Parkway Pays $100M for NASCAR Plaza in Charlotte

CHARLOTTE—Parkway Properties is acquiring NASCAR Plaza, 390,000-square-foot office tower  located in Charlotte’s Central Business District (CBD). A joint venture between Trinity Capital Advisors and Rubenstein Partners is selling the office tower for about $100 million.

"The purchase of NASCAR Plaza represents another off-market transaction that enables us to expand in one of our key, target submarkets with a high-quality asset,” says James Heistand, president and CEO of Parkway. “NASCAR Plaza has a strong tenant base and is the headquarters for several well-known companies, and we expect to create additional value through leasing and rent growth in a submarket that we believe will outperform during a recovery."

Built in 2009, NASCAR Plaza is a 20-story, LEED Silver certified office tower. The office building is adjacent to the NASCAR Hall of Fame and is the headquarters for NASCAR, which has leased 139,000 square feet through May 2021. The building is 88% leased with an average in place rent per square foot of $25.61.

The Charlotte CBD submarket is posting improving fundamentals, with positive net absorption of 234,000 square feet in the third quarter, according to CBRE. The Charlotte CBD submarket also posted saw a 150 basis points decline in direct vacancy from the previous quarter to 9.8%.

Parkway expects NASCAR Plaza to generate a 2013 estimated cash net operating income yield of approximately 7%. Parkway will own 100% of the asset and plans to assume the first mortgage secured by the property, which has a current outstanding balance of about $42.3 million with a current interest rate of 4.7% and a maturity date of March 30, 2016.

Parkway said it intends to amend and restate the loan upon assumption to current market terms. Closing is expected by the end of the fourth quarter 2012 and is subject to customary closing conditions. Parkway intends to fund its share of equity using excess cash and borrowings from its revolving credit facility.