Archive for Raleigh
Vitus Enterprises has purchased two Class A office buildings in Raleigh totaling 48,000 square feet in a sale-leaseback transaction. Vitus purchased the facilities, located at 6870 and 6880 Perry Creek Road in Raleigh’s Highway 1/ Capital Boulevard office submarket, for $6.2 million. The seller, SST, and Thompkins Associates will occupy one of the buildings, and Vitus will occupy the second facility at a reduced rental rate. Sam DiFranco and Sam DiFranco Jr. of Trinity Partners represented the buyer in the sale-leaseback transaction. York Properties represented the seller.
The center is located at the intersection of Lead Mine Road and Sawmill Road. Anchored by a 35,700 square foot Food Lion, with other tenants including City of Raleigh Parks and Recreation, Sawmill Tap Room and Gonza’s Restaurant. he asking rent for the 1,671 square foot vacant shop is $14,00 per square foot.
Rob Carter, Alex Quarrier, and David Webb of Berkeley Capital Advisors arranged the transaction.
Carey Watermark Investors Incorporated (CWI) announced that it has acquired Raleigh Marriott City Center, a premier full service hotel located in downtown Raleigh, North Carolina. The 400-room, 17-story hotel opened in 2008 in conjunction with the opening of the 500,000 square foot Raleigh Convention Center. The Convention Center was developed by the city in the heart of the Fayetteville Street District in order to attract convention and meeting business and according to the city has generated significant economic activity in the downtown core and greaterRaleigh area.
CWI’s total investment in the property is approximately $89 million, including an $83 million purchase price and $6 million of planned capital improvements and other acquisition–related costs. The investment was financed with $51.5 million of debt. The hotel will continue to be managed by Interstate Hotels & Resorts.
Faris Lee investments has brokered the approximately $7.3 million ground-lease-sale of a triple net-leased property occupied by Kohl’s in Apex. Built in 2007, the 101,360-square-foot property is situated on nearly 10 acres at 1301 Beaver Creek Commons Drive. Kohl’s has 15 years remaining on its lease. Matt Mousavi and Jeff Conover of Faris Lee Investments represented both the buyer, Los Angeles-based Rhyal Apex LLC, and seller, Kentucky-based First Capital Realty Ltd., which was also the developer of the property.
The asking price was approximately $7,500,000 with an asking cap rate of 6.15% according to this Loopnet Listing.
Carter Validus Mission Critical REIT has purchased a data center property in Raleigh, North Carolina, for US$19.5m. The multi-tenant facility is located near Raleigh-Durham International Airport in Morrisville, N.C.
The data center, originally constructed in 1997, is 100% occupied by four tenants. The purpose-built facility is situated on 12.26 acres and totals 143,770 sq ft.
John Carter, CEO of Carter Validus, said, “Given the property’s desirable location and long term leases with high-quality tenants, we believe that the Raleigh Data Center is a great addition to our growing portfolio of mission critical real estate.”
One of the facility’s tenants is data center services provider Peak 10, according to Charlotte Business Journal.
Continental Capital Management has acquired a three-story, Class A office building at 1500 Sunday Dr. in Raleigh for $8.3 million. Built in 2000, the 61,412-square-foot property is located near PNC Center and Carter Finley Stadium. The building is 97 percent leased. Tenants include Hughes, Pittman & Gupton and First Point Management Resources. J. Scott Adams, Ben Kilgore and Brian Carr of CBRE’s Raleigh office represented the seller, CBL & Associates, in the transaction.
The new construction boom in the Triangle is well underway with over 9,200 units currently under construction and another 6,300 units proposed to be built. The apartment market remains very healthy despite the number of units under construction. The average vacancy rate is now 5.5%, which is the lowest rate reported since 1998.
The average rental rate for an apartment in the Triangle is now $868 per month. New apartments still in lease-up continue to command the highest average rent at more than $1,400 per month, while older apartments that are more than 30 years in age rent for less than $700 per month on average.
The outlook remains bright for the Triangle apartment market. As the wave of new supply begins to come on line later this year and throughout 2014, we expect to see a modest pull back in occupancies.
DDR Corp. has purchased two retail centers in North Carolina, totaling approximately 1.3 million square feet, for a combined purchase price of $151 million. The company bought the 852,000-square-foot Carolina Pavilion in Charlotte from Blackstone Real Estate Partners VII for $106 million. The center is 94 percent leased and anchors include Target, Kohl’s, Nordstrom Rack, Ross Dress for Less, Bed Bath & Beyond and AMC Theatres. Recent leases with PetSmart and Golfsmith will soon fill 85,000 square feet of currently vacant space at the center.
DDR Corp. also acquired Poyner Place, a 434,000-square-foot retail property in Raleigh, for $45 million. Tenants for the 96 percent leased center include Target, Ross Dress for Less, Old Navy, World Market, Shoe Carnival and Pier 1 Imports. Both transactions closed in late December 2012.
Beachwood, Ohio-based DDR Corp. is a self-managed REIT that owns and manages 459 centers totaling 116 million square feet in 39 states, Puerto Rico and Brazil.
Inland American Communities (IAC), a wholly owned subsidiary of Inland American Real Estate Trust, Inc. (Inland American), today announced the company’s acquisition of two fully-developed student housing properties, The Retreats, from Landmark Properties for $94.6 million. The two properties, located in Florida and North Carolina, contain a total of 1,264 beds with premier amenities such as resort style swimming pools with movie screens, basketball courts, tanning beds, game rooms, grilling areas and sand volleyball courts.
The North Carolina property is The Retreat in Raleigh, NC - North Carolina State University
Located 2.5 miles from North Carolina State University, the largest university in North Carolina with a total enrollment of 34,767 students, The Retreat contains 554 beds with a 9,000-square-foot club house with a catering kitchen, pool tables, foosball and flat screen TVs. In addition, the property offers 557 parking spaces for residents and their guests. The Retreat is 93 percent leased for the 2012 – 2013 school year.
National rent growth from May to June was 0.52 percent, compared to 0.76 percent for those months in 2011. Axiometrics cites weak job growth as the reason.
“We will soon know if this is just a one-month blip or if it looks like there will be further softening in the second half of the year, though by historical standards we are still in a strong effective rent growth market,” said Jay Denton, vice president of research for Axiometrics. “Multiple scenarios could play out over the coming months, leading to end-of-year growth rates anywhere from just under 4 percent to as high as 4.7 percent. Much depends on job growth, as well as on new unit deliveries, which are really starting to ramp up.”
Palatine Capital Partners has sold the 345-unit Beech Lake Apartment complex in Durham, NC to a joint-venture between Westdale Properties and Lubert-Adler for $19.7 million.
Palatine acquired Beech Lake for $15,600,000 in September 2009 through a joint-venture with Somerset Partners.
“We substantially improved Beech Lake’s physical condition, and were able to grow rents by more than 11% during our hold period,” said Alex Hurst, founder and Managing Partner of Palatine Capital Partners in a statement. “We are actively looking to expand our apartment portfolio, with a particular focus on ground-up development in the Southeast and mid-rise properties across the country.”
The Rams Plaza shopping center property in Chapel Hill has been sold to a trio of investors from Charlotte, New York and Florida that plan to make at least $1.5 million in renovations and improvements to the aging property.
The Kalikow Group of Westbury, N.Y., through a newly formed joint venture partnership with Argus Properties of Miami, paid $13.25 million for Rams Plaza to the property’s former owner, Madison Marquette of Washington, D.C.
Madison Marquette had paid $13.1 million for the property in 2007 in a deal that also included the purchase of the University Mall property in Chapel Hill. Rams Plaza was built in 1982 at 1728 Fordham Blvd., and is anchored by a Food Lion grocery store, the Bailey’s Pub restaurant and a CVS pharmacy store. The property has 113,557 square feet of space and was 94 percent occupied in the third quarter, according to Triangle Business Journal’s quarterly Space survey.
Arco Commons, a shadow-anchored strip center located at the corner of Highway 70 and Brier Creek Parkway in the Brier Creek Commons Shopping Center in Raleigh, has sold for $4.2 million to an undisclosed buyer. Brier Creek Commons Shopping Center includes tenants such as Dicks Sporting Goods, Target, BJ’s Wholesale, Barnes and Noble, and Ross Dress for Less. Arco Commons is fully leased to AT&T, Jimmy John’s and Mattress Firm on long-term corporate leases. Joe Graham of CBRE-Raleigh’s investment properties group represented the buyer.
Kimco Realty Inc. of New Hyde Park, N.Y., purchased the 132,400-square-foot center from an affiliate of Hawthorne Retail Partners of Charlotte. Brennan Station is located at 8111 Creedmoor Road in Raleigh.
Hawthorne also sold a Harris Teeter-anchored shopping center in Cornelius to Kimco as part of the same transaction, according to Hawthorne spokesman Shoffner Allison. The two deals totaled $42.7 million.
Hawthorne had purchased the Brennan Station center in 2007 for $19.5 million, according to Wake County deed records. The company also completed a substantial renovation and retenanting of the shopping center, which was 96 percent occupied at the time of the property sale to Kimco.
Investor interest in Raleigh-Durham continues to heat up, as the area cements its reign as one of the hottest secondary markets in the nation.
The cap rate compression in primary markets has fully trickled down to less densely populated areas like the “Research Triangle,” the tech-heavy region anchored by North Carolina State University, Duke University, UNC-Chapel Hill, and the cities of Raleigh, Durham, and Chapel Hill.
Since the beginning of the year, at least five multifamily sales in Raleigh-Durham registered cap rates of 6 percent or less. “It’s amazing that we’re seeing cap rates in the low-5 percent range again,” says Dan Fasulo, managing director of New York-based market research firm Real Capital Analytics.
But investors active in the market aren’t quite as amazed by the swift rebound in values. A combination of rapidly improving fundamentals and very low-cost debt is helping to make those low cap rates pencil out in Raleigh-Durham.