By Adam Powell
CHAPEL HILL – Nearly three and a half years after the COVID-19 pandemic, the country is facing what may be called the beginning of an office space crisis. With many Americans deciding to pursue only work-from-home opportunities, and many others choosing not to return to the workforce at all, the United States is suddenly flooded with unused commercial real estate.
According to, a business research entity, the United States has almost 1 billion square feet of empty office space. If stacked on top of itself as a single office, the space would include almost 48,000 empty floors.
Although the effects of the COVID-19 fueled workspace displacement are more significantly felt in places like San Francisco and Washington, D.C., the trend also affects Chapel Hill.
Despite efforts before the pandemic to bring what was thought at the time to be much-needed commercial and retail space to Chapel Hill, one local developer is also feeling the effects of the office space exodus.
Back in 2019, Chapel Hill and Orange County approved a $2.2 million incentives package with Grubb Properties to expand its Glen Lennox community. Although Glen Lennox had been a staple of residential life in Chapel Hill since the 1950s, Grubb Properties began expanding the community at Fordham Drive and Highway 54 in the mid-1980s.
At the time, before the pandemic was even a thought, the deal seemed to make a lot of sense to the town. Although Orange County, and Chapel Hill in particular, had been reluctant throughout the early 2000s to provide economic incentives, the area watched on as Alamance County constructed Tanger Outlets just on the other side of its borders, and as the Durham and Raleigh areas exploded with new commercial and retail spaces for its residents.
The $2.2 million provided by Chapel Hill to Grubb Properties in incentives came in the form of a grant, essentially a rebate for what the developer would have paid Chapel Hill in local taxes from the years 2021 to 2026.
The economic incentives provided by Chapel Hill to Grubb Properties were intended not only to stimulate the Glen Lennox area (an important strategic location adjacent to Highways 54 and 15-501) but also to promote business development in Chapel Hill.
According to Chapel Hill Economic Development Director Dwight Bassett, Chapel Hill produced virtually no new office space construction between the years 2010 and 2017. The Research Triangle Park region was in the midst of a tremendous commercial real estate boom, with nearly 5 million square feet of real estate constructed between 2018 and 2020, according to the Durham Herald-Sun.
Even as Chapel Hill was considering the $2.2 million in economic incentives for Grubb Properties back in the late spring of 2019, Grubb Properties CEO Clay Grubb indicated that that company would have to pre-lease enough space to secure the necessary bank financing for various elements of the project.
Grubb Properties received a $50.6 million construction loan for its 304-apartment multi-family community, which will be known as “Link Apartments Calyx.” This seven-story, 305,000-square-foot project, located at 9 Lanark Road, will include one-bedroom units totaling 700 square feet, and two-bedroom units totaling 1,027 square feet. Tenants are expected to begin moving into the building in the coming months.
In the late spring of 2020, during the height of the pandemic, construction began in earnest on the project’s first phase. The Gwendolyn is a 106,000-square-foot office building located at 101 Glen Lennox Drive, Suite 300.
The building, named after Gwendolyn Harrison, the first African-American woman to attend UNC-Chapel Hill, was just the third office building constructed in Chapel Hill in the past 12 years.
Efforts were made to reduce The Gwendolyn’s carbon footprint over time, such as installing special HVAC systems to meet LEED energy standards. A specific effort was also made to incorporate walking and biking options and green space into the project.
Grubb Properties began Phase Two of the project in the summer of 2021, as the company completed work on an 18-acre mixed-use district broken up into eight city blocks. The second phase included multi-family construction of approximately 650 housing units, along with approximately 90,000 square feet in retail space, 275,000 square feet of office space, and a 150-room hotel along Highway 54. This year, additional work has taken place to realign a portion of Maxwell Road.
But despite all the hoopla – and all the incentives – The Gwendolyn has proven to be difficult to get occupied for Grubb Properties. At the present time, more than half of The Gwendolyn’s available office space is sitting vacant.
An August 23 search of available office space in The Gwendolyn revealed eight current vacancies within the building, encompassing three floors and nearly 58,000 square feet of the building’s total square footage of 106,000 square feet. Available space on the first two floors alone totals more than 31,000 available square feet. A fourth-floor area totaling 26,519 square feet is also available. All leases are currently listed as “negotiable,” with immediate start dates.
Adam Powell is a reporter on local news and sports and an education communications professional. A 2001 graduate of UNC-Chapel Hill, Powell has served as managing editor of multiple local publications, including the Mebane Enterprise, News of Orange County and TarHeelIllustrated.com. The public information officer for Rockingham County Schools in Eden, N.C., Powell is the author of four books and lives in Mebane with his wife and two children.