The company that created the popular “Fortnite” video game has agreed to buy a mall in North Carolina and plans to rebuild it as a global headquarters, the latest sign that struggling malls are evolving into new types of real estate.
Epic Games Inc., a privately held company based in Cary, NC, said it is planning to convert the 980,000 square foot Cary Towne Center mall into offices and recreation space for its long-term growth. Epic plans to open the new campus by 2024, which would represent a major upgrade to the company’s 250,000 square foot headquarters.
Office acquisition and expansion plans show that while many companies aim to reduce office space and adopt work at home policies, others still see a new, larger office as a big part of the future.
Epic said it was too early to offer details about the new headquarters. Although the company says it has no plans to build a venue for video game tournaments at the new headquarters, it is considering including a venue for use by the local community.
The company is growing rapidly, hiring more people and wants to stay in Cary, said Elka Looks, communications director at Epic Games. “Much of our work is highly collaborative and we want to give employees the ability to use an office when it is safe,” she said.
Epic’s acquisition plan also shows how many underperforming malls have become attractive acquisition targets for investors looking to convert them to other uses, from offices to residential units or warehouses.
In West Los Angeles, California, a 600,000-square-foot mall, the Westside Pavilion, is undergoing a renovation of an office campus that will be occupied by Google. New York-based Urban Edge Properties said this week that it bought Sunrise Mall in Massapequa, NY, and plans to rebuild it for industrial purposes.
Epic agreed to pay $ 95 million for the North Carolina property, which was built in 1974. Cary Towne Center has had tenants like Dillard’s and JC Penney, who have closed their stores in recent years.
Turnbridge Equities and Denali Properties of New York bought the Cary Towne Center in January 2019. The mall was 65% busy at the time and developers initially planned to remodel the space in a mixed-use complex with homes and offices, retail and hotels.
Epic’s “Fortnite” is a multiplayer game that has attracted hundreds of millions of people worldwide and is particularly popular with high school students. It is one of the most popular electronic sports, and the arenas that allow thousands of game fans to view this type of video content in person have been a bright spot in the commercial real estate market. Shopping center owners, stadium operators and hoteliers have attracted young players to live events, which in turn helps to keep their properties relevant.
Write to Esther Fung at [email protected]
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Published in the January 6, 2021 print edition as’ ‘Fortnite,’ ‘the designer plans to buy a mall for his new headquarters.’