Raleigh REIT Closes On $230M Office Tower in Charlotte
A 24-story office building in Charlotte has changed hands.
Highwoods Properties Inc. acquired 6Hundred at Legacy Union, a 411K SF office tower in Charlotte, from Lincoln Property Co. for $230M, according to Charlotte Business Journal, citing Mecklenburg County property records.
This acquisition, which closed Wednesday, boosts the Raleigh-based REIT’s portfolio at Legacy Union — a multibuilding development — to 1.6M SF of trophy office space.
Earlier this year, Highwoods acquired Legacy Union’s 14-story, 1.1M SF parking garage at 720 S. Church St. for $110M. The garage encompasses 3,057 parking spaces.
Highwoods now has three buildings at Legacy Union and eight overall across Charlotte.
Currently, 6Hundred is 84 percent leased with an average lease term of over 12 years. Tenants include American Express, law firm Robinson Bradshaw and Pike Corp.
With the sale, Highwoods plans to invest $8.5M for both near-term building improvements and leasing capital expenditures to stabilize the property’s occupancy rate.
Under the agreement, Dallas-based Lincoln was reportedly scheduled to receive some $15.7M credited for free rent and other leasing-related expenses it provided before the building shifted ownership.
Highwoods projects to stabilize occupancy at the tower by 2027 and will realize $17.5M to $18.5M in net operating income annually at that point.
The 6Hundred property is connected to the Highwoods-owned Bank of America Tower and SIX50 South Tryon.
Highwoods is a publicly traded REIT that owns, leases and manages properties in several business districts across the Southeast.
Charlotte’s office building market has been “entering a new phase of stability,” according to a recent Colliers market report, with long-term tenant demand rising. As reported by Savills Research, Charlotte leased 1.3M SF of office space in Q3, marking its strongest quarter of leasing volume in five years.
