Wesley Village Fetches $45.8M

By Eliza Theiss, Associate Editor

KBS Legacy Partners Apartment REIT has announced the purchase of Wesley Village for an estimated price of $45.8 million. “The KBS Legacy Partners team has identified and acquired several well-performing assets with solid growth potential, and Wesley Village is no exception,” declared chief executive officer of KBS Legacy Partners Apartment REIT, W. Dean Henry. “We are excited about the opportunity to own a quality asset in a city that continues to show strength and stability.”

Located at 2715 Wet Stone Way, Wesley Village sprawls on 14.8 acres near Highway 27 and Interstates 77 and 277, five miles west of Charlotte Douglas International Airport. The 301-unit high-end apartment community was constructed in 2009 and features 33 floor plans.

Community amenities include a 10,000-square-foot clubhouse, yoga studio, 24-hour club grade fitness center, resident gaming center equipped with Wii and Xbox 360, billiards room, Starbucks Java Bar and resident business center. The courtyard features a saltwater swimming pool with poolside cabanas, as well as a wet bar, custom grilling station, outdoor fireplace and conversation area.

The controlled access community has a valet trash service program and community recycling center, and ccess is provided to the Stewart Creek Greenway. Furthermore, the community offers a mountain bike check-out program and bark park. Elevators and WiFi access are also provided, as is an onsite guest suite.

The apartment complex features 33 unique floor plans, according to a press release. Apartments feature nine- to 20-foot ceilings, over-sized bedrooms, over-sized windows with plantation blinds, large walk-in closets, private terraces, sunroofs, European kitchens with stainless steel appliances, granite countertops/island kitchens, washers and dryers. Urban lofts and over-sized master suites can also be found, as well as garages and the possibility for extra storage.

The apartment complex was 93 percent occupied at the time of sale.  

Newport Beach, Calif.-based KBS Legacy Partners Apartment REIT is a joint venture sponsored by KBS Capital Advisors LLC (KBS-CA) and Legacy Partners Residential Realty LLC (LPRR) of Foster City, Calif. The purchase of Wesley Village brings the non-traded real estate investment trust’s portfolio to 1,752 units.

For further market data on Charlotte, click here.

Photo courtesy of Wesley Village Apartments’ Facebook page

Chart courtesy of Marcus & Millichap

Parkway Properties Picks Up NASCAR Plaza for $100M

By Eliza Theiss, Associate Editor

Orlando, Fla.-based Parkway Properties has announced entering a purchase and sale agreement for the acquisition of NASCAR Plaza, a 395,000-square-foot office tower in Charlotte’s central business district. Parkway Properties will be purchasing the marquee office tower from a joint venture between Trinity Capital Advisors and Rubenstein Partners for an estimated $100 million.

Located at 550 South Caldwell St., the 20-story, 395,000-square-foot Class A office tower is a landmark of Charlotte’s downtown area.  NASCAR Plaza opened in May 2009 next to the NASCAR Hall of Fame, developed by Indianapolis-based Lauth Group Inc. Among the tower’s amenities is a state-of-the-art fitness center featuring Cybex and Expresso Interactive Cardio equipment, as well as a full-service sundries shop offering Starbucks coffee, grab-and-go lunches and dry cleaning.

One of the most attractive features of NASCAR Plaza is its LEED Silver certification. One-third of the office tower was manufactured using recycled materials and is equipped with energy-efficient air conditioning that does not employ CFC refrigerants or any other chemicals for cooling. Furthermore, during development, 75 percent of construction waste was diverted from landfills. NASCAR Plaza is also resource efficient: 35 percent of its electricity is provided by renewable resources, and it uses 30 percent less water than a conventional office building.

NASCAR Plaza was created by Pei Cobb Freed & Partners. The property is currently 88 percent leased, with an average rent of $25.61 per square foot. Its tenant roster includes Chiquita Brands International, while the NASCAR headquarters takes up 139,000 square feet leased through May 2012.

“The purchase of NASCAR Plaza represents another off-market transaction that enables us to expand in one of our key target submarkets with a high-quality asset,” declared Parkway Properties President and CEO James R. Heistand.  “NASCAR Plaza has a strong tenant base and is the headquarters for several well-known companies, and we expect to create additional value through leasing and rent growth in a submarket that we believe will outperform during a recovery.”

The office tower is expected to generate an estimated 7 percent cash net operating income yield in 2013. Taking full ownership of the property, Parkway will also assume the first mortgage by the estate with the intent of amending and restating the loan to current market rates from its current outstanding balance of $42.3 million, 4.7 percent interest rate and maturity date of March 30, 2016.

Parkway will fund its share of equity with excess cash and borrowings from its revolving credit facility. Closing is expected by the end of 2012.

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Photo courtesy of GoogleMaps

Chart courtesy of Marcus & Millichap

$25M Science Center Breaks Ground at Johnson C. Smith University

By Eliza Theiss, Associate Editor

As Charlotte continues to grow, so do its educational facilities. A prime example of this is Johnson C. Smith University, which has just broken ground on a new 62,000-square-foot science center. The project is funded by a $25 million Duke Endowment grant.

The new facility will be located on campus between the James B. Duke Memorial Library and the Jane M. Smith Memorial Church, and at three stories tall and 62,000 square feet in surface area, it will be the largest building on campus. The science center will house a 250-seat lecture hall/auditorium, a common atrium, teaching labs and offices. Gantt Huberman Architects are responsible for the design.

In a press release, Dr. Ronald L. Carter declared: “The JCSU leadership has worked for months with architects to create an optimal learning environment for interaction among students, faculty and visitors.”

Programs to be housed in the new teaching facility will be part of the College of Science, Technology, Engineering and Mathematics (STEM) and will include electronics, cyber security, robotics, medical and bioinformatics, renewable energy and homeland security, analytics, and bioinformatics.  Thanks to the facility’s size, the university will be able to increase admission numbers from 300 to 450 students by 2016.

Furthermore, the center will also be available for community uses such as STEM summer camps, think tanks, training and mentoring.

The Science Center is the university’s second major expansion project this month after the early October inauguration of the $25 million Mosaic Village student housing in Charlotte’s historic West End neighborhood.

Located at 1635 West Trade St., the 124,000-square-foot building contains 80 apartment-style units designed to house 300 students, as well 7,500 square-feet of street-level retail space and a parking garage. Units rage from two-bedroomers to four- and five-bedroom apartments and are fully furnished.

Some of the amenities available onsite include in-suite washer/dryers, in-suite kitchens, study rooms, gym facilities and sitting areas, as well as a rooftop garden with sweeping views of Uptown Charlotte. The retail space comprises a convenience store, an express restaurant and a barber shop.

Mosaic Village was funded by a public-private partnership between Johnson C. Smith University, the City of Charlotte and the Griffin Family of Griffin Brothers Tires Inc. Founded in 1867, Johnson C. Smith University integrates liberal arts with science, technology and business studies in 23 fields of studies offered to over 1,600 students.

For more Charlotte market data, click here.

Photo credit:  Johnson C. Smith University’s Facebook page

Two Major Retail Projects in Works for Charlotte Metro

By Eliza Theiss, Associate Editor

It seems this was the week to announce significant retail development for greater Charlotte, with not one, but two important players of the retail industry expressing their intent to build in the Queen City. Tanger Factory Outlet Centers Inc. was the first to make its announcement, stating that it plans to construct a dynamic 90-store outlet center.

Tanger Outlet Center Charlotte will be located eight miles southwest of uptown Charlotte at the interchange of I-485 and Steele Creek Road (NC Highway 160). The outlet center will have a total surface area of 350,000 square feet, with plans of a 50,000-square-foot future expansion. The store will be home to over 90 designer and brand name stores, offering value priced merchandise directly from manufacturers.

“This project represents an approximately $80 million investment by Tanger in the growing Charlotte community and the great state of North Carolina,” declared Steven B. Tanger, president and CEO of Tanger Factory Outlet Centers Inc.

Tanger will be developing its newest project in partnership with Childress Klein Properties and Steele Creek Limited Partnershi. The latter is a long-time owner of land in Steele Creek and was founded by local Sarah Belk Gambrell, who will develop ancillary uses in the vicinity of the outlet center. The project will kick off upon receiving the necessary governmental approval and is slated to finish in 2014.

Tanger Outlet Center Charlotte will be the company’s fourth development in North Carolina. The retail center is expected to generate $10 million in annual sales taxes for Mecklenburg County. It will also add 900 full- and part-time jobs upon completion, as well as 300 construction jobs during development. The chosen site for the project, between I-85 and I-77, is located near the Steele Creek community, one of Mecklenburg County’s most rapidly growing residential areas and one of the most highly employed.

The second retail project to be announced was Charlotte Premium Outlets, a development that is the result of a partnership between leading retail real estate company Simon Property Group Inc. and Baltimore-based commercial real estate development firm Paragon Outlet Partners.

The planned 400,000-square-foot project will be home to some 100 designer and brand name stores.  Charlotte Premium Outlets will be located at Interstate 485 and Idlewild Road in Stallings, N.C. The retail center will break ground in spring 2013 and is expected to open in 2014.

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Photo credit: Tanger Factory Outlet Centers, Inc. via PRNewswire

Chart courtesy of Marcus & Millichap

$36.8M Facility to Be Added to North Carolina Data Center Corridor

By Eliza Theiss, Associate Editor

Merely weeks after Apple Inc.’s purchase of 200 acres in Catawba County, N.C. to consolidate its data center operations comes the announcement of another major investment for North Carolina’s growing information technology sector. According to information released by the Catawba County Economic Development Corporation, international retail chain Bed Bath & Beyond Inc. has chosen to establish a data center in Claremont.

The Union, N.J.-headquartered domestics merchandise and home furnishings retailer will locate its data center in the Claremont International Business Park in the 48,000-square-foot Center Point shell building developed by Charlotte-based Niagara Ventures LLC.

“The shell building developed by Niagara Ventures provided a great building option for Bed Bath & Beyond,” said Scott Miller, president of the Catawba County Economic Development Corporation. “This is just another example of when our community has the right product, the business will come.”

Bed Bath & Beyond will invest at least $36.5 million to set up the data center and is expected to employ at least seven by the end of 2018, with salaries above the average annual income for Catawba County.

“The addition of another data center in Catawba County helps solidify our presence as the [North Carolina] Data Center Corridor,” declared Kitty Barnes, chair of the Catawba County Commissioners. “Data centers are attracted to our area for good reasons, such as low-cost electricity, abundant water and existing telecommunications. “

A performance-based grant that will be provided by both the city of Claremont and Catawba County might be another reason. Incentives will be equal to 50 percent of new net taxes received on real estate for 10 years and 60 percent of personal property new net taxes for 10 years, but not exceeding $955,722 when combined.

Founded in 1971, Bed Bath & Beyond Inc. is a publicly traded Fortune 500 and Forbes 2000 company.

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Photo credit: Google Maps

280-Unit Luxury Apartment Complex Breaks Ground

By Eliza Theiss, Associate Editor

A mixed-use luxury apartment complex near Charlotte’s uptown area has recently begun construction. According to a press release, the five-story complex—named Gateway West Apartments—will feature two levels of parking and 8,000 square feet of retail space, atop which 280 luxury apartment units are to be built.

The complex, which is to be constructed on 2.8 acres in the vicinity of Johnson & Wales University, will feature luxury amenities such as a private courtyard, a clubhouse with a  demonstration kitchen and an elevated heated pool offering unobstructed views of Uptown Charlotte. The woodframe building was designed by Charlotte-based Urbana Architecture with additional input provided by Saber Engineering, Trilium Structures and Landworks.

According to Christopher Herman, the regional multifamily leader for the project’s general contractor, Balfour Beatty Construction, Gateway West Apartments will be “a great asset to the city of Charlotte and the Gateway community.”

“We’ve worked hand-in hand with the neighbors to ensure that everything from construction logistics to the design elements fit within the context of the neighborhood,” Herman added.

It is expected that the community’s amenities and its close proximity to the city’s uptown area will make it especially appealing to young professionals. Chris Branch, senior managing director for multifamily for Faison, has said that the complex was designed in a way in which tenants can fully appreciate the lavish views of uptown Charlotte, adding that “Gateway West will set a new standard for uptown living.”

The Charlotte-based, privately-owned Faison and Charlotte-based commercial real estate investment firm Sereo Group Inc. are the project’s developers, while PNC Bank is the lender.

Click here for additional Charlotte market data.

Photo credit: Faison

Chart courtesy of Marcus & Millichap

Apple Continues North Carolina Expansion

By Eliza Theiss, Associate Editor

Apple Inc., the tech giant from California, has made yet another move to expand its North Carolina operations. According to the Hickory Daily Record, the tech company has purchased 200 acres in Conover, Catawba County for $3 million. Apple plans to build another solar farm on the land in a bid to ensure clean, independent, locally produced energy for its Maiden data center.

The 200 acres are a mix of farmland and residential properties. More importantly, the land is double the size of that which Apple initially announced it would be purchasing, leading many to wonder and speculate what the extra 100 acres will be used for.

According to the initial plans posted on the company’s website, “a 100-acre site located a few away miles [from the Maiden data center] will produce another 42 million kWh.” Additionally, the other solar farm built on the 100 acres next to the 500,000-square-foot Maiden data center is almost finished, according to Wired. The solar plant is expected to have an annual energy output of 42 million kilowatt-hours (kWh).

Added up, the two solar installations will produce 84 million kWh of locally generated renewable energy, functioning on a system of high-efficiency solar cells and advanced solar tracking technology. Also, a 5-megawatt bio-gas-powered fuel cell installation, also owned by Apple, is expected to become operational by the end of the year. Combined, the three systems will produce enough energy (124 million kWh) to power 10,874 homes, enough to cover 60 percent of the data center’s energy consumption.

The rest of the energy needed to power the Maiden facility will be purchased from local and regional renewable, clean sources, thus encouraging local investment in such sources.

These projects will make the Maiden data center the most environmentally friendly and sustainable data center ever built, as well the largest private solar array and non-utility fuel cell system in the U.S. It’s the first data center of this scale to earn LEED Platinum certification.

Other green features of the Maiden facility include a white cool-roof providing maximum solar reflectivity, high-efficiency LED lighting paired with motion sensors, a chilled water storage system that transfers energy consumption from peak to off-peak hours and the use of outside air cooling through a waterside economizer operation during night and cool-weather hours, resulting in the chillers operating only 25 percent of the time.

14 percent of construction materials were recycled materials, and 41 percent of materials were sourced from within a 500-mile radius. Additionally, only 7 percent of the construction waste ended up in landfills.

The Maiden data center is essential for Apple’s iCloud services.

Click here for additional Charlotte market data.

Photo credit: Hickory Daily Record’s Facebook page

Third North Carolina Home2Suites Hilton Opens in Charlotte

By Eliza Theiss, Associate Editor

Home2Suites by Hilton has announced the opening of its newest location in Charlotte. The property is the third Home2Suites hotel in the North Carolina market and the eleventh hotel to open under the Home2Suites by Hilton brand, according to a company news release.

The Home2Suites brand targets a younger generation of extended-stay guests and modern business travelers, and such accentuates the importance of flexibility and easy access to technology within a contemporary and comfortable environment. Following the mantra of the brand, the four-story, 89-key Home2Suites Charlotte offers amenities that ensure precisely that.

One of the main features of the brand is the Oasis, a community space where guests can connect, socialize and work. The 4,200-square-foot lounge presents both communal and individual work zones, wireless internet access and a 52-inch flat screen TV. The chain’s signature “Inspired Table” expansive complimentary breakfast is also offered, as well as the Home2 MKT for grab-and-go items.

An indoor saline pool, fitness room, outdoor lounge, patio and grill and an exercise trail ensure guests can relax, while a meeting room further facilitates work. Other hotel amenities include guest laundry and an outdoor area dedicated to animal companions, as Home2Suites is a pet-friendly brand.

Individual suites feature a working wall or media zone decked out with a queen-size sofa/sleeper, 42-inch flat-screen TV, iHome alarm clock, ambient lighting and a roll-around ottoman. Several pieces of furniture in each suite are designed to be moved around so that guest may customize room layouts to their liking. All suites have a fully accessorized kitchen featuring a refrigerator/freezer, dishwasher, microwave oven, coffee maker and place setting for six.

As an environmentally conscious brand, the Home2Suites in Charlotte boasts low-flow showers and faucets, dual-flush toilets, recycled flooring, Energy Star appliances, compact fluorescent light bulbs, biodegradable food trays and carpets and surfaces made from recycled product.

Located at 6025 Tyvola Glen Circle near Interstate 77, the property provides easy access to Charlotte Douglas International Airport, as well as Downtown Charlotte, Arrowood, the Tyvola Business District and local attractions such as Bank of America Stadium, the Charlotte Motor Speedway, Carowinds Theme Park, Time Warner Cable Arena and the U.S. National Whitewater Center.

Home2Suites Charlotte is part of the Home2Suites by Hilton branded and is owned by Tyvola Hospitality. CN Hotels Inc. is the manager and developer of the property.

Click here for additional Charlotte market data.

Photo credit: Home2Suites by Hilton Charlotte’s Facebook page

Preferred Apartment Communities Gets Behind Coliseum Redevelopment; Lofts at Charleston Row Installs Green Roof

By Eliza Theiss, Associate Editor

The redevelopment of the former Coliseum site in West Charlotte just got a jolt from Preferred Apartment Communities Inc. of Maryland—an owner and operator of multifamily properties across the U.S. According to a press release, the company just closed on a mezzanine loan investment to Oxford City Park Development LLC of Georgia. The loan investment is up to $10 million in value and is given to Oxford City Park in connection with its plans to redevelop the former Charlotte Coliseum site.

The Georgia limited liability company’s plans are to construct a 284-unit multifamily community, a development that Preferred Apartment Communities has secured an option to buy in connection with the loan. The purchase can be made for a pre-negotiated $39.9 million between the 39^th and 43^rd months after the closing of the mezzanine loan.

Preferred Apartment Communities Inc. is a real estate investment trust focused primarily on acquiring and operating multifamily properties in over 20 targeted U.S. markets. The company and its affiliates manage over 31,000 multifamily units.

In other multifamily news, The Lofts at Charleston Row—a multifamily community in Charleston’s Ayrsley neighborhood, recently installed the area’s first green roof, reports GoAyrsley.com. The roof is one of the most important design features of the 98-unit apartment community and is located atop the outdoor pavilion.

Green roofs, especially when used on a large scale, improve air quality, reduce the risk of heat trapping in urban areas and are, of course, more visually appealing. Green roofs are usually considered to have a longer lifespan than conventional roofs.

The Lofts at Charleston Row is a three-phase development in Ayrsley, a neighborhood that is considered the uptown of Southwest Charlotte, the city’s second-largest job center. According to the Charlotte Business Journal, after the second and third phases finish construction, the community will total 230 units of one- and two-bedroom apartments, as well as lofts on 8,900 square feet of retail space, at a total cost of $12 million.

New Forum Inc., a leading local provider of sustainable master-planned mixed-use and retirement communities, is one the driving forces behind the project. Overcash Demmitt Architects is responsible for the design, while Concorde Construction is the general contractor for the build.

For additional Charlotte market data, click here.

Photo credit: The Lofts at Charleston Row’s Facebook page

Industrial Developments Abound in Metro Charlotte; $7M Retail Project Breaks Ground

By Eliza Theiss, Associate Editor

Metropolitan Charlotte’s industrial market has been on the rise for some time and shows no sign of slowing down. Recently, Lincoln County’s newest business park got its first resident, reports the Charlotte Business Journal.

Hydac technology Corp., a German manufacturer of hydraulic valves, filters and various other elements, broke ground on the first structure to rise in the small satellite town of Denver, N.C. The German manufacturer now plans to employ 54 at the Airlie Business Park site, located at Optimist Road off N.C. Highway 16. Charlotte-based Hondros & Associates are the chosen contractors for the build.

Another Metro Charlotte business park experiencing expansion and investment is the Statesville Business Park at U.S. 70 and Business Park Drive. Goldsboro-based Pate Dawson Co., a food-service distributor, recently broke ground on a $9 million expansion at its current Statesville Business Park operations, according to The Charlotte Observer.

The expansion, expected to be completed in six months, will increase the existing shell building’s surface from 63,000 square feet to 105,000 square feet. The newly constructed space will serve as a distribution center catering to the company’s business operations in the greater Charlotte area and western Carolinas.

The expansion will create 49 jobs within the first three years. That number will rise to 76 in additional two years. The average annual wage will be $47,000. Future workers will also receive training, where needed, as Pate Dawson is on track to form a partnership with Mitchell Community College for an ongoing workforce development program.

The 127-year-old Pate Dawson is one of the largest Southeast food-service distributors, operating in 14 states.

In other news, REBusinessOnline.com reports that Percival McGuire broke ground on a $7 million retail project at 7809 West W.T. Harris Blvd., in Charlotte’s North submarket. The developer’s website categorizes the 35,000-square-foot Northlake Plaza as a strip center. The property’s anchor tenants, McDonald’s, Buffalo Wild Wings and Discount Tire, have already signed leases for a large part of the development, leaving 9,500 square feet that has yet to be leased. According to The Voice, the McDonald’s is expected to open in the first quarter of 2013, while Buffalo Wild Wings and Discount Tire will open in the second quarter.

Click here for more Charlotte market data.

Photo credit: pmcre.com 

Sonesta ES Suites Charlotte Opens; $27M Facility for Green Energy Player

By Eliza Theiss, Associate Editor

The city of Charlotte recently added a new hotel to its ever-growing hospitality industry. Located at 7925 Forest Pine Dr. in the southern part of the city, Sonesta ES Suites Charlotte is a chapter of Sonesta International Hotels Corporation—a global collection of upscale and extended-stay hotels, resorts and cruise ships.

The 106-key Sonesta ES Charlotte is an extended-stay hotel and, as such, amenities strive to create a home-away-from-home type environment. Each suite, whether it is an over-sized studio or a one or two-bedroom unit, features a work area with complimentary high-speed internet access, as well a fully equipped kitchen.  Units range between 550 and 750 square feet.

Business-related hotel amenities include 500 square feet of meeting space and a 24-hour business center. Other amenities include a 24-hour fitness room, a sports court, an outdoor swimming pool and grill.  Guest laundry and complimentary daily buffet breakfasts are offered as well.

Located in Charlotte’s Arrowood Business District and in proximity to I-77 an I-485, Sonesta ES Charlotte in conveniently located to major corporations such as Verizon, Microsoft and Frito Lay, as well as prime shopping venues such as Southpark Mall and Carolina Place Mall and entertainment destinations like Carowinds Amusement Park and the NASCAR Hall of Fame.

In other news, Schletter Inc.—a designer and manufacturer of solar power mounting systems—has announced plans to construct a $27 million production and distribution facility in Shelby, Cleveland County, reports Charlotte/Raleigh Citybizlist.

The facility is expected to be completed by the end of 2016, at which point it will have created 305 new jobs with wages averaging $40,660 plus benefits, considerably higher than the $32,760 median salary of Cleveland County.

Schletter currently supplies 25 percent of all solar mounting systems produced and distributed in the U.S. After completing the Shelby facility, Schletter will move its U.S. headquarters from its only other U.S. facility located in Arizona. The Arizona site will become the West Coast hub of operations.

Photo courtesy of Leonard G via Wikimedia Commons

Chart courtesy of Cassidy Turley

Click here for more Charlotte market data.

Greystone Closes $33M Affordable Housing Transaction

By Eliza Theiss, Associate Editor

Greystone Affordable Housing Initiatives LLC (GAHI), a leading provider of affordable housing recapitalization and rehabilitation transaction management services, announced the closing of a $33 million multifamily transaction for a North Carolina portfolio of family- and elderly-designated properties.  The USDA Rural Development portfolio encompasses 12 properties totaling 368 units located in nine counties throughout the rural region of western North Carolina, within 140 miles of Asheville.

The properties, developed by the HBREM LLC’s owners over thirty years ago, will undergo a five-month renovation not only to extend their useful life periods, but also to improve comfort and energy efficiency. Planned interior improvements include re-flooring and refurbishing kitchens with new cabinets and countertops, as well as replacing plumbing fixtures, light fixtures and doors.

The energy efficiency of units will be increased by installing insulated double-pane windows, energy-efficient hot water heaters and various environmentally-friendly appliances, as well as upgrading heating and air systems. Work done on the exterior will include re-roofing and installing new hardplank or vinyl siding.

Improvements will not be exclusive to units and some upgrades will be done on a community level, such as installing new children’s playground equipment, establishing picnic areas and touching up on landscaping.

Columbia-based Arnold Construction Corporation is the chosen general contractor, with Ross Deckard Architects P.A. acting as the firm in charge of design. According to a press release, Howel Linkous & Nettles LLC served as counselor to developer HBREM LLC, while Ramirez & Co. Inc. acted as financial advisor.

Funding includes both public and private sources and breaks down to $13.9 million in tax exempt bonds issued by the North Carolina Housing Finance Agency and $11.5 million in USDA RD Section 515 debt. Section 515 is a direct loan program directed towards owners looking to rehabilitate, build or buy rural rental housing.

A further $7 million in capital was raised by Community Affordable Housing Equity Corporation purchasing 4 percent LIHTC’s, a type of indirect federal subsidy used to finance the development of affordable housing. $447,000 in owner contribution was also secured.

Chart courtesy of National Low Income Housing Coalition.

Click here for further Charlotte market data.

LEED Silver Multifamily Property Sold for $74M

By Eliza Theiss, Associate Editor

Post Properties Inc. has acquired Circle at South End from Crescent Resources in one of Charlotte’s priciest multifamily transactions. Post paid $74 million, or $205,555 per unit, for the property, which it immediately re-branded as Post South End.

The 360-unit property is located in the Queen City’s South End neighborhood in the proximity of Charlotte’s Lynx Blue Line light rail service. This proximity makes the property highly attractive to young professionals, as the Blue Line serves Uptown—one of the major employment hubs in the city.

This seems to be one of the most important reasons behind the purchase, as Post Properties CEO Dave Stocker declared in a press release: “The Charlotte apartment market is performing very well, and we are pleased to add a high quality, well-located community to the Post portfolio in that city. Post Sound ^TM provides access to transit and a mixed-use environment that appeals to the young, educated professionals we look to attract and retain as our residents.”

The mixed-use environment that Stocker referred to are the 7,612 square feet of retail space that are 100 percent leased to three restaurant and bar venues.The apartment community itself is currently 95 percent leased.

Built in 2009, the community features one-, two and three-bedroom units, as well as studio apartments. Stainless steel appliances, custom-designed cabinets and sinks and private patios come with every unit. One of the main attractions of the community is the Resident Lounge, outfitted for billiards, playing video games and watching movies. It also features a gourmet kitchen. Post South End features a pool and poolside grilling stations, and residents have access to courtesy bicycles.

Courtesy bicycles are only a part of the property’s green elements that contributed to the LEED Silver rating it received in 2010. The community, built with a considerable percentage of recycled materials, implements water-efficient landscaping and water-conserving fixtures, while being outfitted with energy-efficient appliances. The community is also 100 percent smoke-free.

Sarofim Realty Advisors was Crescent Resources’ capital partner in Circle at South End. CBRE Group represented Crescent in the sale. Post funded the purchase with cash.

The buyer expects the yield of the first year of ownership to be 5 percent, following a 3 percent management fee and $300 per unit reserves.

For more Charlotte market data click here.

Chart credit: Marcus&Millichap

Photo credit: Circle at South End’s Facebook profile

Eastland Mall May Get New Life

By Eliza Theiss, Associate Editor

Eastland Mall, eastern Charlotte’s once-reigning shopping mall, could once again become a revenue-generating property. According to a report by the Charlotte Observer, officials have put the purchase of Eastland on the city’s immediate agenda with a reported $13.2 million price tag.

If the city were to acquire the mall, it would do so to consolidate a property that at present has seven individual owners. That makes negotiations with potential new investors and developers difficult and time-consuming, whereas a single-owner type structure would simplify any and all processes.

Walker Wells of Charlotte real estate firm Freeman, McClintock & Wells is brokering the potential deal and has been successful in securing 81 acres of the Eastland property for sale. That’s nine acres short of the total surface area and includes not only the main building but some outlying parcels and anchor stores as well.

However, the deal has to close by the end of August, meaning the city needs to make a swift decision regarding Eastland—something it has tried and failed to do in the past. In 2009, the city became interested in purchasing Eastland, offering $22.2 million for the site. Discord in the council regarding the price prevented the deal from closing, and $400,000 in option costs was lost.

Known for purchasing distressed office and commercial properties, Houston-based Boxer Property acquired a part of the mall in 2010 for $2 million from Miami Beach-based LNR, promising a “Hispanic-themed” redevelopment, according to The Charlotte Observer. That project never happened, even though Boxer claims it has tenants lined up. Nevertheless, Boxer will be shedding its interest in the property, if possible.

Built in 1975, two-floor Eastland has over 1 million square feet of retail space and was at the center of Charlotte’s eastern suburbs until the early 1990s. The property was said to have be worth $150 million a few years ago, but in 2010 it closed.

The city of Charlotte has not released any information about the existence of parties interested in the Eastland site, but Wsoctv.com reported rumors regarding the city potentially redeveloping the site into a film studio—complete with back lot and sound stage—hoping to attract even more film productions to the Charlotte area.

For more Charlotte market data, click here.

Charts courtesy of Marcus & Millichap

The Vue’s Woes Over?

By Eliza Theiss, Associate Editor

It seems Charlotte’s ultimate luxury residential tower is at a crossroads.  Real estate firm HFF LP announced it has closed the sale of a loan secured by The Vue—the 409-unit, 51-story Class A luxury residential tower located in Charlotte’s Fourth Ward.

As previously reported, HFF began marketing The Vue’s $130 million junior debt in early March on behalf of insurance companies Mitsui Sumitomo of Japan and Germany-based Munich RE . The companies had provided default insurance to the junior debt holder, MCL Cos of Chicago, and had assumed the note after MCL defaulted on its loan in February 2011.

According to an HFF press release, the sellers were represented by HFF senior managing directors Gerry Rohm, Whit Wilcox and Jason Nettles; executive managing director Manny de Zarraga; and director Jaret Turkell. Maurice Habif was the lead HFF analyst in the transaction.

Located at 404 West 5^th St., The Vue was announced in 2005 by Orlando-based Churchill Development Group LLC and Westminster Partners LLC of Lake Forest, Ill. After struggling to secure financing for the project, MCL bought it in 2007 and broke ground in 2008. The high-end high-rise opened in late 2010 but sold only 18 condos out of the total 409.

Amenities at The Vue include a 4,000-square-foot lounge and club room, a 35,000-square-foot amenity deck featuring a Junior Olympic-sized pool, a yoga room, fitness center, multipurpose sports court, business center, a pet park overlooking Fourth Ward Park, parking, concierge service and biometric fingerprint access security. Units have an average surface of 1,317 square feet and are decked out with stainless steel appliances and granite countertops, while also featuring floor-to-ceiling glass windows.

According to the Charlotte Business Journal, New York-based Northwood Investors purchased the junior debt for $42 million and then paid off the senior debt held by Goldman Sachs, following which it launched foreclosure proceedings against the The Vue’s owners. The high-rise was auctioned off to an affiliate of Northwood for $102.75 million in June. According to the aforementioned source, the condos will be converted into luxury apartments to be leased at a rate of $1,300 to $5,000 per month.

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Photo courtesy of Brick177 via Wikimedia Commons

The Palisades Purchased; Mooresville Luxury Equestrian Property to Be Auctioned

By Eliza Theiss, Associate Editor

Standard Pacific Homes has purchased a 1,100-home site at the 1,600-acre master-planned community—The Palisades—on the shore of Lake Wylie, N.C. The value of the deal has yet to be disclosed, but according to a Standard Pacific Homes press release, the purchase is the largest community land transaction of this caliber within Charlotte.

The developer plans to build “move-up” type homes featuring new designs with generous open spaces, luxurious master suits, high-end gourmet kitchens and private bathrooms on about 50 percent of the land by the end of 2013, while reselling the remaining half to other developers.

13,400-acre Lake Wylie is one of the hottest submarkets in the region, offering luxurious community amenities such as a Jack Nicklaus-designed 18-hole golf course, swimming and soccer facilities, a fitness center, tennis courts and a sports complex. The Palisades is located only 15 miles away from Charlotte Douglas International Airport and the Uptown business district.

In other luxury property news, Concierge Auctions of New York City has announced it will be auctioning off the 139-acre “Finncastle” property on August 2, after an initial listing for $10.9995 million failed to attract a buyer.

Located at 9280 West NC Highway 152 in Mooresville—20 miles north of Charlotte—the property presents multiple opportunities. Future owners could keep it in its current state as an equestrian training facility and private residence or choose to develop the sprawling property further.

The property boasts not only a luxurious five-acre custom residence and premier equestrian riding and training facility, but also land and infrastructure for 33 two- to five-acre homes.

According to a press release, the equestrian facility features an outdoor, lighted regulation dressage arena; a lighted and enclosed arena with viewing and a sound system; a covered solid wall round pen with viewing; 18 European-style stalls; and outdoor individual Triple Crown fenced paddocks.

The five-bedroom, 8,900-square-foot main residence features amenities such as a media room, an exercise room, six full bathrooms and two half bathrooms, an outdoor kitchen, an outdoor pool/spa, a three-car attached garage, a 5-car detached garage, climate control, lift and office space.

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Photo courtesy of t23e via flickr.com

Fifth Third Center Acquired by Parmenter Realty

By Eliza Theiss, Associate Editor

Lately, the Charlotte office market seems to be as hot as the temperatures. Just a little over a week after Azrieli Group Ltd. entered a $245 million purchase agreement for One Wells Fargo Center, and less than a month after Parkway Properties closed on the Hearst Tower for $250 million, Parmenter Realty Partners announced the acquisition of Fifth Third Center for a yet to be disclosed sum.

The 30-story tower is one of several bank-owned, marquis trophy buildings in the Queen City to hit the market since 2011, spurred by several financial institutions’ need to raise capital and cut costs.

Located at 201 North Tryon St. in Charlotte’s central business district—the second largest banking center in the United States after New York City—Fifth Third Center boasts 654,533 square feet of Class A office space, as well as an attached 10-story, 1,030-space parking deck.

The office tower boasts amenities such as 24-hour security, valet and concierge services, retail shopping and dining options such as NIX Burgers&Brew and Capital Grille, among others. The Smallwood, Reynolds, Stewart, Stewart & Associates Inc.-designed structure also features a landscaped outdoor plaza outfitted with benches and tables.

CBRE Group Inc. brokered the transaction with Will Yowell and Ryan Clutter acting as sales brokers and Charles Foschini assisting in securing financing for the transaction.

“We’ve been interested in expanding our portfolio in the Charlotte market for some time, and Fifth Third Center was exactly what we were looking for,” stated John Davidson, managing principal of Parmenter’s Southeast Region in a press release.  “The building will soon have over 100,000 square feet of prime, contiguous office space available, and we saw this as a great opportunity to welcome a new business headquarters to our top floors and to Charlotte,” he continued.

South Florida-headquartered Parmenter Realty Partners is a commercial real estate investment, management and development company with regional offices in Dallas and Atlanta. Parmenter operates a series of institutional investment funds focused on the southern tier of the US and is actively involved in the expansion of its portfolio in the region’s major markets.

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Photo courtesy of Atlantiquon via flickr.com

Former Wachovia HQ to Be Purchased for $245M

By Eliza Theiss, Associate Editor

Hot on the heels of Parkway Properties Inc.’s $250 million purchase of Hearst Tower, one of the biggest office property sales of the year in the Charlotte area, comes another major sale. Israeli real estate firm Azrieli Group Ltd. recently announced it has entered a $245 million purchase agreement for the 985,315-square-foot One Wells Fargo Center.

According to the purchase agreement between Azrieli and developer-owner Childress Klein Properties, the deal includes full rights to the 42-story office building, as well as the enclosed seven-level, 1,100-car parking garage. CBRE Group Inc. brokered the deal.

Located at 301 South College St. in Charlotte’s downtown submarket, the 1989-built property features Class A office space and was most recently renovated in 2008. The property features an exterior plaza.

Wells Fargo Bank, the property’s namesake, holds a long-term lease agreement for about 70 percent of the total surface. The lease expires in December 2021 with a contractual mechanism for a one-time increase in rent—approximately 20 percent—during the lease period and the option to extend for an additional 10-year term.

The property is currently 97.7 percent leased, with 21,055 square feet of leasable space. According to Childress Klein’s website, the leasing rate is $29 per square feet. Childress Klein has been hired to stay on as property manager until December 2015, with an automatic contract extension in the event neither party seeks to terminate.

Azreali estimates an annual net operating income of $18.5 million until the main lease agreement is active, with the first year of ownership generating $16.3 million.

Financing for the acquisition will be covered from various sources, with $160 million being negotiated with foreign financing entities for a fixed interest rate of about 4.5 percent for a period of 10 to 12 years. The remaining 35 percent of necessary funds are to be secured from independent sources. Transaction costs are estimated at $1.6 million.

Azrieli Group owns in excess of 7.7 million square feet of leasable area and has more than 3.5 million square feet under construction. Almost 2 million square feet of leasable commercial and office space are owned in western countries, with the bulk of those assets in Houston, Tex.

For further market data on Charlotte, click here.

Photo credit: Kozo via Wikimedia Commons

$52M Luxury Apartment Community Breaks Ground

By Eliza Theiss, Associate Editor

Crescent Resources LLC has recently broken ground on its newest project: the $52 million luxury apartment community—Circle South Park—in Charlotte’s South Park neighborhood. Developers expect the first apartments to go on the market by the summer next year.

Located near SouthPark mall on Carnegie Boulevard right next to Piedmont Town Center, the 321-unit apartment community will be made up of studio apartments as well as one-, two- and three-bedroom units. Apartments will feature stainless steel appliances, washer and dryer, stone countertops, wood cabinetry, Moen fixtures and a designer lighting package.

Community amenities will include a cyber lounge, business center, state-of-the-art clubroom with a show kitchen and gaming area, multistory health club, resort-style saltwater pool with an aqua sundeck, outdoor kitchen with a lounging area, two-acre dog park and a scenic pond with a walking trail. All amenity areas will include complimentary Wi-Fi.

“Like other Circle communities, Circle South Park will offer a unique lifestyle and provide residents with an opportunity to live, work and play within easy walking distances,” Brian Natwick, president of Crescent Resources’ multifamily division, said in a press release. Keeping in line with the Circle community lifestyle, the South Park community will offer unique programming—such as volunteering and pet happy hours—to build a sense of community among residents and enrich their social experiences within the community.

Circle South Park will keep in line with Circle’s green guidelines and will be seeking Leadership in Energy and Environmental Design (LEED) certification from the U.S. Green Building Council upon completion.

Financing for the multifamily project is being provided by a Crescent equity investment, with construction financing from J.P Morgan Real Estate Banking and mezzanine financing from Nationwide Real Estate Investments. The Preston Leadership LLC is the project’s architect, while landscape architecture has been signed by LandDesign.

The interior design was envisioned by Vignette Interior Design, and civil engineering is being provided by ColeJenest & Stone. State Building Group is the general contractor for the build, while Greystar will be in charge of property management.

For more market data on Charlotte, click here.

Rendering credit: Circle South Park’s Facebook profile

Parkway Closes $250M Hearst Tower Deal

By Eliza Theiss, Associate Editor

Orlando-based real estate investment firm, Parkway Properties, Inc., announced it has completed the high-profile purchase of Charlotte’s fourth largest office building—the Hearst Tower. Closing on the office property was made possible by the $200 million equity investment promised by TPG earlier this year.

The 972,000-square-foot, 47-story office tower sold for $250 million, or $257 per square foot—a steeply discounted price considering factors such as the tower’s location in Charlotte’s central business district and its high occupancy. The property is 94 percent occupied and has no material expirations prior to 2017; it is expected to generate a net operating income of approximately $17.5 million during the first year of Parkway’s ownership period.

The purchase of Hearst Tower was financed with cash received from TPG, combined with borrowings on the company’s credit facility.  While the property is currently unencumbered, Parkway expects to obtain financing on it to provide capital for future investment opportunities.

As previously reported, the Hearst tower was sold to Parkway by Bank of America as part of its nationwide cost-cutting strategy. Bank of America will, however, enter a lease agreement with Parkway for 322,000 square feet through March 2022.

Parkway Properties is a self-administered real estate investment trust specializing in ownership of specialized office properties in higher-growth submarkets in the Sunbelt region, owning or having interest in 42 properties for a total of 10.7 million square feet of leasable space.

TPG is a leading global private investment firm founded in 1992 with $51.5 billion of assets under management and offices in major global markets.

Photo credit: jbarrieros via Flickr.com

 For additional Charlotte market data click here.