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Feb. 8, 2013

KBS Realty Acquires Iconic Building in Suburban Raleigh for $98.4M

by Adriana Pop, Associate Editor

On Jan. 31, a joint venture partnership between Indianapolis-based real estate investment trust Duke Realty Corp. and Raleigh-based real estate development firm Kane Realty Corp. sold the 17-story Captrust Tower in the city’s North Hills area. KBS Realty Advisors of Newport Beach, Calif. acquired the approximately 300,000-square-foot property for $98.4 million, or nearly $326 per square foot.

Developed in 2009, the LEED Gold-certified high-rise at 4208 Six Forks Road offers 275,630 square feet of office space, 26,813 square feet of retail space and a six-level parking deck. The property is 95 percent leased to 18 companies, including Captrust Financial Advisors, the American Board of Anesthesiology, CBRE, Regus, RBC Capital Markets and other national and regional tenants.

“Captrust Tower is the best project in Raleigh and has leased faster and at higher rents than any other office project,” said Charles Schreiber, CEO of KBS Realty Advisors.  “We’ve been focused on Raleigh and specifically Captrust Tower due to the quality master-plan and the maturity of the mix of uses already in-place and planned.”

According to the Triangle Business Journal, the tower’s advertised lease rate for office space is $31.95 a foot per year, the highest rental rate of any non-medical office property in Wake County.

Kane Realty will continue to have an ownership interest in the project through the 4208 Six Forks Road LLC joint-venture formed with KBS. Kane will also be in charge with the building’s leasing and management activities.

The sale of the Captrust Tower is part of Duke’s strategy of divesting suburban office assets, while increasing its industrial and medical office portfolio. The company’s long-term goal is to have 60 percent of its holdings in industrial, 25 percent in office and 15 percent in medical office properties.

In the Triangle region, KBS owns three other buildings totaling nearly 250,000 square feet of space in the Crescent Green office park in Cary, as well as the 127,000-square-foot Colonnade One office building on Six Forks Road in North Raleigh.

Photo credits: FoxDon via Wikimedia Commons