EastRidge at Perimeter Park
Case Study Morrisville and Raleigh, NC
Location
Morrisville and Raleigh, NC
Sector
The Property(s)
EastRidge at Perimeter Park, Morrisville, NC
Eight-Building 40-Acre Industrial/Office Campus totaling 478,563 SF, representing 75% of the portfolio, located at the center of the Research Triangle/RDU submarket. 75% leased to 13 tenants at the time of sale.
Spring Forest Business Center, Raleigh, NC
Three-Building Flex campus comprising 25% of the portfolio. Located along US-1/Capital Boulevard in North Raleigh and convenient to I-540 and the Triangle Town Center Mall. 95% leased to 10-tenants at the time of sale.
Spring Forest Business Center
Project Brief
Arranged the JV equity placement for the Buyers to acquire this two-property, Office/Industrial Flex portfolio, comprising 11 single-story buildings totaling 634,617 square feet, located in Raleigh NC. At the time of sale in April 2016, this represented the largest Office/Industrial transaction year-to-date in the Triangle. The portfolio was 83% leased to 24 tenants at the time of sale, representing a Value Add Opportunity.
Challenge
Portfolio was 83% occupied at the time of sale with EastRidge, the largest component, only 75% leased.
Properties were only 61% occupied when Seller, Lonestar, acquired them in 2013 out of foreclosure. Hence, the properties had a former Troubled Asset reputation.
Lonestar structured ownership as a non-traded “Baby Reit”. Consequently, the acquisition required acquiring the REIT which created a challenge to identify an equity source that was willing to contribute on this basis and collapse the REIT post-closing.
Outcome
Identified an Equity Placement we were able to identify a JV Equity partner that recognized the upside potential and the ability of our client to execute a strategy to Add Value and attain returns in excess of their expectations.