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CMA
May 12, 2017  

2 Banks Win Loan for Office Project in NC

J.P. Morgan and Fifth Third Bank have written a $205 million loan for the development of an office tower in Charlotte.

A partnership between Goldman Sachs and local developer Lincoln Harris is constructing an 843,000-square-foot building in the central business district, and has pre-leased more than half the space to Bank of America.

The floating-rate loan, which closed about a week ago, has a term of five years, including extensions. The amount funded by each of the banks is unknown. J.P. Morgan and Fifth Third will probably syndicate portions of the debt to other banks.

The Goldman team is developing the tower at the former site of the Charlotte Observer newspaper offices, at 600 South Tryon Street. The partnership assembled a 10-acre parcel in several transactions that concluded last year, at a total cost of about $37.5 million. The sellers were the newspaper’s parent company, McClatchy, and a sheet-metal business that also had a facility there.

The developers have completed demolition and begun construction of the 33-story tower that would be one of Charlotte’s five tallest buildings. The plans call for a parking deck and open green spaces. There have been discussions about additional phases of development that could include restaurants and other retail space, a hotel and residential units.

BofA last month signed a lease on more than 500,000 sf. The space will be used for “client-facing” operations, such as dealings with corporate clients and wealth-management activities. The bank said it was too early to say whether it would eventually move out of any other space it leases in the city. Its headquarters is five blocks away in the 1.1 million-sf Bank of America Corporate Center.

The project, due for completion in late 2019, represents one of the largest in the city in many years. The site encompasses a two-block area bounded by West Hill, West Stonewall, South Tyron and South Mint Streets. It’s at the western end of the downtown area, close to several museums, hotels and other office buildings. The Carolina Panthers’ football stadium is just across South Mint Street.