Dealmaker: Raleigh, N.C. Office Tower Changes Hands for $138M

Preferred Office Properties, Atlanta, acquired CapTrust Tower in Raleigh, N.C., from KBS, Newport Beach, Calif.

Triangle Business Journal reported Preferred paid $137.7 million for the 300,000-square-foot office asset KBS has owned since 2013.

Located in Raleigh’s North Hills submarket, the 16-story property includes nine levels of office space atop a six-level parking podium and ground floor retail. It is currently 100 percent leased with more than seven years of weighted-average term remaining under the leases.

Kane Realty Corp., Raleigh, developed the tower in 2010 and will continue to lease and manage the building.

Preferred Office Properties President and CEO Boone DuPree called Raleigh a strategic market for the company. “This ‘core’ profile acquisition grows our local presence and offers entry into the high-performing North Hills submarket,” he said, noting the acquisition increases Preferred Office Properties’ portfolio to nearly 2.9 million square feet. The company financed the acquisition with a 10-year non-recourse first mortgage from John Hancock, Boston. 

The CBRE team that representing KBS in the sale included Executive Vice Presents Ben Kilgore and Patrick Gildea and Vice Chairman Will Yowell.

The Raleigh-Durham office market opened 2019 with a strong quarter of positive absorption, marking the sixth consecutive quarter of positive net absorption, CBRE reported.