Alex. Brown Realty, Inc. Enters into Joint Venture with First Colony Property Company to Acquire Two Multi-Story Office Buildings in Raleigh, North Carolina
Contact: Tom Burton
Baltimore, MD (January 30, 2007) - Alex. Brown Realty, Inc. (ABR), a national real estate investment company, has entered into a joint venture with First Colony Property Company (First Colony) to acquire two multi-story office buildings in the Research Triangle Park submarket of Raleigh, North Carolina. ABR Chesapeake Fund III, a value-added real estate investment fund sponsored by ABR, provided an equity investment of $4.7 million to the venture. Equity capital was arranged by Rixey Todd of Estes Park Capital of Charlotte, North Carolina.
The two Class B office buildings are part of the Pinnacle Point Office Park, located adjacent to Raleigh's Research Triangle Park, off of Chin Page Road. The area around Pinnacle Park has enjoyed rapid growth since the development of nearby Briar Creek and the imminent completion of the I-540 interchange. The first building, located at 4400 Silicon Drive, is a three-story building consisting of 60,000 square feet on 6.4 acres. The second building, located at 4407 Silicon Drive, is a four-story building consisting of 80,000 square feet on 7.2 acres. Both buildings were constructed in the late 1980s as build-to-suit office buildings for IBM, and later, Renovo - which have been the only tenants in the two buildings. IBM vacated the 4400 building in November and Renovo will vacate the 4407 building by January 2007.
"Given the improving fundamentals we see in Raleigh's office market, the departure of IBM and Renovo offers a unique opportunity to reposition the property and add significant value," commented Craig Dranbauer, ABR's acquisition officer. ABR and First Colony will implement a $1.2 million interior and exterior renovation plan over the next seven months to enable the buildings to compete in the Class A office rental market.
Once the renovation is complete, the joint venture will focus its leasing efforts on tenants requiring at least 20,000 square feet of space. "Raleigh and the Research Triangle Park area continue to attract a significant number of corporate relocations and tenants in and around the park are expanding at a healthy pace," commented Neal Coker, First Colony's founder and CEO. "Large contiguous blocks of space will be difficult for such corporate tenants to secure in an environment of declining vacancies - we intend for Pinnacle Park to fill that niche."
This is the first joint venture between ABR and the Raleigh-based First Colony. "Our investment strategy revolves around finding good local partners who know their market," commented John Prugh, ABR's president and CEO. "Neal Coker has significant experience in this market. We look forward to leveraging his talent and knowledge to generate a strong return to our investors."
Alex. Brown Realty, Inc. (ABR) is a privately owned real estate investment manager organized in 1972 and headquartered in Baltimore, Maryland. ABR co-invests with joint venture partners in a broad spectrum of property types located throughout the United States. www.abrealty.com
First Colony Property Company (First Colony) is a closely held development company owned by C. Neal Coker. Coker is an active investor and real estate developer in the Research Triangle Park; Charlotte, North Carolina; and Nashville, Tennessee markets.