NY firm buys Research Tri-Center warehouses for $76.95 million

June 7, 2010

June 7th, 2010
News & Observer .biz

In the latest sign of investors strong appetite for high-profile commercial real estate in the Triangle, a private New York real estate investment firm has paid $76.95 million for the Research Tri-Center buildings in Durham, according to Durham County property records.
The Triangle warehouse vacancy rate was 15.3 percent in the first quarter, up from 9.8 percent during the same quarter a year ago, according to Karnes Research.
The warehouse vacancy rate in the I-40/RTP submarket stood at 11.4 percent in the first quarter, up from 9.9 percent a year ago.

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BofA grabs bigger piece of tower

May 28, 2010

May 28th, 2010
The Charlotte Business Journal

Bank of America Corp. has taken its new, 32-story uptown office tower off the market and plans to fill all but 5% of the space with its own employees…The bank had been marketing up to 267,000 square feet for lease through real estate firm Lincoln Harris. And it has leased about 30,000 square feet to tenants that include private-equity firm Pamlico Capital….

At the end of the first quarter, the vacancy rate in Charlotte’s uptown office market stood at 12%, up from 3.2% a year earlier and 8.8% at the end of 2009, according to Karnes Research Co. Andrew Jenkins, a managing partner at Karnes, had forecast uptown’s vacancy rate to exceed 13% with the delivery of 1 Bank of America. Barring any significant new vacancies uptown, the bank’s decision will keep the vacancy rate around 12%, he says.

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Developer taps Clemmons for speculative office space

April 23, 2010

April 23rd, 2010
The Business Journal of the Greater Triad Area

A developer seeks to fill what he sees as a shortage in the market for affordable office space west of Winston-Salem with the construction of two office buildings on Commercial Park Court, just off Ramada Drive on the south side of I-40.

PTX Commercial has received two building permits worth a total of $1.8 million for the project. Davie Construction Co. is the general contractor. PTX President C.J. Sadosky Jr. said the larger of the two neighboring buildings will be 26,000 square feet and the smaller 6,000 square feet. The lay of the lot requires two separate structures rather than one larger one, he said. PTX will use some of the space itself and offer the rest for lease. He hopes to have the project completed in the fourth quarter of this year.

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Office shuffle: Tenants taking advantage as leases expire

April 23, 2010

April 23rd, 2010
The Business Journal of the Greater Triad Area

Office brokers around the Triad say their phones are ringing a bit more these days. While most of the calls are from companies in search of a better deal on a lease, brokers welcome the activity as the recession continues to take its toll on the office market. “They aren’t big deals, or even groups looking to open up new businesses, but companies looking for options,” says J.J. Joubran, executive broker for Essa Commercial Real Estate in Greensboro. And there are a lot of options to be had.
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Spaced out: Triad’s industrial market saturated, with Dell-uge to come

April 23, 2010

April 23rd, 2010
The Business Journal of the Greater Triad Area

When it comes to industrial space, the Triad is seriously overstocked. And things will likely get worse before they get better, with the potential for more than 1 million square feet of space to be vacated by year’s end as Dell Inc. closes its Winston-Salem plant and the ripples spread to its suppliers. At the end of 2009, the overall industrial vacancy for the Triad was 21.7 percent, up slightly from 21.2 percent a year earlier, according to the Karnes Industrial Report, compiled on behalf of the local Realtors associations. Brokers generally consider the market to be in fair balance when vacancy is between 8 percent and 12 percent.
Average rental rates slipped from $3.96 a square foot at the end of 2008 to $3.93 at the end of 2009, falling for the second straight quarter. Rates were at $4 a square foot before the recession.
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Slow economy tests property managers’ skills, fortitude

March 19, 2010

March 19th, 2010
The Business Journal of the Greater Triad Area

Managing commercial real estate is a balancing act even in the best of times — keeping the building profitable for its owners while providing enough services to keep tenants happy — and renewing their leases.

But that balance gets even trickier in a commercial real estate market such as this one, with tenants shopping around for better deals and owners worried about making their next mortgage payment.

Across the Triad, office vacancies were at 19.2 percent during the fourth quarter of 2009, up from 18 percent a year earlier, according to the Karnes Triad Office Report, which tracks the commercial market for the local Realtors associations.

During that time, an additional 200,000 square feet of office space became available. The average asking rent remained relatively steady at $15.80 per square foot, up a nickel from a year earlier. While that may be the asking rent, brokers say most owners are willing to negotiate.

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Burlington Square Mall finds buyer

March 2, 2010

March 2nd, 2010
The Business Journal of the Greater Triad Area

A group of local investors is planning to buy the long-struggling Burlington Square Mall and turn it into a mix of retail and office space.

Holly Hill Mall LLC, led by local investors David Morton, Clark Lindley and Chad Sharpe, will close in the next 45 days on more than 415,000-square-foot mall, which is in receivership after it went into foreclosure in 2008, said David Morton, owner of Dave’s Discount Furniture.

The company plans to pull in tenants with below-market rents. The group is also planning start soon on renovations to the mall, including improving the exterior of the Belk and Sears stores, relandscaping, and redoing the parking lot, lighting and signage.

He declined to give specific rates, but said “we’re going to be at least 60 percent less than what everyone else is charging, and the mall we have is gorgeous.”

A third-quarter 2009 report from Karnes, which tracks commercial space for the Greensboro, High Point, Winston-Salem and Burlington commercial Realtors alliances, the average retail rent rate in Alamance County was $10.70 per square foot.

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Retail bust: Shopping center construction slows to a crawl in the Triad

February 19, 2010

February 19th, 2010
The Business Journal of the Greater Triad Area

The explosion of shopping centers across the Triad in recent years appears to be fizzling out.

Observers say there are three main causes: tight lending restrictions, high vacancy rates in existing properties and reluctance by major retailers to add sites.

During the third quarter of 2009, the most recent data available, there was about 6,000 square feet of retail space under construction in the Triad, according to research by Karnes, which tracks the commercial real estate market for the local Realtors associations. To put that in perspective, the average grocery store is about 47,000 square feet.

By comparison, during the third quarter of 2008, more than 325,000 square feet of retail space was under construction locally. And for the same quarter in 2007, at the height of the retail boom, more than 1 million square feet of space was under construction.

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Industrial sector builds despite high vacancies

October 17, 2009

Among Charlotte-area warehouses and distribution centers, vacancy rates are rising. Rents are falling. Yet two local developers are betting now is the time to build more than 300,000 square feet of new industrial space…Charlotte’s industrial market has fared relatively well during the recession compared with the office and retail markets because developers didn’t overbuild, said Karnes analyst Andrew Jenkins. One reason is developers grew cautious when industrial vacancy rates peaked at 19.2 percent in 2003, Jenkins said, “scaring everyone into being careful where they built.”
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Waxhaw may get new mix with a town center project

September 19, 2009

September 19, 2009
Charlotte Business Journal
A Matthews developer may do something next year that has been rarely accomplished in the Charlotte area in this economy: Start construction of a mixed-use commercial center…Having Waxhaw sign on to the project may be the key to finding financing, says Andrew Jenkins, managing partner of real estate analysis firm Karnes Research Co. in Charlotte. Such an agreement “would ultimately be the main draw for the project,” he says. The Commons at Wesley Chapel, a commercial center with a Target store, may provide competitors for small shops, Jenkins says.
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