CHARLOTTE, N.C. — A partnership between locally based Trinity Capital Advisors and Philadelphia-based Rubenstein Partners has purchased downtown Charlotte's NASCAR Plaza. The acquisition price was not disclosed, but the partnership purchased the debt and equity in the property, which is located at 550 South Caldwell St.
NASCAR Plaza has had a challenging time since its completion in early 2009. Its developer, an affiliate of Carmel, Ind.-based Lauth Property Group, filed for Chapter 11 bankruptcy shortly after the building's completion. Lauth then defaulted on its mortgage for the property and Wells Fargo & Co., the managing lender, initiated foreclosure proceedings.
The 20-story, 390,000-square-foot office tower has struggled to attract tenants. NASCAR is the building's anchor tenant, occupying approximately 120,000 square feet. It is joined by six other smaller tenants including the FDIC and the Charlotte Regional Partnership. However, approximately 60 percent of the building remains vacant. Trinity Capital and Rubenstein's purchase may just signal a turning point for the Class A trophy tower.
“In short, I think the asset may have had a stigma due to the financial distress of the previous ownership,” says Walker Collier, managing director of Trinity Capital Advisors. “It is important for prospective tenants to know that the new ownership group is very well capitalized and is poised to offer competitive lease deals..”
Collier hopes stable ownership and an aggressive leasing strategy will entice downtown and suburban tenants to consider the building. Local reports indicate that the previous ownership had been asking $27 per square foot for space in the building. According to Jones Lang LaSalle's fourth quarter office report, average the asking rate for downtown Class A space is $25.85 per square foot. Collier mentions the new asking rates for the building would be much more aggressive, as the submarket's 16 percent Class A vacancy rate means NASCAR Plaza faces competition from other towers.
“The downtown Charlotte office market has been slow over the last 18 months but has held up quite well considering the general economy, Wells Fargo taking over Wachovia, other challenges with financial institutions and the delivery of several buildings to the downtown market during all of this,” Collier says, adding that in the past 20 years only 2009 saw negative absorption in the market. He says that his company remains bullish on the city.
Trinity Capital's management affiliate, Trinity Partners, will manage the new building. CB Richard Ellis had been serving as leasing agent for the building prior to the sale. Colliers said that a formal decision had not been reached as to the broker's continued role, but he said that Trinity was pleased with how the firm has been handling the assignment.
— Coleman Wood