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HFF announces $55.55M sale and related acquisition financing of Palladian Corporate Center in Durham, North Carolina

01/22/2018

CHARLOTTE, NC – January 22, 2018 – HFF today announced that an affiliate of Innovatus Capital Partners, LLC (“Innovatus”) has acquired Palladian Corporate Center, which comprises two institutional Class A office buildings totaling 201,008 square feet in Durham, North Carolina, for $55.55 million.

The HFF team marketed the property on behalf of an institutional owner advised by Clarion Partners, LLC.  An affiliate of Innovatus purchased the asset free and clear of existing debt.  Additionally, working on behalf of the new owner, HFF placed acquisition financing with Citizens Bank.

Palladian Corporate Center is located at 200 and 240 Leigh Farm Road in an infill location within the South Durham submarket and adjacent to Interstate 40 along the Highway 54 corridor, which connects two nodes of the Triangle – Chapel Hill and Durham.  The park is proximate to both the University of North Carolina and Duke University in addition to the future light rail and some of Chapel Hill and Durham’s most distinguished residential communities and retail destinations.  Palladian I is a 100,462-square-foot building completed in 2005, with the 100,546-square-foot Palladian II completed in 2007.  Collectively 98.4 percent leased, the four-story buildings are home to a variety of tenants, including the corporate headquarters for AICPA, Northwestern Mutual and Eco-Site, LLC, and feature well-landscaped exteriors, attractive brick and glass facades, weekly scheduled food trucks and miles of adjacent walking trails.

The HFF investment advisory team representing the seller included senior managing director Ryan Clutter, senior director Scot Humphrey and director Chris Lingerfelt.

The HFF debt placement team representing the buyer included senior director Brent Bowman.

“Palladian Corporate Center offers a rare opportunity to acquire a best-of-class asset in the Raleigh-Durham market,” Clutter said.  “Few office assets of this quality and at the rents Palladian commands have traded in this economic cycle.  We are pleased to have found a sophisticated, knowledgeable buyer in Innovatus.  Given the strength of the Raleigh-Durham market, continued upward pressure on rents and no new construction in certain micro markets, we anticipate very similar pricing to transpire on many more assets in the area throughout 2018 and beyond.”

“Market participants have been waiting for a best-of-class suburban asset of this caliber to trade, and we anticipate other owners of newer assets will test the market in 2018 on the heels of this sale, as the capital markets environment is clearly embracing the Raleigh-Durham growth story,” Humphrey added.

This is the second acquisition in the Raleigh-Durham market for Innovatus, as they purchased two Class A office properties within Keystone Office Park in Durham, North Carolina, in March of last year.  HFF had closed the Keystone acquisition as well and arranged financing.

Holliday GP Corp. ("HFF") is a North Carolina licensed real estate broker.

About Innovatus Structured Credit Real Estate Fund 
Innovatus Structured Credit Real Estate Fund, I LP is an affiliate of Innovatus Capital Partners, LLC, an independent adviser and portfolio management firm with approximately $1.5 billion in assets under management.  Innovatus has a dedicated team of real estate investment professionals with deep experience in commercial real estate acquisitions, recapitalizations and asset management across core-plus and opportunistic real estate investments amongst all property types including office, retail, hotel, medical, industrial and warehouse.  The firm and its principals have significant real estate experience with ventures that range from the creation of a CMBS lending group and servicing platform to making equity investments in developments and single asset purchases.  The firm adheres to an investment strategy that identifies distressed, disruptive and growth opportunities in the less obvious market segments across multiple asset categories with a unifying theme of capital preservation, income generation, and upside optionality.  The Fund is currently focused on suburban office properties.  Further information can be found at innovatuscp.com.

About HFF
HFF and its affiliates operate out of 25 offices and are a leading provider of commercial real estate and capital markets services to the global commercial real estate industry.  HFF, together with its affiliates, offers clients a fully integrated capital markets platform including debt placement, investment advisory, equity placement, funds marketing, M&A and corporate advisory, loan sales and loan servicing.  HFF, HFF Real Estate Limited, HFF Securities L.P. and HFF Securities Limited are owned by HFF, Inc. (NYSE: HF).  For more information, please visit hfflp.com or follow HFF on Twitter @HFF.

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