A New York developer has acquired SkyHouse, the 23-story luxury apartment tower that opened in downtown last year, for a record $103 million, according to Wake County property records.
World Wide Group acquired the property from the development group behind the project, which includes Novare Group, Batson-Cook Development Company and local developer Gregg Sandreuter of Beacon Partners.
The price shatters the previous record for the most ever paid for a Triangle apartment complex on a per-unit basis. WWG paid nearly $322,000 per unit for the 320-unit SkyHouse tower.
This is the first time a Triangle apartment community has sold for more than $300,000 a unit. The previous record was the $272,000 a unit that Berkshire Property Group paid for its Berkshire Cameron Village community.
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The lofty price WWG paid shows that investors continue to view the Triangle apartment market as among the best in the country. Investors have shown a particular eagerness to pay top dollar for properties in urban areas where renters are willing to pay a premium to live.
The price is all the more impressive when you consider SkyHouse, which opened in April, is still leasing up. More than 80 percent of its units are now rented, according to the Downtown Raleigh Alliance.
“World Wide Group takes a long-term view to all of our real estate investments and we see a tremendous growth opportunity in Raleigh’s luxury marketplace,” David Lowenfeld, WWG’s chief operating officer, said in a statement.
WWG has developed more than $7 billion of real estate in New York City. The company’s investment in Raleigh is the latest example of how the Triangle is attracting large institutional investors who typically target properties in major gateway cities such as New York, Chicago and Los Angeles.
Restrictions in the deed hint that WWG may at some point look to convert SkyHouse from rental units to for-sale condominiums.
According to the deed, WWG is restricted from converting SkyHouse to for-sale condos until Nov. 11, 2021 without the prior written consent of the seller. The developer can, however, market the units as condos during the restrictive period and enter into contracts with prospective buyers.
If WWG desires to engage in efforts to convert the property before 2021 but after Nov. 11, 2018, the developer must pay the seller $1.4 million, according to the deed.
SkyHouse, which features a fitness center and a pool on the top floor that is 230 feet above street level, is the tallest all-residential building in the Triangle. It also includes 5,400 square feet of retail.
Novare has built a number of SkyHouse-branded high-rises in other cities, including in Charlotte, Austin, Texas, Orlando, Fla., Houston, Dallas and Atlanta.