Preferred Apartment Communities acquires Charlotte offices for $209m
Preferred Apartment Communities has acquired Capitol Towers, a 477,704-square-foot office development located in the SouthPark submarket of Charlotte. The seller was Lincoln Harris, and the sales price was approximately $208.8 million.
The two newly constructed 10-story buildings feature a blue-chip tenant roster, anchored by investment-grade customers across a broad range of industries including specialty chemicals, financial services, banking and insurance. This acquisition increases the size of the company's office portfolio to seven operating assets totaling approximately 2.6 million square feet.
Charlotte once again gained national recognition as the city’s future continues to look bright, according to Cushman & Wakefield’s third quarter Charlotte office report. Earlier in the third quarter, Charlotte grabbed the number two spot on Business Facilities’ annual ranking report for economic growth potential beating out Denver and finishing behind Austin. All three cities are known for attracting a highly skilled, educated millennial workforce that is attractive to companies of all sizes.
Charlotte also is considered a leading hub for fintech startups, which has become a catalyst for Charlotte’s position in the No. 10 spot for startup growth. Year-over-year, Charlotte’s unemployment rate has decreased from 3.8 percent to 3.7 percent and is currently below the national average of 3.9 percent. During that same time frame, Charlotte has netted 36,700 jobs. Recent corporate announcements from firms such as Dentsply, AXA and Sitehands support the notion that high-paying job growth is anticipated to continue for the foreseeable future.
Since January, office investment sales in Charlotte have totaled $873.3 million, according to JLL’s third quarter office 2018 report. The market’s momentum from second quarter 2018 continued into third quarter 2018, with multiple class A buildings trading hands. Notable transactions in the third quarter include Lexington Realty’s sale of the AvidXchange campus to Davidson Kempner for $39 million and Beacon Partners’ sale of 500 E. Morehead St. to Zurich Asset management for $88 million. The latter was the second office building completed in 2017 to be sold in as many quarters, to go along with Portman’s sale of 615 S. College in second quarter 2018.
