Big banks that survived the recession have done very well, and CRE investors have noticed. Buyers National Financial Realty (NFR) and Oaktree Capital Management acquired 40 office buildings--eight in North Carolina, more than any other state--90% of which are leased to banking giant Wells Fargo.
NFR CEO Vincent Pellerito tells us it was the most complicated deal in my 22-year career but well worth it, since the deal fits with NFR's strategy of finding and buying properties leased to financial institutions--provided theyre high-quality properties with long-term leases. With this deal, LA-based NFR becomes one of the larger players in the niche of owning properties leased to financial firms. (We're coining a term for these bank groupies: "bankies.")Vincent also gave a shoutout to seller KBS, for doing "an excellent job maximizing value for KBS REIT I.
The partners paid $240M for the 3.4M SF portfolio, which they say represents a 50% discount to replacement cost. (Fair enough, since a third of this building appears to be missing.) Over a third of the portfolio, about 1.2M SF, is in North Carolina, including three properties in Winston-Salem (616k SF), a regional operations center in Raleigh (450k SF), and one smaller facility each in Burlington, Goldsboro, Smithfield, and Winterville. Pictured: the 188k SF 401 Linden St in Winston-Salem.
In a separate sizable office sale this week involving a bank-leased property, Honolulu-based Shidler Group acquired the Wake Forest University Charlotte Center building for $72.5M from Bank of America. Wake Forest occupies the first floor of the former International Trade Center, a 25k SF space whose renovation was completed last year by Rodgers. The rest of the 460k SF building is occupied by Bank of America, which inked a 10-year lease with options to extend as part of the sale.
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