Raleigh-Durham Commercial Real Estate Wrap-Up – September 2020

Work starts on $1.5 billion development. Starwood sells office assets for $189 million. Check out our September list of Raleigh-Durham must-reads.
Hub RTP. Rendering courtesy of Duda|Paine Architects

At the start of the month, the average number of new COVID-19 cases in North Carolina was declining. However, that trend did not continue, as the state saw a 28 percent increase in the number of new infections over the past two weeks, according to The New York Times. Meanwhile, several landmark deals closed in Raleigh-Durham in September, with investors poured capital into properties across a wide spectrum of asset classes. On the development side, companies moved ahead on large-scale projects that will significantly increase the market’s office supply. Read our September selection of Raleigh-Durham must-knows:

1. DEVELOPMENT – Research Triangle Foundation kicks off 2 million-square-foot project.

The company held a virtual ground breaking ceremony for Hub RTP, a 43-acre campus with an estimated cost of $1.5 billion. The development is set to include office, hotel and retail space, as well as 800 apartments. Faulconer Construction serves as the general contractor for the Duda|Paine Architects-designed project. JLL will oversee leasing efforts for the office component, while Middle-America Apartment Communities will manage the residential side.

2. DEAL – Mapletree Investments pays $189 million for three office assets.

Starwood Capital Group sold a three-property portfolio encompassing 519,812 square feet in Morrisville, N.C. The deal included two buildings in Lenovo’s U.S. headquarters campus at 1009 at 1025 Think Place, and another property at 5221 Paramount Parkway, according to Yardi Matrix. Completed in 2006 and 2008, the assets are fully leased to Lenovo, Credit Suisse and UNC Medical Center.

3. SUSTAINABILITY – Duke University signs up for 101 MW of solar power.

The institution signed the renewable power agreement under Duke Energy’s Green Source Advantage program. The move is part of the university’s goal to achieve carbon neutrality by 2024. Under this initiative, the academic institution plans to reduce on-campus emissions by 84 percent and cut down on remaining emissions by investing in carbon offsets. The agreement is expected to reduce the university’s carbon emissions by nearly 70 percent in the next two years.

4. DEAL – Realty Income Corp. buys Wegmans-anchored asset for $35 million.

LeylandAlliance sold the 103,000-square-foot property in Cary, N.C. The store is part of the Twin Lakes Center, a 34-acre mixed-use campus developed by the seller. The center also encompasses an additional 25,000 square feet of retail, as well as medical office space, along with nearly 400 residential units under construction. Located at 3710 Davis Drive, the building was recently completed.

5. DEAL – Mountain Real Estate Capital sells office park.

Boyd Watterson Asset Management paid $41.6 million for the 206,829-square-foot Somerset Park, a four-building campus at 4401 Bland Road in Raleigh, Yardi Matrix data shows. The property was built in 1987. The asset last traded in 2015, when Somerset Investments sold it for $27 million. Following that acquisition, Mountain Real Estate Capital renovated the property.

6. DEAL – Airport industrial facility changes hands for $42.8 million.

Ares Management sold the 580,000-square-foot warehouse to TPG Capital, according to Triangle Business Journal. The building occupies 32 acres at 900 Aviation Parkway and was completed in 1985. The asset previously traded in 2014, when Pearlmark Real Estate Partners sold it for $26.9 million. The tenant roster includes Burt’s Bees, William M. Bird and McCollister’s Transportation.