A Triangle area company that seems to have a nose for real estate deals is back in the Charlotte market with another acquisition.
The Dilweg Cos. of Durham acquired the 38-year-old, 110,000-square-foot Park Abbey building at 4600 Park Road late last year for about $11.5 million.
Now, as its $1 million renovation of the five-story structure progresses toward a mid-summer finish, real estate investors are watching and wondering: what did Dilweg see in that market that others missed?
No wonder they're curious.
The company's first acquisition outside the Triangle was the purchase in 2003 of SouthPark's 6101 Carnegie Building for $14.9 million. Three years later, the building sold for $21.3 million.
In 2004, Dilweg scored even bigger. It bought the Power Building, then occupied by Duke Energy, for $8 million. Two years later, the vacant building and land sold for nearly $17 million to Novare Group, whose Catalyst condo tower is under way there.
The value of the site shot up after plans for a nearby Third Ward park and minor-league baseball stadium began to jell.
Dilweg was attracted to the Park Road area by what appears to be a tightening of office space from uptown southward to the Ballantyne area, said Zach Ashton, director of acquisitions.
He said the Park Abbey building is similar in age to the Park View building in SouthPark, where average lease rates are nearly $24 a square foot compared with just under $17 a square foot in the Park Road area.
"It looked like a good opportunity to have a nice, quality building below the going rates of a similar age building in SouthPark," Ashton said.
The Park Abbey building is about 44 percent occupied following the departure of a major insurance office tenant.
Dilweg can turn that into a positive by offering about 60,000 square feet of contiguous space on floors three, four and five to a single tenant, said Chase Monroe of Keystone Properties, which is handling building leasing and management.
Such a large block of space near the urban core could attract investors and capture overflow tenants from the extremely tight uptown market, he said.
The Park Road area has only nine multi-tenant office buildings totaling 690,000 square feet, according to Karnes Research Co.
But it's considered a desirable office market because of its proximity to housing and the shopping, dining and entertainment amenities of ParkTowne Village, Park Road Shopping Center and SouthPark mall.
Anthony Dilweg, a former Duke University and Green Bay Packers quarterback, founded The Dilweg Cos. in 1997 with partner Michael Hemmerich.
Dilweg couldn't be reached, but the company's Web site spells out his strategy:
"We carefully select assets with potential, cultivate them and generate exceptional returns. On average, our properties have sold within 28 months and have generate an annualized internal rate of return in excess of 20 percent for our investors."
Dilweg's Park Abbey improvements include repainting and enhancing the building's exterior, installing a new heating-air conditioning system and remodeling first floor common areas.
Keystone is quoting an annual lease rate of $18 to $19 per square foot for office space.
Keystone's Win Kelly is handling leasing with associate Chris Schaaf. Associate Craig Garrison manages the property.
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