Parmenter Lands Fifth Third Tower

By Gail Kalinoski, Contributing Editor

Fifth Third Center

Miami-based Parmenter Realty Partners has acquired Fifth Third Center, a 30-story office building in downtown Charlotte, N.C., from Bank of America with the aid of a $120 million financing deal obtained by CBRE Capital Markets.

The Class A tower was built in 1997 at 201 N. Tryon St and has 654,533 square feet of office space. In addition to an attached 10-story parking deck with over 1,000 spaces, the building features retail, an outdoor plaza and restaurants including the Capital Grille.

The building is currently 98 percent occupied with tenants including Bank of America, McGuire Woods, Fifth Third Bank and Carousel Capital. Wells Fargo, which acquired Wachovia Securities in 2008, is leaving approximately 100,000 square feet of space originally leased by Wachovia at Fifth Third Center in early 2013, according to a Parmenter spokesperson. She said the firm has some preliminary inquiries about the space.

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, said John Davidson, managing principal of Parmenter’s Southeast Region. 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.

Charles Foschini, a CBRE Capital Markets vice chairman in Miami, told Commercial Property Executive that the two loans his group arranged for Parmenter were going toward the acquisition and capital to prepare the space that Wells Fargo will be leaving for new tenants. The purchase price was higher than the $120 million secured by CBRE Capital Markets but Foschini said he didn’t have that information available and the Parmenter spokesperson declined to release the full acquisition cost.

The two-part financing deal totaled $119,800 and included a first mortgage from SunTrust and a mezzanine loan from Redwood Commercial Mortgage Corp. Both were three-year, interest-only loans with an extension option, Foschini said.

I can’t give a specific rate but I can suggest strongly that the combination of a first mortgage of a bank lender coupled with Redwood, which is a publicly-traded mortgage REIT, gave Parmenter an all-in interest rate that was far below the other competitive lenders for this asset, Foschini said. The rate achieved was demonstrative both of the quality of the asset and the strength of the sponsor.

Foschini worked on the deal with fellow vice chairman Christian Lee and Vice President Christopher Aponte, both of the Miami CBRE Capital Markets office. CBRE Vice Chairman Will Yowell of Atlanta and Vice Chairman Ryan Clutter of the Charlotte CBRE office assisted Foschini and brokered the sale.

The acquisition is the sixth purchase Parmenter has made in its Fund IV portfolio. The most recent addition to Fund IV was The Lenox Building, a Class A, 19-story building in Atlanta’s Buckhead section that it acquired in March. Parmenter purchased the 201,720-square-foot Class A tower at 2200 West Loop South in Houston from KBS Real Estate Investment Trust Inc. in February. Also in Houston, the firm purchased Brookhollow Plaza I-III, a Class A, three-building complex with 800,000 square feet of space. Parmenter, a privately-held company that focuses on value-add plays, did not disclose any acquisition costs.

The Parmenter spokesperson told CPE that the real estate investment firm plans to continue acquiring assets for the Fund IV. It is actively seeking to expand its portfolio in the southern tier of the United States. Other properties are located in Dallas, Plano and Los Colinas, Texas; Richmond, Va.; Nashville, Tenn.; Jacksonville, Fla.

In Charlotte, Parmenter previously owned Fairview Center, two buildings totaling approximately 182,000 square feet that it sold to MetLife Inc. in 2005.

Fifth Third Center is the second downtown Charlotte office tower Bank of America has sold in recent weeks. Earlier this month, Parkway Properties Inc. bought the Hearst Tower, a 46-story, 972,000-square-foot building for $250 million.