Duke Energy Tower Uptown Charlotte

Childress Klein, CGA Capital Acquire Duke Energy’s Office Tower Underway in Uptown Charlotte

by John Nelson

CHARLOTTE, N.C. — Childress Klein and CGA Capital have partnered to purchase the Uptown Charlotte site for Duke Energy’s future office tower. Located at 525 S. Tryon St., the 40-story Charlotte Metro Tower project is set for a 2022 completion. Construction is currently underway.

Charlotte-based Childress Klein and Baltimore County-based CGA Capital have agreed to fully fund the development and construction of the project, which could total up to $675 million as per the purchase agreement with seller and future tenant Duke Energy (NYSE: DUK), an energy holding company based in Charlotte.

“We look forward to working with Childress Klein and its team to fund the creation of a dynamic office tower and a terrific new addition to the city skyline,” says Kyle Gore, managing director and principal of CGA Capital.

As part of the sale-leaseback agreement, the new ownership will enter into a long-term lease with Duke Energy at the tower upon completion. The development will span 1 million square feet of office and retail space and include a 1,100-space parking garage.

Nuveen, a TIAA Company, is leading a debt investment group to help fund the development. The project team includes general contractor Batson-Cook Co. and architect tvsdesign, which is designing the tower to attain LEED Gold certification.

Childress Klein was originally the merchant developer of the project on behalf of Duke Energy and will continue to serve as development manager. The firm has completed 14 projects in Uptown Charlotte to date, including One Wells Fargo Center, Duke Energy Center and Museum Tower.

CGA Capital is a privately held lender and investment firm focused on net lease property acquisitions and developments, debt and equity financing and sales and trading of lease-backed securities. The company won the bid to jointly fund and own the Duke Energy tower following a competitive process, according to a source familiar with the deal.

Duke Energy provides electricity to 7.7 million retail customers in six states. The company has approximately 51,000 megawatts of electric generating capacity in the Carolinas, the Midwest and Florida, as well as natural gas distribution services serving more than 1.6 million customers in Ohio, Kentucky, Tennessee and the Carolinas. The Fortune 125 company employs more than 30,000 people.

Duke Energy’s stock price closed on Monday, Dec. 23 at $90.15 per share, up from $83.91 a year ago.

The legal teams advising the principals of the deal include Ballard Spahr for CGA Capital, Parker Poe for Childress Klein, Hunton Andrews Kurth LLP for Duke Energy and Greenberg Traurig for the Nuveen-led debt investment group. Eastdil Secured advised Duke Energy in the sale-leaseback transaction.

— John Nelson

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