RALEIGH, N.C.-In a sign that investors are looking beyond gateway cities for office investments, two towers in the Durham have traded. 4820 Emperor Boulevard and Nottingham Hall set the stage for a potentially busy Triangle commercial real estate market in 2011.
“Institutional capital isn’t considering only top tier cities like D.C. and New York anymore,” Paul Collins, executive managing director at Cassidy Turley, tells GlobeSt.com. “These two trades signal that people feel better about the economy, so they are looking at other cities to find yield and they feel like this is a pretty safe area. There is demonstrable employment growth and it’s a good time to get into these cities before all the other institutional capital jumps in.”
Cassidy Turley brokered the sale of 4820 Emperor Boulevard, a recently-constructed, 259,531-square-foot, LEED Silver, trophy asset in Durham. 4820 Emperor Boulevard is an 11-story landmark office tower, the tallest building along I-40 between Wilmington, N.C. and Nashville, TN. Paul Collins, Bill Collins, Drew Flood, Jud Ryan, and James Cassidy of Cassidy Turley represented the seller, Principal Real Estate Investors, LLC. Terms of the deal were not disclosed.
Meanwhile, Nottingham Hall, a 105,363-square-foot office building in Durham, traded for an undisclosed amount. Nottingham Hall is a class A office building located at 4505 Emperor Boulevard in Durham’s Imperial Center business park, a 456-acre planned mixed-use development located at the intersection of Interstate 40 and Page Road. Collins, Bill Collins, Flood, Ryan, Cassidy, David Finger, and Hillman Duncan of Cassidy Turley represented the seller, American Real Estate Partners.
“I think we’ll see more institutional sales in cities like Raleigh in 2011,” Collins says. “We really haven’t seen much happening in cities outside of New York and D.C. and all of the sudden here in the first two months of the year we have two institutional quality sales. Later this month, we’ll have an other institutional quality asset to talk about.”
The Triangle office market ended 2010 on a positive note with vacancy falling by 60 basis points and enough activity to send net absorption slightly into the black for the year, according to Grubb & Ellis. In Durham, where these towers are located, positive absorption caused vacancy to fall by 120 basis points. With almost no construction scheduled for delivery in 2011, Grubbs predicts increased demand will result in a sustained trend of falling vacancy.
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