The company that created the popular video game “Fortnite” has agreed to acquire a mall in North Carolina and plans to redevelop it as a global headquarters. This is the latest sign that struggling shopping malls are developing into new types of real estate.
Epic Games Inc., the now-established company in Cary, NC, said it plans to transform the 980,000-square-foot Cary Towne Center shopping center into offices and recreational space for its long-term growth. Epic plans to open the new campus by 2024, which will be a significant upgrade of the 250,000-square-foot headquarters.
The acquisition and office expansion plans show that even as many companies aim to reduce office space and adopt work-from-home policies, others still see a new and larger office space as a big part of the future.
Epic said it was still too early to provide details on the new headquarters. Although the firm said it does not intend to build a space for video game tournaments at the new headquarters, it said it is considering including space for the local community.
The company is growing rapidly, hiring more people and wanting to stay in Cary, says Elka Looks, communications director at Epic Games. “A lot of us work a lot together, and we want to give employees the opportunity to use an office if it’s safe to do so,” she said.
Epic’s acquisition plan also shows how many underperforming shopping malls have become attractive acquisition targets for investors looking to convert them to other uses, from office space to residential units or warehouses.
In West Los Angeles, California, a 600,000-square-foot mall, the Westside Pavilion, is building an office that will be occupied by Google. New York-based Urban Edge Properties said this week that Sunrise Mall in Massapequa, NY, is being purchased and plans to redevelop it for industrial purposes.
Epic has agreed to pay $ 95 million for the 1974 property in North Carolina. Cary Towne Center once had tenants like Dillard’s and JC Penney, who have closed their stores over the past few years.
The New York-based Turnbridge Equities and Denali Properties, based in Dallas, acquired Cary Towne Center in January 2019. The mall was 65% occupied at the time and the developers initially planned to redevelop the space into a mixed-use complex with residential office, retail and hotel uses.
Epic’s “Fortnite” is a multiplayer game that has attracted hundreds of millions of people around the world, and is especially popular with high school students. It is one of the most popular esports, and arenas with which thousands of game fans can personally watch this type of video content have been a highlight in commercial real estate. Shopping center owners, stadium operators and hotel leaders have attracted young players to live events, which in turn helps keep their properties relevant.
Write to Esther Fung by [email protected]
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On January 6, 2021, the print edition will appear as ” Fortnite ‘Creator Plans to Buy Mall for Its New Headquarters.’