Investors Buy Big NC Bank Portfolio

Big banks that survived the recession have done very well, and CRE investors have noticed. Buyers National Financial Realty (NFR) and Oaktree Capital Management acquired 40 office buildings--eight in North Carolina, more than any other state--90% of which are leased to banking giant Wells Fargo.

NFR CEO Vincent Pellerito tells us it was the most complicated deal in my 22-year career but well worth it, since the deal fits with NFR's strategy of finding and buying properties leased to financial institutions--provided theyre high-quality properties with long-term leases. With this deal, LA-based NFR becomes one of the larger players in the niche of owning properties leased to financial firms. (We're coining a term for these bank groupies: "bankies.")Vincent also gave a shoutout to seller KBS, for doing "an excellent job maximizing value for KBS REIT I.

The partners paid $240M for the 3.4M SF portfolio, which they say represents a 50% discount to replacement cost. (Fair enough, since a third of this building appears to be missing.) Over a third of the portfolio, about 1.2M SF, is in North Carolina, including three properties in Winston-Salem (616k SF), a regional operations center in Raleigh (450k SF), and one smaller facility each in Burlington, Goldsboro, Smithfield, and Winterville. Pictured: the 188k SF 401 Linden St in Winston-Salem.

In a separate sizable office sale this week involving a bank-leased property, Honolulu-based Shidler Group acquired the Wake Forest University Charlotte Center building for $72.5M from Bank of America. Wake Forest occupies the first floor of the former International Trade Center, a 25k SF space whose renovation was completed last year by Rodgers. The rest of the 460k SF building is occupied by Bank of America, which inked a 10-year lease with options to extend as part of the sale.