Located at 400 S. Tryon St., the 32-story building is occupied largely by Duke Energy, which signed a new 10-year lease in June 2003. By 2006, local sources tell GlobeSt.com that Duke will lease 86% of the building. The federal government leases another 65,000 sf in the building through 2014, according to local sources.
All told, the building houses six tenants on long-term leases, says Mark De Riemer of Jones Lang LaSalle's Capital Markets Group, which represented Equity Office in the transaction. De Riemer, who was assisted in the transaction by Noble Carpenter and Ricardo Alburez, says the asset drew strong investor interest that included "several Canadian, European and Middle Eastern institutional and entrepreneurial players."
Local brokers estimate the capitalization rate on the investment at "well below 10%." If the recorded sale price represents an 8% cap rate, the fully leased building would have to generate an average triple-net rent of about $8.30 per sf per year for 12.5 years.
With the sale of Wachovia Center, Equity Office has exited the Charlotte market. "Our primary business strategy is to own high-quality office buildings concentrated in major metropolitan markets, and to create and realize the benefits of scale for our customers, shareholders and employees," says Equity president/CEO Richard Kincaid. "Our investment strategy includes the disposition of assets we feel do not contribute to the achievement of these objectives."
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