CHARLOTTE, NC - New Boston Fund is pleased to announce that the USA Fund has purchased Harris Corners Corporate Park, a three building, multi-tenant Class A office park in Charlotte, North Carolina totaling 361,000 square feet. New Boston acquired the properties for $49.6 million ($137 psf) on April 13, 2011. These properties represent institutional quality office assets in a dynamic, growing region that will offer stability and cash flow to the Fund. They are projected to generate an average annual return to investors of approximately 13.5% over the hold period and an equity multiple of 2.0x. At acquisition, New Boston placed 7-year fixed rate debt totaling $31.5 million on the asset through New York Life at a rate of 5.7%.
The buildings are part of a 75-acre master planned park and are a combined 88% leased. Completed in 2000, One Harris Corners is four stories and totals 97,628 square feet while Two Harris Corners and Three Harris Corners, built in 2001 and 2006, respectively, are both five-stories and total 130,187 and 133,329 square feet. The portfolio is also Energy Star rated and has been managed utilizing sustainable practices including water efficient landscaping and efficient lighting systems.
The properties feature a strong roster of local, national and international credit tenants, including the North American headquarters for Husqvarna, a global leader in outdoor power equipment and products. Additional major tenants include Polymer Group, a leading global engineered materials company, Diagnostic Devices, one of Charlotte's fastest growing companies, Bank of America, Carrier Corporation, and Nestle, Inc. As the new home for these growing enterprises, Harris Corners is contributing to job growth and to the overall economic health of the Charlotte region. Lease rollover at the property is evenly distributed, with 11% rolling in 2011, 12% in 2012, 23% in 2013, and 18% in 2014.
The Harris Corners Corporate Park complex is located at the intersection of I-77 and WT Harris Boulevard, just 10 minutes north of downtown Charlotte and within close proximity to some of Charlotte's most attractive executive housing communities in the Lake Norman region. The location is also poised to significantly benefit from the completion of the city's major loop highway, I-485, with construction projected to be completed in 2015. This new highway, just north of the property, provides direct access from Harris Corners to Charlotte's International Airport and when complete, will link all major suburban submarkets together.
The Charlotte economy has demonstrated a healthy recovery after the recent recession and is projected to be one of the fastest growing regions in the country in terms of population and economic growth in the coming years. The economy, which has traditionally been dominated by financial services, has seen greater economic diversification recently with growth in sectors ranging from energy and medical services and technology to retail and consumer products. Companies including Husqvarna and European appliance giant Electrolux have recently moved North American headquarters to the market, joining numerous existing corporations including Lowe's Home Improvement, Bank of America, and Duke Energy who have chosen to locate their corporate headquarters in the market.