A nearly 16-acre slice of land wedged between Raleigh's Village District and the historic Hayes Barton neighborhood could soon change hands for the first time in decades. The site, the old Rex Hospital property at 700 Wade Avenue, has been under state control since 1981, and a new law is now pushing North Carolina to finally decide its fate.
The push traces back to a law passed last year that mandates the Division of Employment Security, which currently occupies the old hospital building, move to a new office by April 2027, according to Axios. That legislation, Session Law 2025-97, also calls for the state to find a partner to redevelop the site or sell it outright. The North Carolina Department of Commerce, which houses the Division of Employment Security, has already found the agency space in a building off Capital Boulevard.
Lee Lilley, who is quoted in the Axios report, put it bluntly: “Old Rex Hospital is just that: old. It is time to get out.” Lilley also said the relocation is an investment in the agency's team and their work environment, according to the same account.
A Rare Parcel Inside the Beltline
The old Rex Hospital property is described as a rare property of its size inside the Beltline, and real estate experts previously told the outlet that the land will likely attract substantial buyer attention once it formally hits the market. Wake County records list the site's assessed value at $58.3 million. The state could sell the property as early as next year, per the Axios report.
The site's location adds to its appeal and its complexity. It sits between the Village District's commercial corridor and the affluent, historically preserved Hayes Barton neighborhood, a combination that makes high-density development both commercially lucrative and politically sensitive, as the outlet's reporting on the property notes.
Zoning could shape what comes next. The parcel currently carries an Office Mixed Use 5-stories designation, which caps building height and density unless a developer seeks a rezoning from the city, according to DTRaleigh Community. Notably, parcels just across Wade Avenue already carry zoning that permits up to seven stories, the same forum notes.
From Art Deco Hospital to State Offices
The building itself has a long history. It opened in 1937 as Raleigh's main Art Deco general hospital and served patients until 1980, when Rex Hospital relocated to Lake Boone Trail, according to a Facebook post detailing the site's history. The state took control of the campus the following year, and it has remained in state hands ever since.
Part of a Broader State Land Sell-Off
The potential Rex Hospital sale fits into a larger pattern of North Carolina shedding unneeded or high-maintenance real estate around Raleigh. The city of Raleigh bought the former Dix Hospital campus and turned it into Dix Park, and it separately purchased the former DMV headquarters on New Bern Avenue, both moves that kept major surplus state land under public control.
State government also still owns five historic houses in Raleigh's Oakwood neighborhood, some of which are used for storage today, per The Mary Renault Society. Those Oakwood properties are widely described as underutilized, and some residents and legislators want them sold, WUNC has reported. Raleigh, for its part, is still deciding how to redevelop the old DMV property it acquired.
Any sale of the old Rex Hospital site will not move quickly or quietly. State law requires that once the State Property Office accepts a purchase offer exceeding $25,000, the transaction must be reported to the Joint Legislative Commission on Governmental Operations before the Council of State, which includes the governor and other elected executive officers, gives final approval. That review process, paired with the site's sensitive location between two very different Raleigh districts, means the next chapter for the old Art Deco hospital will likely be closely watched.
