Federal Capital Partners, Roi-Tan JV Buys Historic Cigar Factory in Charleston, SC
- Apr 23, 2014
The historic Cigar Factory building in Charleston, S.C., is destined for a major makeover now that joint venture partners Federal Capital Partners and Roi-Tan Investments L.L.C. have acquired the 245,000-square-foot office structure and announced plans for its $55 million transformation into a premier mixed-use office and retail property.
“There has consistently been great demand for both office and retail space downtown, but the barriers, both natural and political, to creating new space to accommodate the market’s growth are tremendous, resulting in great demand for the well-located spaces that are available,” FCP vice president Bryan Kane told Commercial Property Executive.
The joint venture’s redevelopment endeavor at the Cigar Factory will help fill that void, while retaining and revitalizing a very important part of downtown Charleston’s history.
Located along the Cooper River at 701 E. Bay St., the building made its debut in 1881 as a cotton manufacturing facility. The doors of the property shuttered following the earthquake in 1886 and remained closed until 1903, when the American Cigar Co. set up shop in the five-story structure and remained there for the next 70 years. The property then spent nearly 10 years being utilized as office and warehouse space before it became home to culinary school Johnson & Wales University and other office users in 1982.
FCP and Roi-Tan are not the first to come forward with big redevelopment plans for the Cigar Factory. In 2007, TSO Cigar Factory L.L.C., a partnership led by real estate firm The Simpson Organization Inc., acquired the building for $14.2 million and proceeded with plans to convert the 4.5-acre site to an upscale condominium community, until the economic downturn brought those plans to a standstill.
Now, the Cigar Factory has a new future. Represented by Lee & Associates as brokers in the acquisition, FCP and Roi-Tan paid nearly $24.2 million for the asset, according to a deed filed with the county earlier this month, and they are ready to move forward with its redevelopment. Patterson Real Estate arranged equity for the deal.
FCP will provide $13 million in mezzanine financing, the partnership will contribute approximately $3 million of cash equity, and the remaining funds will come from Federal Historic, State Historic and Textile Mill Tax Credits.
The joint venture will restore the structure in a manner that will allow it to continue to serve as a prime model of Victorian-era commercial architecture, as well as a modern commercial destination. The property will feature creative work/office space, upscale retail and restaurants, and more.
“While there are many fantastic historic buildings in downtown Charleston, this one is unique in that it will have superior access to the entire MSA and substantial parking,” Kane added.
FCP and Roi-Tan have tapped Roadstead Real Estate Advisors L.L.C. to spearhead office leasing and Palmetto Commercial Properties Inc. to handle the retail side. The joint venture expects base building completion to occur during the first quarter of 2015.