and demand for the units has dropped.

After a lengthy reservation period that left some prospective buyers wondering what was going on, Hue, the multicolor condo building at Dawson and Hargett streets in downtown Raleigh, has begun selling units.

John Butler, president of new home sales for Prudential York Simpson Underwood Realty and sales manager for Hue, said selling began Jan. 17 for the building's 208 units.

Hue is giving buyers the option of signing a contract and living in, and leasing, a unit until the building reaches the pre-sale requirement for the Federal Housing Administration mortgage insurance program.

Butler said he didn't know the exact number of units currently under contract.

"We're definitely in the neighborhood of eight to ten," he said.

Highwoods Properties announced today it has sold its 100th condominium in RBC Plaza, its downtown Raleigh tower.

The real estate investment trust has sold nine condos since it announced its third quarter results at the end of October.

RBC Plaza has a total of 139 residential condos in addition to 292,000 square feet of office and retail space.

Highwoods partnered with Dominion Realty to build the condos atop RBC Plaza. Sales stalled when the economy and the housing market went south.

All but two were under contract by the middle of 2007. But when the building opened in 2008 more than one-third of the contracts had been delayed or canceled.

The sluggish market for downtown Raleigh condos has also snared The Hue, which was expected to begin offering a rent-to-own, or deferred ownership structure soon.

Representatives of CityView, one of the developers behind the 208-unit condo building at the corner of Dawson and Hargett streets, have not responded to requests for an update on the project's status.

The condo building's Web site has a media release dated Jan. 4 that says units are available for purchase and buyers can move in in February.

Trammell Crow Residential will close its Raleigh office within the next four to six months as it consolidates its offices across the country.

Tom Barker, senior managing director for the Raleigh office, said the company's Atlanta and Washington D.C. offices will handle the company's business in the Triangle once the office closes.

"Going forward, the company sees that they can only really be in about the top eight markets in the country in terms of size," Barker said. "Which is I guess a sign of the times, a sign of financing."

Barker said TCR will continue to be partners in the three active projects it has in the Triangle.

One those projects, the Hue condo building in downtown Raleigh, could begin offering a rent-to-own option to prospective buyers as early as next week, he said.