- 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.
- Visit Business Insider's homepage for more stories.
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 deal speaks to the company's ambitious growth plans despite a major rift with Silicon Valley. Last 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, skirting the fees normally levied by the tech companies.
Immediately afterward, Epic launched a lawsuit against both, challenging the game's expulsion. The cases are ongoing and hold major implications for Epic's business, potentially cutting off its marquee game from billions of devices around the globe.
In announcing the new headquarters project, Epic appears unbowed by the standoff, imagining dramatic growth for its operations.
Read more: The billionaire behind 'Fortnite' repeatedly compared his company's battle with Apple to the struggle for civil rights, and said the fight is 'an act of civil disobedience'.
The company purchased the 87-acre Cary Towne Center, a nearly one million-square-foot failed mall that was acquired two years ago by developers Turnbridge Equities and Denali Properties from CBL Properties, a publicly owned mall landlord that filed for bankruptcy in November.
Turnbridge and Denali steered the property through a 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 would not reveal whether it had hired an architect, how large the development would be, nor if Epic would seek to complete the project in phases to allow the company to grow into the additional space. The project has the potential to be vastly larger than Epic's present headquarters, which is located a short distance away in Cary 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."
Read more: 'Fortnite' maker Epic Games just set an antitrust trap for Apple, and Tim Cook walked right into it.
Cary's 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 that Epic will break ground on the project this year and anticipates 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. After the Cary Towne Center lost anchor tenants in the form of Sears, Macy's, and JC Penney's, Turnbridge and Denali cleared out much of the property's remaining stores and were to begin razing it next month with plans to build a mix of office, residential, retail, and hotel space on the sprawling site.
Instead, the group was approached preemptively by Epic to purchase the site for $95 million, 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," said Jason Davis, a managing director at Turnbridge. "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."
Have a tip? Contact Daniel Geiger at [email protected] or via encrypted messaging app Signal at +1 (646) 352-2884, or Twitter DM at @dangeiger79. You can also contact Business Insider securely via SecureDrop.
Get the latest Google stock price here.
Source: Read Full Article