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.

Marcus & Millichap closed the sale of BJ’s Wholesale Club, a 91,828-square-foot retail property located at 110 Longview Dr. in Bangor, ME, for $12,460,350. 

“We received serious interest in this deal from several institutional buyers,” said Adam Cohen, first VP investments. “In the end, we selected a buyer who owns multiple BJs locations nationwide and whom we knew would operate quickly and efficiently in closing this deal, which is exactly what they did.”  

Cohen and Brett Kilar, investment specialists in Marcus & Millichap’s Boston office, marketed the property on behalf of the seller and procured the buyer, a large nationally recognized REIT. Thomas Shihadeh is the firm’s broker of record in Maine. 

BJ’s Wholesale Club in Bangor sits on a 13-acre lot in the city’s primary retail corridor, near a 60-acre shopping center and national retailers such as Target, Lowe’s and Walmart. The property operates under a corporate-backed, long-term NN lease with rent escalations every five years.

After seeing its office occupancy boosted by continued demand for “lifestyle space,” Cousins Properties plans to deploy fresh capital for high-quality office assets. 

Cousins Properties’ Promenade Tower in Atlanta.

The Atlanta-based development and landlord REIT has one of the largest office portfolios across the Sun Belt and an 88.5% occupancy, up from 87.6% at the start of the year, Cousins President and CEO Colin Connolly said during its second-quarter earnings call. 

This demand, paired with a national lack of new office development, could lead to a rebalanced market, Connolly said, as reported by CoStar.

Cousins is now eyeing “compelling investment opportunities” externally, he said, adding that it plans to grow its leasing market share and boost occupancy to more stabilized levels. The REIT is open to opportunities including debt, structured transactions, joint ventures and property acquisitions, Connolly said.

“Our core strategy remains the same: invest in properties that already are or can be positioned into lifestyle office in our target Sun Belt markets,” he said. “Near-term accretion is also a priority.” 

A shortage of lifestyle office space in certain markets is not far off, Connolly said. 

“Tenants’ flight to quality and capital continue to differentiate the market, and while a broader office market recovery certainly appears to be underway, that is especially the case for lifestyle properties,” he said. “Cousins is well positioned to take advantage of the trend, and we’re beginning to see compelling investment opportunities.”

The occupancy gap is expanding between top-tier and non-prime buildings, according to CoStar data. The average vacancy rate in top-tier properties was less than 15% in the first quarter, while it was more than 19% in properties with fewer amenities or in less desirable areas. That creates a gap of about 4.5 percentage points, up from less than 2 percentage points in mid-2018. 

And Cousins is reaping the benefits. About 240K SF out of the 391K SF in signed leases reported for the second quarter were new or expanded, Executive Vice President of Operations Richard Hickson said. The lease growth helped boost Cousins’ Q2 numbers and marked its 41st consecutive quarter of positive rate increases, CoStar reported.

The overall office market remains plagued by a record amount of vacancy and an increased cost of financing, with the Fed yet to make any interest rate cuts. But Connolly said those problems are primarily in older buildings, and the “commodity office sector continues to struggle.”

“While some economic headwinds exist, we are encouraged by the improving fundamentals in the lifestyle office sector,” Connolly said.

Cousins has more than 19M SF of rentable office space in the Sun Belt, including markets like Austin, Charlotte and Tampa, Florida. The migration to the Sun Belt is a powerful tailwind, Connolly said. 

“We own the highest quality lifestyle portfolio and we have a fortress balance sheet with the lowest leverage among office REITs and great access to capital,” he said. “I’m excited about the opportunities ahead.”

Crew Campus Private REIT, a pure-play student housing REIT headquartered in Aliso Viejo, announced a performance fee waiver incentive program to benefit early investors. Following Crew Campus’ announcement in February of the acquisition of a 297-bed seed asset located near Baylor University in Waco, TX, investors are now poised to receive further benefits following changes to the offering and the launch of the incentive program.

“Investors who are accepted into the Crew Campus Private REIT during incentive periods will no longer be subject to the performance fee typically earned by the advisor,” said Jeff Daly, CEO of Crew Campus. “This Incentive Program fee waiver applies to the life of the investor’s investment; the original investment, as well as investments pursuant to the DRIP.”

Beyond the incentive program, Crew Campus is making the following changes to the offering in its most recent supplement: there will be no disposition fees associated with the sale of private REIT assets; the advisor’s performance allocation is being updated; and the minimum investment requirement is being reduced from $25,000 to $5,000.

Pictured: Oso Verde student housing in Waco, TX.

How are deals getting financed in today’s uncertain climate? On May 1, Connect Los Angeles 2024 brings together John Manning of MMCC, Gary Bechtel of Red Oak Capital Holdings, Felix Gutnikov of Thorofare and TR Hazelrigg, IV of Avatar Financial Group on the Financing with Debt Panel. Register now to hear from these industry experts. 

IPC Alternative Real Estate Income Trust, Inc., a publicly registered perpetual-life NAV entity focused on alternative property sectors, announced its operating partnership, IPC Alternative Real Estate Operating Partnership, LP, closed on the acquisition of four self-storage properties.

Two of the properties are located in the Atlanta metropolitan area, and the other two are in Montgomery, Alabama. In total, the self-storage properties comprise 2,275 storage units, including 1,810 climate-controlled units, covering 250,610 square feet.

The Operating Partnership acquired the properties through the acquisition of 100% of the beneficial interests in Self-Storage Portfolio V DST, sponsored by Oak Brook, Illinois-based Inland Private Capital Corporation.

The aggregate purchase price was $25.5 million, which is equal to the independently appraised value of the properties performed by a real estate valuation firm, less approximately $17.7 million in indebtedness secured by the properties.

San Clemente-based CareTrust REIT, Inc. (has purchased three continuing care retirement communities (CCRCs) located in Los Angeles, Orange, and San Diego counties for a total of $60.3 million. The multi-service senior living campuses include 475 assisted living, skilled nursing and memory care beds/units. All three facilities will be operated by Bayshire Senior Communities, an existing CareTrust tenant based in Southern California.

In the largest purchase, CareTrust acquired Torrey Pines Senior Living (pictured), a CCRC located in San Diego, for approximately $32.3 million. The Torrey Pines facility has been added to CareTrust’s existing master lease with Bayshire.

Acquisition of the other two CCRCs was completed through a joint venture arrangement entered into between CareTrust and a third-party regional healthcare real estate investor, with CareTrust as the managing member of the JV entity. CareTrust provided a combined common equity and preferred equity investment amount totaling approximately $28 million.

“Bayshire’s performance in our existing portfolio has demonstrated their focus on providing excellent care to their residents and patients and made us eager to help them add additional scale in Southern California,” said James Callister, CareTrust’s Chief Investment Officer.

Starwood Real Estate Income Trust and Morningstar Properties have formed a joint venture to invest in the “resilient” self-storage sector, according to a Tuesday release. 

The new entity will recapitalize 25 self-storage assets already owned by Morningstar funds and invest in additional assets to be operated under the Morningstar brand. The joint venture will look to buy both one-off assets and portfolios.

Self-storage is an attractive asset class for investors.

The existing portfolio includes 1.8M SF of storage space located throughout the Sun Belt region, “which is experiencing significant population, employment and income growth,” according to the release. 

“The sector’s stable cash flows fit well with SREIT’s yield and long-term hold objectives,” Starwood Capital Managing Director Ethan Bing said in a statement. “Morningstar is a best-in-class branded operator and this partnership provides immediate scale in a fragmented sector in addition to creating a platform for substantial growth.”

Starwood Capital Group is a Miami Beach-based behemoth private investment firm with $105B of assets under management with several REITS under its umbrella. Not to be confused with Starwood Property Trust — which trades on the New York Stock Exchange — Starwood Real Estate Income Trust is a nontraded NAV REIT whose portfolio, as of November, included $18.2B of assets across 334 properties. 

Not to be confused with Morningstar Inc. — a financial services firm that trades on Nasdaq — Morningstar Properties is a 40-year-old Charlotte, North Carolina-based firm that serves as fund manager, developer, owner and operator, with a focus on specialty properties across a dozen states. With its Morningstar Storage and Morningstar Marinas brands, the company manages 88 storage properties and five marinas, according to its website.

Starwood Real Estate Income Trust in November bought a multifamily housing portfolio consisting of 15,460 units in 62 communities across 10 states from San Diego-based Strata Equity Group. The REIT’s portfolio also includes hotels, industrial, office and other residential properties, as well as loans.