The developers of a planned 15-story uptown office building are getting a $18.7 million boost from a California real estate investment manager and adviser.
Buchanan Street Partners of Newport Beach, Calif., said it will become an equity investor in 440 South Church Street with Novare Group Holdings and Trinity Capital Advisors.
Steve McCarthy, managing director of Buchanan Street's Atlanta office, said uptown Charlotte is one of the nation's strongest office markets.
A center city vacancy rate of less than 1 percent combined with projected rental growth of nearly 7 percent through 2008 "make for a solid investment environment," he said.
Trinity Capital Partners plans to break ground in mid-April and finish the 363,000-square-foot building by August 2009.
It's part of a 5.2-acre mixed-use project on the old Power Building block at South Church between First Street and Martin Luther King Boulevard.
The offices will dovetail with Catalyst, Novare's 27-story condo tower under construction. The condo building and office tower will share a 1,208-space parking garage. Novare also plans a hotel/residential tower named TWELVE Hotels & Residences on the site.
Trinity Capital Partner's Gary Chesson said bringing in another investment partner helps the development team "capitalize more conservatively" in an uncertain real estate lending climate.
More equity and less borrowed money impresses lenders.
The $78 million office building will be among five to be completed in the center city over the next few years.
It's expected to be the second to open, behind the 20-story NASCAR Plaza due in March 2009 near the Charlotte Convention Center.
Being one of the first Class A, multi-tenant buildings available should help Trinity capitalize on pent-up demand, which has forced some would-be uptown tenants to lease temporary space in the suburbs.
In addition, Chesson said, 440 South Church Street is part of a development shift toward South Tryon with the Wachovia office/cultural development under way at Tryon and Stonewall streets and a public park and minor league baseball stadium planned in Third Ward.
He believes the building is in a desirable location for businesses seeking to be near two of uptown's largest employers -- Wachovia and Duke Energy.
Trinity Capital is constructing the tower on speculation without a signed tenant. Trinity Partners, a Trinity Capital affiliate, will lease and manage the building.
Office space will rent for $29.50 a square foot annually, which Trinity Partners' Peter Conway believes will be the lowest among the new office towers.
The developers say they are able to charge less because constructing a parking garage adjacent to the building is quicker and less expensive than putting parking underground.
Karnes Research Co.'s most recent market report pegged the average annual rate for all classes of office space uptown at $25.18 a square foot.
Conway said the developers plan to grant naming rights for the building to the first tenant signing a lease for at least 100,000 square feet.
Plans call for a fitness center for tenants on the second floor and 7,300 square feet of shop and restaurant space on the ground floor. Chesson said the goal is to sign a signature restaurant.
Atlanta's Smallwood, Reynolds, Stewart, Stewart & Associates designed 440 South Church Street. Bovis Lend Lease is the general contractor.
DEVELOPMENT Doug Smith
