Top 5 Office Transactions in Charlotte

As the city’s economy continues to flourish, investors are taking note. This year’s transaction volume exceeded $855 million through July, with no signs of slowing, Yardi Matrix shows.

As the tech and other office-using sectors of Charlotte, N.C., continue their rapid growth, the metro’s commercial real estate sector offers a reflection of this. Nearly 5.1 million square feet of office space is under construction, the bulk of it in the urban core. Existing assets are also drawing investment dollars, with transaction volume topping $855 million this year through July, potentially on track to exceed last year’s $1.3 billion in deals.

More than a quarter of this year’s transaction volume occurred in downtown Charlotte, though a notable number of deals also closed in the metro’s Midtown/South End and Airport submarkets. The table below highlights the top five transactions of 2019 through the end of July, based on data provided by Yardi Matrix.

5. The Johnston Building

The Johnston Building. Image via Google Street View

In July, Spaulding & Slye Investments paid The Dilweg Cos. $35.3 million for the historic Johnston Building, also known as Midtown Plaza. Pacific Coast Capital Partners provided the buyer with a four-year, $33.8 million acquisition loan. The 172,382-square-foot asset last traded for $25.3 million in 2015.

The property, opened in 1924, rises 17 stories at 212 S. Tryon St. in the central business district, two blocks northwest of the Charlotte Transportation Center, which links the area via bus and light rail systems to the wider region. The building is home to NTT Data and MassMutual as well as a range of other tenants including law and wealth management firms.

4. Fairview Center I & II

Fairview Center

Bridge Investment Group’s $39.3 million sale of the 182,202-square-foot Fairview Center—which also closed in July—marks the fourth-largest acquisition year-to-date in Charlotte. The new owner, CapRidge Partners, funded the purchase with a $28.9 million financing package from BBVA Compass Bank.

The Fairview Center’s two buildings opened in 1968 and 1984 in Charlotte’s vibrant SouthPark office submarket, some 6 miles south of downtown and across the street from Simon’s 1.7 million-square-foot SouthPark shopping mall. The property is home to a varied tenant mix, which includes the U.S. Secret Service, Zapata Engineering and entrepreneur mentoring firm SCORE Charlotte.

3. Gateway Center

Gateway Center

Charlotte’s third-largest transaction was Hamilton EQ’s $40.5 million acquisition of the 310,745-square-foot Gateway Center from GEM Realty Capital. J.P. Morgan provided $28.4 million in financing for the CBRE-brokered deal, which closed in March. The property last changed hands in mid-2016, when KBS Realty Advisors sold the asset for $28.5 million.

Located at 901 W. Trade St., the 10-story building is situated on the northern edge of the downtown area, next to Johnson & Wales University’s Charlotte campus. The institution’s admission center occupies part of the property, with other tenants including Bank of America and ELS Educational Services. The asset has a 15 percent load factor, an underground parking facility and 8,000 square feet of retail space.

2. 101 North Tryon

101 North Tryon. Image courtesy of HFF

In the largest single-building deal of the year in Charlotte, LRC Properties and Barings traded the 565,694-square-foot 101 North Tryon to a joint venture between Nuveen Real Estate and Crescent Communities for $132.3 million. BBVA Compass Bank originated $105.7 million in acquisition financing for the deal through a four-year mortgage. The seller’s renovations last year boosted the price tag; the former owner had acquired the asset in 2015 for $107.8 million.

Two blocks from The Johnston Building, the 20-story tower is adjacent to the Charlotte Marriott City Center and a stone’s throw from the Spectrum Center. The property’s tenant roster includes Bank of America, Sunlight Financial and Northeastern University. The new owner selected JLL to oversee property management and leasing.

1. Welltower Medical Office Portfolio

Midtown Medical Plaza

The 650,620-square-foot Charlotte component of Welltower’s $1.3 billion all-cash acquisition of CNL Healthcare Properties’ medical office portfolio lands the five-property, $264.3 million deal at the top of the list. The assets involved in the transaction range in size from 86,768 to 218,489 square feet.

All of the properties in the deal are set in suburban settings: Three of the assets are in the Midtown/South End submarket, with the other two located in Northwest Charlotte and the Crownpoint submarkets. The portfolio has a weighted average vacancy of 5.5 percent, with health-care brokerage firm Meadows & Ohly heading up leasing efforts and property operations.

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