A New York real estate investment firm has completed its acquisition of downtown Raleigh’s Wells Fargo Capitol Center and plans a multimillion-dollar renovation in the coming year.
HighBrook Investors purchased its third and final share of the building in December and now owns the entire 30-story office tower, according to Wake County property records. The company said Wednesday it plans to build an outdoor plaza for concerts and public events, and to add improvements inside the building for the tenants, to be completed in the first quarter of next year.
Once refurbished, the office will have a “brand new look and vision,” said J.D. McNeil, leasing director for Spectrum Properties, which handles leasing for HighBrook.
The building will continue to be named Wells Fargo as part of the lease agreement with the bank that occupies the lobby, McNeil said.
As part of the deal HighBrook also acquired the Alexander Square Parking Deck across the street from the office tower.
The office tower has been struggling in recent years and is currently about 70-percent occupied in a market where 95-percent occupancy is considered stable. In recent years the office has lost a number of major corporate tenants, including the Parker Poe and Womble Carlyle law firms, as well as financial services firms Merrill Lynch and KPMG.
McNeil said currently five floors in the building are vacant with unoccupied sections on other floors as well. HighBrook is leasing space for $28 a square foot in the lower half and $29.50 a square foot in the upper half, well below the going rates in the low-to-mid $30s per square foot for prime commercial real estate in downtown Raleigh and North Hills.
HighBrook defines its specialty as managing “previously underperforming income-producing property investments.” HighBrook finances properties that “typically require speed, flexibility and substantial capital infusions,” the company’s web site says.
A call to HighBrook investor relations associate Meghan Searson was not returned.
The Wells Fargo building had been owned by several dozen real-estate investors known as tenants-in-common, or TICs. Tenancy-in-common allows investors to own partial interest in a single property that they can pass on to beneficiaries of their choice. HighBrook has been acquiring shares annually of the Wells Fargo tower, making three consecutive annual investments every December in 2014, 2015 and 2016.
The office was built in 1990 and remodeled in 1998, according to Wake County property records.