RTP campus leased to Lenovo sells for $127 million

A London-based real estate firm has acquired a 67-acre campus in Research Triangle Park that is leased by Lenovo for $127 million, according to Wake County property records.

An entity affiliated with 90 North acquired the campus, which contains two office buildings and 450,000 square feet, according to corporation records on file with the N.C. Secretary of State’s office. The seller was Philadelphia-based Rubenstein Partners and Grubb Properties, which paid just $26 million for the property in December 2013.

Dan Cooper, a partner with 90 North based in Chicago, declined to comment on the transaction on Friday.

The deal is the latest sign of how attractive so-called single-tenant, net leased assets have become to investors. Such properties are occupied by a single user that has signed a long-term lease.

In December, another such property, Citrix Systems’ downtown Raleigh headquarters, sold for $68.5 million, which set a Triangle office market record on a price-per-square-foot basis.

Lenovo’s RTP campus was once the corporate campus of Sony Ericsson. Lenovo last year signed a 13-year lease to occupy all 450,000 square feet on the campus. The company also plans to build an additional 30,000 square feet of office space on the campus.

Rubenstein and Grubb essentially gave Lenovo an allowance to make the renovations it wanted to the space. The campus is now home to the roughly 7,500 employees that Lenovo added when it acquired IBM’s low-end server business for $2.3 billion.

The Rubenstein-Grubb joint venture has been one of the more active – and successful – investors in the RTP area in recent years.

In 2012, the firm paid $4 million to acquire two buildings from GlaxoSmithKline in the Imperial Center office park in Durham. With its sale of the RTP campus to 90 North, the joint venture now owns one other asset in the Triangle: The Newcastle South building in Durham’s Imperial Center.

The exceptional return Rubenstein and Grubb earned on this latest deal had a lot to do with some fortuitous timing.

Rubenstein’s initial plan was to do no leasing in its first year of ownership, instead building a new lobby and making other renovations to make the campus more attractive. The company hoped to lease up the property and within three to five years put it up for sale.

But less than two months after Rubenstein and Grubb bought the campus, Lenovo announced plans to acquire IBM’s low-end server business.

Many of that unit’s employees are based in the Triangle, and Lenovo suddenly was in the market for a huge chunk of space.

This story was originally published February 13, 2015 at 3:07 PM with the headline "RTP campus leased to Lenovo sells for $127 million."