307,780 SF First Union Tower Sold for $30M

The $30 million all-cash price equates to $97.47 per sf, an amount similar to the original hard construction cost of the 92%-leased building in 1983, Orange County tax records show. Orange County Property Appraiser Bill Donegan lists the taxable or market value of the property at $24.3 million or $81.08 per sf and places the estimated original cost of the structure's gross sf at $30.32 million.

Central Florida construction industry estimators tell GlobeSt.com the property's replacement cost today is about $150 per sf or an estimated $41 million, a figure that clearly shows the buyers netted a solid deal.

In a prepared statement, Robert Watman, Sterling's vice president/acquisitions, says the deal was done quickly. "The seller needed to close the deal by yearend [2002]," Watman says. "We got involved around Thanksgiving Day and instantly realized that to make this deal happen, it would have to be an all-cash transaction--financing would have to wait until 2003." The deal closed Dec. 27.

Watman says the new owners plan to give the building "a wake-up call by making capital improvements, aggressive marketing and operational economies." Continental Real Estate Cos. will co-manage the property. The building has about 40 tenants paying full-service rents in the range of $20 per sf to $24 per sf, according to the most recent surveys by local brokerage houses.

Besides Watman, the Sterling American team included Robert Bergman, vice president/commercial asset management; Greg Katz and Nicholas Philippides. Insignia/ESG negotiated for the seller.

DCC Constructors Inc. built First Union Tower for developer Clark Realty on a 13-month fast track in 1983. Architect George J. Haas designed the structure which was one of the tallest office buildings in the central business district when it opened in early 1984.

First Union Tower is expected to be renamed Wachovia Tower shortly to complement Winston-Salem, NC-based Wachovia Bank's acquisition last year of Charlotte-based First Union Bank.

Orange County real estate records show Hanover bought the building from Equitable Life Assurance Society of the United States almost immediately after it was built for $21.5 million or about $69.86 per sf, based on gross square footage.

Sterling American Property Inc. is a 30-year-old firm focusing on development, acquisition and asset management. Since 1991, its four real estate funds have invested in $2.1 billion in assets in 43 states, often with regional joint venture partners.