Office Sales are booming

 

From Raleigh News and Observer - April 30, 2007

 

Real Deals

Published: Apr 30, 2007 12:30 AM

Office sales are booming

Jack Hagel, Staff Writer
Investors, who spent a record amount on offices, warehouses and apartments in the Triangle last year, are on another record-setting pace.
At least $660 million was spent on the three property classes during the first three months of the year, according to data from CB Richard Ellis.
That is 37 percent of the $1.9 billion volume for the three sectors in all of 2006.
Most of it came from the $456 million spent on offices -- just 16 percent shy of the record total spent on offices all of last year. The figure was boosted by the $153 million sale of the Wachovia Capitol Center in downtown Raleigh. Even without that deal, the first-quarter total was 28 percent above the annual average over the previous 10 years.
"Sellers are realizing it's an opportune time," said Ben Kilgore, a CB Richard Ellis broker in Raleigh.
"Interest rates are low, cap rates are low, it's an improving office marketplace. ... I don't think we're near the end. There's a continued flow of capital. ... [Buyers] view the Triangle as a superior place to invest."
Pat Gavaghan, president of Durham-based Keystone, found that out this month when he sold three Keystone Park office buildings on Davis Drive for $44.6 million, or about $154 per square foot, to America's Capital Partners of Miami. "The money was just too good," says Gavaghan, who is pumping the money back into development in the Triangle and California.
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