Brookfield Acquires Apartment Communities in the Triangle for $108M

by Adriana Pop, Associate Editor

Brookfield Asset Management Inc. has purchased five multi-family properties in the Triangle region, as part of a $414 million deal to acquire a total of 19 apartment communities in North Carolina, South Carolina and Virginia. Babcock & Brown Residential, the seller of the 4,892-unit portfolio was advised by Robert W. Baird & Co.

According to the Triangle Business Journal, the assets located in the Triangle accounted for a combined $108 million, or $76,900 per unit.

The newspaper reports that the 462-unit Oak Hollow property in Cary sold for $32.6 million, while the 144-unit Bridges at Chapel Hill in Carrboro sold for $11.6 million. The region’s other three communities that were included in the sale are located in Durham: the 346-unit Bridges at Wind River (pictured), which sold for $32.6 million, the 264-unit Woods Edge, which sold for $18.7 million, and the 192-unit Bridges at South Point, which sold for $12.76 million.

Overall, Brookfield’s newly acquired portfolio has an average occupancy rate of 92 percent. The assets are currently financed with individual non-recourse first mortgage loans which have been assumed as part of the deal. The company intends to invest another $30 million in the selective upgrading and repositioning of the communities.

“The acquisition of this attractive portfolio adds to Brookfield’s significant multi-family platform and positions us for continued growth in this property sector,” said David Arthur, managing partner at Brookfield Asset Management.

With its latest additions, Brookfield’s multifamily portfolio has grown to approximately 20,000 units throughout the United States. Fairfield Residential, an affiliate of the multibillion-dollar asset management company, will take over management of the properties from Gingko Residential of Charlotte.

Photo credits: www.bridgesatwindriver-apts.com

KBS Realty Acquires Iconic Building in Suburban Raleigh for $98.4M

by Adriana Pop, Associate Editor

On Jan. 31, a joint venture partnership between Indianapolis-based real estate investment trust Duke Realty Corp. and Raleigh-based real estate development firm Kane Realty Corp. sold the 17-story Captrust Tower in the city’s North Hills area. KBS Realty Advisors of Newport Beach, Calif. acquired the approximately 300,000-square-foot property for $98.4 million, or nearly $326 per square foot.

Developed in 2009, the LEED Gold-certified high-rise at 4208 Six Forks Road offers 275,630 square feet of office space, 26,813 square feet of retail space and a six-level parking deck. The property is 95 percent leased to 18 companies, including Captrust Financial Advisors, the American Board of Anesthesiology, CBRE, Regus, RBC Capital Markets and other national and regional tenants.

“Captrust Tower is the best project in Raleigh and has leased faster and at higher rents than any other office project,” said Charles Schreiber, CEO of KBS Realty Advisors.  “We’ve been focused on Raleigh and specifically Captrust Tower due to the quality master-plan and the maturity of the mix of uses already in-place and planned.”

According to the Triangle Business Journal, the tower’s advertised lease rate for office space is $31.95 a foot per year, the highest rental rate of any non-medical office property in Wake County.

Kane Realty will continue to have an ownership interest in the project through the 4208 Six Forks Road LLC joint-venture formed with KBS. Kane will also be in charge with the building’s leasing and management activities.

The sale of the Captrust Tower is part of Duke’s strategy of divesting suburban office assets, while increasing its industrial and medical office portfolio. The company’s long-term goal is to have 60 percent of its holdings in industrial, 25 percent in office and 15 percent in medical office properties.

In the Triangle region, KBS owns three other buildings totaling nearly 250,000 square feet of space in the Crescent Green office park in Cary, as well as the 127,000-square-foot Colonnade One office building on Six Forks Road in North Raleigh.

Photo credits: FoxDon via Wikimedia Commons

Grubb Properties to Develop 203-Unit Link-Branded Apartment Complex in Raleigh

by Adriana Pop, Associate Editor

Grubb Properties is planning a 203-unit luxury apartment complex in Raleigh’s Glenwood South district. According to the NewsObserver, the project will be developed on half a block bordered by Jones, West and Harrington streets.

“We think it’s one of the best sites, certainly in the Triangle market, and one of the top sites that we’re working on in the entire Southeast,” Todd Williams, Grubb’s senior vice president of investments, told the newspaper.

The new complex will feature 162 one-bedroom units and 41 two-bedroom units. The apartments will be developed under the company’s Link brand, which targets younger renters who prefer to live in urban areas that offer easy access to jobs, entertainment and cultural amenities. Grubb recently opened its first Link property in Richmond, Va. (pictured).

Construction on the Glenwood South project is expected to start by this year’s third quarter. Grubb intends to purchase the site from a group of developers who in 2008 proposed building a hotel and an office tower.

In North Raleigh, Grubb Properties co-owns the Sterling Forest apartments on Six Forks Road and is currently developing a 339-unit apartment project called Sterling Town Center.

Overall demand for apartments in the Triangle has been high recently, with rents increasing 4 percent between September 2011 and September 2012. New construction is also significant, data from Karnes Research and the Triangle Apartment Association shows. There are currently 1,200 units in the pipeline in the downtown Raleigh area alone. In the Glenwood South district, several projects are slated to open this spring.

Photo credits: www.apartmenthomeliving.com

$55M Mixed-Use Development in Downtown Chapel Hill Nears Completion

by Adriana Pop, Associate Editor

One of Chapel Hill’s largest mixed-use projects, 140 West Franklin will be complete by late April. Located at the intersection of West Franklin and Church streets, the venture is expected to boost economic activity and bring new markets to town.

According to The Daily Tar Heel, the $55 million downtown complex will offer 140 condominiums, 26,000 square feet of retail space, a public plaza and 337 parking spaces. Developed by Ram Realty Services, the structure stands eight stories tall at its highest point.

“The goal was definitely to develop Franklin Street — this is some of the first Class A retail space available on Franklin Street in a long time,” development manager Jon Keener told the newspaper.

While most of the retail space has already been leased, 140 West’s residential units have also been popular. So far, 99 of the total available condominiums have been sold. The size of the homes ranges from one-bedroom units to two-story terrace residences, with prices ranging from $325,000 to $1,525,000.

In other news, The Nature Conservancy will move its regional and state headquarters to Durham’s American Tobacco Campus by the end of the month. The Triangle Business Journal reports that the nonprofit organization will relocate its 40 to 50 employees and volunteers from the One University Place building in south Durham to 13,000 square feet of downtown space in the Strickland Building.

“For us, moving to American Tobacco made perfect sense and opened up lots of opportunities to be both more sustainable and make a bigger impact on our community,” said Katherine Skinner, executive director of The Nature Conservancy’s North Carolina Chapter.

The American Tobacco campus is owned and operated by Capitol Broadcasting Company Inc. The organization also owns the Diamond View office buildings in Durham.

Photo credits: www.ramrealestate.com             

Hampton Hotel Opens 11th, 136-Room, Property in Raleigh

by Adriana Pop, Associate Editor

Global hospitality brand Hampton Hotels announced the opening of the Hampton Inn & Suites Raleigh/Crabtree Valley. Located at 3920 Arrow Drive, on the site of the former Crabtree Inn building, the 136-room hotel is the 11th Hampton property in Raleigh.

Amenities include a business center, meeting space, a fitness center, 24-hour suite shop, an indoor heated swimming pool with outdoor sun deck, high-speed Internet and complimentary shuttle service to local businesses and Crabtree Valley Mall.

According to the Triangle Business Journal, Winwood Hospitality Group of Morrisville is the owner and operator of the property. In the first quarter of 2014, the company will also open a 160-room Hilton Garden Inn hotel next to the Hampton Inn & Suites Raleigh/Crabtree Valley property.

In December, the new Hampton Inn & Suites Raleigh Downtown opened at 600 Glenwood Avenue. The 126-room property is owned by Stewart Hotel Associates LLC and operated by Prime Investments LLC.

In regional news, Highwoods Properties, Inc. has announced the acquisition of two Class A office buildings in the Green Valley submarket of Greensboro. The 195,000 square feet portfolio commanded a combined sales price of $32.8 million, including $2 million for the near-term improvement of the buildings.

At an occupancy rate of 95.5 percent, the properties are expected to generate full-year 2013 net operating income of $3.1 million. About $0.2 million of expensed acquisition costs will be recorded in the first quarter.

Ed Fritsch, president and CEO of Highwoods, stated: “These buildings are two of Greensboro’s top office properties. They have been on our wish list for some time and are immediately accretive to FFO.”

Photo credits: www.worldinteriordesignnetwork.com

New York Opportunity Fund Closes on $5.2M Acquisition of Long-Vacant Downtown Building

by Adriana Pop, Associate Editor

In a $5.2 million deal, real estate investor Howard Lavitt and his partners at LRC Opportunity Fund of New York have acquired a long vacant, 11-story, office building in downtown Raleigh. The Triangle Business Journal reports that the transaction closed on Dec. 21. Ben Kilgore with CBRE in Raleigh represented the sellers, New York businessmen Morton Rosenfeld and Milton Schwartz.

Located at 227 Fayetteville Street, the 100,000-square-foot property has been empty since its former tenant, Wachovia Bank, moved out in 2003. Wachovia developed the building in 1964, after signing a 50-year ground lease with the owners of the lot. The contract expired in January 2011, and the ownership of the structure was transferred to the land owners’ heirs.

Plans now call for the interior renovation of the building, which should be complete by the fourth quarter of 2013. Project manager Steve Weitnauer with Solutions PDM is in charge of the demolition and reconstruction, while Davidson and Jones Construction Co. are the general contractor.

In regional multifamily news, Elco Landmark Residential of Tampa, Fla., and Canada-based Timbercreek Asset Management are the new owners of a 264-unit apartment complex in Chapel Hill. According to the Triangle Business Journal, Birmingham, Ala.-based Colonial Properties Trust sold the Colonial Village at Highland Hills for $17.75 million.

The acquisition was part of a $95.4 million transaction that included another three apartment communities in North Carolina, Texas and Virginia. The Elco/Timbercreek partnership has also purchased the 476-unit Heatherwood Apartment Homes in Charlotte, the 229-unit Colonial Village at Canyon Hills in Austin, Texas and the 425-unit Autumn Hill Apartments in Charlottesville, Va. The entire portfolio formerly owned by Colonial Properties amounts to 1,380 apartments and is 95 percent occupied.

Photo credits: Steve Wilson via www.bizjournals.com

Glenwood Hospitality Debuts $15M New Hampton Inn and Suites Hotel in Raleigh

by Adriana Pop, Associate Editor

The new Hampton Inn & Suites Raleigh Downtown is officially open.  Located at 600 Glenwood Avenue, the boutique-style property offers 126 guestrooms.

According to the Triangle Business Journal, it is the first hotel to open in the city’s downtown area since the Raleigh Marriott City Center launched on Fayetteville Street in 2008. The property is also the first lodging construction project in the Glenwood South district.

Glenwood Hospitality Associates LLC has developed the $15 million six-story building. Amenities include free hot breakfast, a 24-hour business center, a modern fitness center, and an indoor heated pool. Guestrooms are equipped with free high-speed internet access, lap desk and HDTV. The hotel also features 1,000 square feet of retail space, a 970-square-foot meeting room and a patio with a fire pit.

“Hampton combines quality, innovation, comfort and plenty of value-added extras, making it the brand of choice in the marketplace today,” said Tony Gomez, general manager of the Hampton Inn & Suites Raleigh/Downtown.

Hampton Inn & Suites Raleigh Downtown is owned by Stewart Hotel Associates LLC and operated by Prime Investments LLC. The new hotel is the tenth Hampton property in Raleigh, while five more are slated to open in North Carolina.

In regional news, Weinstein Properties of Glen Allen, Va. has acquired the 288-unit Alexan Panther Creek apartment complex in Cary. The Triangle Business Journal reports that Trammell Crow Residential of Dallas sold the upscale property for $33.5 million.

Developed in 2008, Alexan Panther Creek is the seventh multifamily acquisition for Weinstein Properties in the Raleigh region. The investor now plans to re-brand its new property as Bexley Panther Creek. The company owns and operates six other Bexley-branded luxury apartment communities in Raleigh, Cary, Morrisville and Wake Forest. Since 2004, Weinstein has invested more than $232.1 million in the purchase of its Triangle apartment complexes for an average of $103,900 per unit.

Photo credits: hamptoninn3.hilton.com

Bayer to Construct $2.65M North American Bee Care Center

by Adriana Pop, Associate Editor

Bayer CropScience has announced plans for the development of a North American Bee Care Center at the company’s headquarters in Research Triangle Park. The estimated cost of the project is $2.65 million, the Herald Sun reports.

Construction on the 6,600-square-foot LEED Gold-certified facility is expected to begin in February. Upon completion in July 2013, the center will serve as a gathering place between researchers, bee experts, students, visitors and leading Bayer scientists.

“We understand the necessity for healthy bees as pollinators and their critical role to agriculture, and by working with scientists, growers, beekeepers and customers, we strive to create new approaches and solutions to benefit bee health and the global food supply,” said Jim Blome, president and CEO of Bayer CropScience North America.

Bayer’s new North American Bee Care Center will generate more energy than consumed through its geothermal heating and cooling, LED lighting and solar water heating. The facility is the company’s second establishment dedicated to the preservation and promotion of bee health. In 2012, the global Bayer Bee Care Center opened at the joint headquarters campus of Bayer CropScience and Bayer Animal Healthin Monheim in Germany.

In other news, Capital Senior Housing of Washington, D.C. has purchased two luxury-style senior apartment communities from Bell Partners Inc. According to the Triangle Business Journal, the Alta Oakridge property in north Raleigh sold for $24.25 million, while the Alta Walk property in Durham sold for $23.25 million.

With the sale of its last two senior housing complexes, Bell Partners Inc. now plans to refocus its growth on the multifamily residential market. The company owns or operates 242 apartment properties with more than 69,000 apartment units. In the U.S., Bell is among the 10 largest apartment operators. The company also ranks as the second largest apartment management firm in the Triangle region.

Photo credits: www.bayercropscience.us

City of Raleigh Approves Dorothea Dix Lease Agreement to Create Urban Park

by Adriana Pop, Associate Editor

The Raleigh City Council’s lease of the Dorothea Dix Hospital campus will enable the city to move forward with its plan to reconvert the 325-acre property into an urban park.

The city council has agreed to lease the Dorothea Dix Hospital campus from the State of North Carolina for up to 99 years. The lease agreement will be executed by the end of the year.

“The plan is the most appropriate way of preserving this open space as a park, while at the same time providing revenue to the state,” Gov. Bev Perdue said in a news release.

Under the terms of the agreement, the city will pay the state a rate of $500,000 annually, plus a 1.5 percent yearly increase over the length of the lease term. Furthermore, the state Department of Health & Human Services will be allowed to maintain its offices on the Dix campus for up to 15 years.

Supporters of the Dix Park idea have already announced a fundraising effort for the project. Called the “Dix Visionaries”, the group has pledged $3 million in private donations to support the creation of a master plan for the park.

In other news, Slate Properties of Toronto has acquired the Fuquay Crossing shopping center in Fuquay-Varina for $13.1 million. According to the Triangle Business Journal, the company purchased the Kroger-anchored retail center from Jacksonville, Fla.-based Regency Centers Corp.

Located at the intersection of Sunset Lake Road and Broad Street, the 14.5-acre property offers approximately 124,770 square feet of retail space available for lease. The newspaper reports that during this year’s third quarter, the center was 92 percent occupied.

Besides the Kroger grocery store, the property’s other tenants include O2 Fitness, Dollar Tree, After Hours Pub, Assaggio’s Restaurant, AT&T Wireless, Blockbuster Video, Cato, Crazy Glaze, GNC, Hallmark, King Wok and The UPS Store. The sale did not include a number of outparcels owned by retailers like Golden Corral, Smithfield’s Chicken ‘N Bar-B-Q and Bank of America.

Photo credits: twbuckner via flickr.com

New York Opportunity Fund to Spend $17M on Acquisition, Rehab of Vacant Downtown Building

by Adriana Pop, Associate Editor

LRC Opportunity Fund of New York plans to purchase and renovate the vacant 10-story office building at 227 Fayetteville in Raleigh. According to the NewsObserver, the company expects to close on the sale by the end of the year.

“Our plans are to do a total renovation,” Edward Kulik, a co-founder of LRC, told the newspaper.

The investor intends to renovate the building’s façade while retaining some of the 1960s materials. Plans also call for a retail portion on the ground floor.

The building has been on the market since a 50-year lease agreement between a branch of Wachovia bank and the owners of the land expired on Jan. 31, 2011. LRC expects to spend around $17 million on the acquisition and renovation of the property.

Founded three years ago by Kulik and Howard Lavitt, LRC acquires all types of properties. The old Wachovia property is the company’s second acquisition in the Triangle. Earlier this year, LRC paid $5.2 million for the 51,500-square-foot Brier Creek Medical Pavilion that Wells Fargo had foreclosed on.

In other news, the Triangle Business Journal reports that on Nov. 29 biotechnology firm Biogen Idec will celebrate the opening of the 190,000-square-foot Bio26 administration building in the Research Triangle Park.

The event will include tours of the facility, as well as remarks from Scangos and RTP campus General Manager Machelle Sanders. Gov. Beverly Perdue will also attend the ceremony, the newspaper reports.

Developed to achieve LEED Gold certification, the five-story building will allow Biogen Idec to return its patient services unit to the RTP campus and expand its manufacturing capabilities and laboratory space.

The Cary office of Goldsboro-based RN Rouse was in charge of construction management, while O’Brien/Atkins of Durham designed the project.

Photo credits: Steve Wilson via www.bizjournals.com