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