Somerset Properties

Spring Forest Business Center

Raleigh, NC

Number of Buildings: 3

Property Size: 156,036 SF

Acquisition Date: April/2016

Sale Date: September/2017

Purchase Price: $16,650,000 ($107/SF)

Sale Price: $17,750,000 ($114/SF)

Deal Level IRR: 27.7%

Deal Level Equity Multiple: 2.41x

• Raleigh is among the top job growth markets in the U.S. The central east coast location, affordable cost of living, and three major universities have made Raleigh a hub for high knowledge-based employment and millennial migration.
• The Property is located close to the I-540 & Rt. 1 interchange making it highly accessible. Amenity rich neighborhood includes the nearby Triangle Town Center with over 130 shops and restaurants.
• The purchase price of $107/SF represented a 30% discount to estimated replacement cost.
• The largest tenant in the park had a near-term lease expiration and needed to expand, but no contiguous space was available. Somerset Properties negotiated to relocate an adjacent tenant to another building allowing both tenants to right-size and expand their leases, creating stability in the rent roll that was attractive to the next buyer.
• The park was originally designed for less than 100% office finish but had evolved over time into full office use, which created a parking deficiency on site. Somerset Properties negotiated a cross-easement agreement with the adjacent church owner to allow the business park to use the church’s parking lot during weekday business hours when services were not being held