Real Deals

Real Deals: Future of struggling RTP office park remains unclear after auction

dbracken@newsobserver.comJuly 31, 2013 

It’s time to provide status updates on two Triangle properties that were put up for auction in recent months.

It’s been nearly two months since GE Asset Management stopped soliciting bids for the nearly empty Park Center office park that it owns in Research Triangle Park.

The auction, scheduled for June 6, was expected to be an early gauge of investor interest in the ambitious redevelopment plans for RTP that were unveiled last fall.

The 70-acre Park Center is one of three areas where future redevelopment efforts in the park are likely to be focused, and finding a new owner for the property would represent progress in that effort.

Although GE this week declined to comment on the results, the fact that no buyer has been announced means the auction probably didn’t go as planned. That the bids may have been sparse and underwhelming is both disappointing and not all that surprising.

While the Triangle has become a magnet for deep-pocketed investors in recent years, finding a buyer for Park Center was always going to be a challenge.

The buyer would have to take over a ground lease with the Research Triangle Foundation, the entity that manages the park. The lease runs through 2049.

And any redevelopment of the property would likely have to be done in concert with the foundation, which last fall unveiled its ambitious new master plan for the 7,000-acre park.

“It’s a very complicated deal,” said Ben Kilgore, a CBRE investment sales broker in Raleigh. “It has a lot of moving pieces.”

GE, which paid $65 million for the property in 2002, was never going to get anywhere near that amount given Park Center’s current condition. Only about 10 percent of the center’s 722,556 square feet of office space is leased, and many of the nine buildings will need extensive renovations if they’re not torn down.

But Park Center remains a vital piece if RTP hopes to deliver on its promise of adding more amenities to the park.

Manor Six Forks sold to Mass. company

Manor Six Forks, the Raleigh apartment complex that was foreclosed upon and then auctioned off in March, has changed hands again.

The 298-unit complex and retail center at the corner of Atlantic Avenue and Six Forks Road was sold for $30.9 million this week to Aspen Square Management, a Massachusetts company, according to Wake County property records.

To put that sale price in context, here’s a recap of the Manor Six Forks story:

Last summer, Lenox Mortgage XVII LLC, a Massachusetts investor, acquired the note on the property at auction for $30.3 million. At another auction in March, Lenox made a stalking horse bid of $37.1 million, which meant that any rival bidders had to submit a cash bid of at least $37.2 million. None did, and Lenox ended up taking ownership of the property and then assigning the purchase and sales agreement to another Massachusetts company, the Deancurt Realty Group, according to property records.

This week’s sales price is well below both what it cost to build the complex, and the nearly $50 million in claims that were against the project when it was in bankruptcy.

Bracken: 919-829-4548

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