American Tobacco owner buys buildings for $9.5 million
The owner of the downtown American Tobacco complex paid $9.5 million for two historic buildings on the campus and plans to finish renovation work left undone a previous developer.
A company connected to Raleigh-based Capitol Broadcasting Corp. bought the Old Bull and Noell buildings, which contain offices and apartments,office and apartment buildings. They are on Blackwell Street on the northern end of the American Tobacco campus.
At one time, the buildings were a project of Baltimore-based developer Struever Bros. Eccles & Rouse Inc. But according to a 2010 deed, they sold at auction to a limited liability company connected to a company lender after defaulting on loans. Liens had also been filed against Struever Bros. for construction work that was allegedly unpaid.
A limited liability company connected to Pennsylvania-based real estate finance company Capmark Financial Group Inc. took charge of the buildings. John Warasila, founding principal of the Durham-based architecture and design firm Alliance Architecture, said the Durham firm did design work for Capmark in 2011 for two unfinished floors of the Old Bull building. He said the fourth and fifth floors of the building still need to be completed.
According to information in April from the real estate market research firm Karnes, all of the units in the two buildings were fully leased. The average rent was $1,514, and the average size was 1,212 square feet.
Property records indicate the buildings were sold to ATC North Residential, a limited liability company with the same address as Raleigh-based Capitol Broadcasting, earlier this month. In addition to owning the American Tobacco mixed-use development, Capitol Broadcasting owns WRAL-TV and the Durham Bulls baseball team.
Michael Goodmon, Capitol Broadcasting’s vice president of real estate, said in an emailed statement that the change in the buildings’ ownership is expected to be “seamless” for residential and commercial tenants.
“We look forward to completing unfinished apartments in the buildings, many of which we expect to be ready for market at some point in 2014, and to the positive impact this work will have on American Tobacco’s renaissance and on Durham,” he said.
Bill Kalkhof, former president of the downtown-focused economic development group Downtown Durham Inc., said Struever Bros. had originally taken ownership of the buildings when Capitol was looking for partners to help develop the entire American Tobacco campus.
He said the Baltimore-based company got caught up in the recession. But he said the Old Bull and Noell buildings were considered some of their “premier” properties.
“As much as it’s unfortunate what happened to Struever Bros., at the end of the day…I think Capitol Broadcasting owning all the properties there and developing them makes all the sense in the world,” he said.