PrintKeystone's Gavaghan sells, looking to build
From Triangle Business Journal - April 27, 2007
Keystone's Gavaghan sells, looking to build
DURHAM - Developer Pat Gavaghan has sold the final three Keystone Park buildings in his portfolio to a Florida private investment group for $44.5 million.
Gavaghan's real estate company, Keystone Corp., sold the Davis Drive office properties to America's Capital Partners of Miami. The deal works out to a value of about $154 a square foot.
|
The buildings add to ACP's growing Triangle portfolio of properties. ACP purchased the Nottingham Hall, Berrington Center and Bradford Center buildings at the Imperial Center business park in Durham in early 2005 for $28.8 million. In December 2006, ACP paid $19.2 million for the TBC Place I and II buildings on Stirrup Creek Drive in Durham.
"We weren't looking for a buyer," says Gavaghan. "We've had several buyers call, write letters, make appointments, but we told everybody 'no.' Then ACP presented an offer that was reasonable, and we said 'no' to it too. So they gave us this number ($44.5 million), and I said, 'Not bad.' ... They wanted it more than I did."
The three Keystone Park buildings are the last of more than 20 office, flex and warehouse buildings that Keystone Corp. has built and sold since the late 1980s on land flanking Davis Drive on the southeast side of Research Triangle Park. The buildings total more than 5 million square feet of space, including the three office buildings with a combined 287,600 square feet. Office tenants include the Moore & Van Allen law firm, the Kennedy Covington law firm and Kowa Research. The buildings were almost 90 percent occupied during the fourth quarter of 2006.
The sale does not portend the exit of Keystone Corp.'s presence in the market. Keystone owns land within Keystone Park for two future office buildings totaling 140,000 square feet, and the company currently is building a 49-acre residential townhome community called Keystone Crossings at the southeast corner of the park. Keystone owns other property for residential development around the Triangle.
But the company is busy in another market. Keystone is building Keystone Pacific Business Park and a residential community in Patterson, Calif.
Gavaghan says he is looking for land for future development in the Triangle, but he hasn't nailed a deal yet. Keystone Corp.'s investors include Hong Kong textile businessman Vincent Fang and the Yang family of Raleigh.
Keystone will maintain management of the Durham properties on behalf of ACP - a deal that mimics the sales agreement Gavaghan made with Guggenheim Real Estate in January 2006, when Keystone sold 12 single-story office buildings at Keystone Park for $100 million. Gavaghan also crafted a lease on April 11 for his company's staff to continue occupying its space at 630 Davis Drive, according to Durham County records.
Greg Sanchez, president of Tri Properties, was not involved in the Keystone deal, but he says he has become familiar with ACP because his company kept the management and leasing duties for the Imperial Center buildings after ACP's purchase in 2005.
"They've always said they were going to grow in this market," Sanchez says. "They are sharp guys - very experienced and entrepreneurial."
Ben Kilgore with CB Richard Ellis in Raleigh represented ACP in the sales transaction.