CARY, NC-Transwestern Investment Co.’s latest fund is the new owner of a 375,000-sf office development here as well as an adjacent nine-acre land parcel. The two class A office buildings were 73% leased at the time of sale, according to the Chicago-based private company’s vice president Ross Cowan.Cowan declined to reveal the seller or the sale price. According to county and state records, the seller was an LLC of Raleigh, NC-based Grubb Properties, which Transwestern says is its joint venture partner in the acquisition. A clerk in the Clark County records department could not discern a sale price because it did not appear that Transwestern paid any excise tax on the transaction, but records do indicate that Transwestern assumed a $27 million loan as part of the transaction. The combined assessed value of the two office properties is about $40.4 million, while the developable land parcel is valued at $2 million.The properties are located in Regency Park, a major suburban mixed-use development just off Highways 1 and 64 in Cary, where average office vacancy is about 25%. One of the assets acquired, a 267,000-sf building at 11000 Regency, was built in 1985 for IBM by Regency Park Corp., which is owned and managed by Montreal natives Edward Woolner and Eric Salomon. When IBM vacated the building in the early 1990s, Regency Park Corp. sold the building to Grubb Properties, which built the second, 115,000-sf office building in 1998. It is called 9000 Regency.Transwestern has a 19 million-sf portfolio of office and industrial buildings. Its latest fund, Aslan Realty Partners II LP, is a value-add discretionary real estate investment fund. Cowan tells the hope is to make cosmetic improvements to the Regency Park assets — “put on some fresh lipstick,” he says — and, with the help of improving fundamentals in the greater Raleigh market, stabilize occupancy over the next three- to five years. With regard to the land parcel, Cowan says it could hold about 125,000 sf of building, but there are no plans for development.”Obviously in today’s market we wouldn’t do much,” he says. “But as tenant demand comes back, we will have the ability to expand a tenant into a new building, most likely through a build-to-suit arrangement.”Transwestern will have competition that whatever build-to-suit tenants come along. Regency Park Corp. recently announced plans for a new office building at the mixed-use development. The $48-million project would be a 10-story, 281,000-sf building with an attached 290,000-sf parking garage. The project, 1111 Regency, is expected to gain approval from the town council this summer, at which point the developer would have up to two years to start construction without having to file new site plans and repeat the approval process. No tenants have been signed for the building. Regency Park Corp. has long-term plans for up to three additional buildings within the 700-acre office park, according to published reports.

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