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THE HISTORIC
FOR SALE: 3 COMMERCIAL CONDOS
BUILDING
$3,985,000
TABLE OFCONTENTS
03EXECUTIVE SUMMARY
04AERIAL MAP
05PHOTOSHistorical and current photos ofthe iconic Kress Building
07TENANT PROFILESTenants include AmericanUnderground, StewartEngineering, Quarter Horse Bar &Arcade, and Intent FitHouse
All materials and information received or derivedfrom Real Estate Associates its directors, officers,agents, advisors, affiliates and/or any third partysources are provided without representation orwarranty as to completeness, veracity, or accuracy,condition of the property, compliance or lack ofcompliance with applicable governmentalrequirements, developability or suitability, financialperformance of the property, projected financialperformance of the property for any party’s intendeduse or any and all other matters. Neither Real Estate Associates, its directors, officers,agents, advisors, or affiliates makes anyrepresentation or warranty, express or implied, as toaccuracy or completeness of the any materials orinformation provided, derived, or received. Materialsand information from any source, whether written orverbal, that may be furnished for review are not asubstitute for a party’s active conduct of its own duediligence to determine these and other matters ofsignificance to such party. Real Estate Associateswill not investigate or verify any such matters orconduct due diligence for a party unless otherwiseagreed in writing. EACH PARTY SHALL CONDUCT ITS OWNINDEPENDENT INVESTIGATION AND DUE DILIGENCE. Any party contemplating or under contract or inescrow for a transaction is urged to verify allinformation and to conduct their own inspections andinvestigations including through appropriate thirdparty independent professionals selected by suchparty. All financial data should be verified by theparty including by obtaining and reading applicabledocuments and reports and consulting appropriateindependent professionals. Real Estate Associatesmakes no warranties and/or representationsregarding the veracity, completeness, or relevance ofany financial data or assumptions. Real EstateAssociates does not serve as a financial advisor toany party regarding any proposed transaction. Alldata and assumptions regarding financialperformance, including that used for financialmodeling purposes, may differ from actual data orperformance. Any estimates of market rents and/orprojected rents that may be provided to a party donot necessarily mean that rents can be established ator increased to that level. Parties must evaluate anyapplicable contractual and governmental limitationsas well as market conditions,vacancy factors andother issues in order to determine rents from or forthe property. Legal questions should be discussed by the partywith an attorney. Tax questions should be discussedby the party with a certified public accountant or taxattorney. Title questions should be discussed by theparty with a title officer or attorney. Questionsregarding the condition of the property and whetherthe property complies with applicable governmentalrequirements should be discussed by the party withappropriate engineers, architects, contractors, otherconsultants and governmental agencies. Allproperties and services are marketed by Real EstateAssociates in compliance with all applicable fairhousing and equal opportunity laws.
DISCLAIMER & LIMITING CONDITIONS
10FLOOR PLANSMezzanine, Street, and LowerLevels
13ABOUT DURHAMDowntown Durham highlightsand recent economicdevelopments
17COMPANY SUMMARY &ADVISOR BIOSAbout REA and the Brokers
Property overview Location map with surroundingdistricts and retailers
Real Estate Associates, as exclusive listing agent, ispleased to offer for sale three fully-leased commercialcondominium units in the historic S.H. Kressdepartment store building in downtown Durham, NorthCarolina. The three units are located on the street level,mezzanine and lower level of the building, consisting of±17,308 SF. Four tenant leases are in place, includingtwo long-term leases to credit office tenants, as well astwo that are beverage/entertainment and fitnessoriented. The investment offers a steady income streamwith long-term value-add potential, including futureincreases to below-market rents, as well as the ability tocapture additional rentable square footage throughunaccounted core factor. The Kress was built in 1932 in the Art Deco style andfeatures stunning architecture, with floral and foliagemotifs adorning the facade and the interior of thebuilding. The Kress was adaptively repurposed andrenovated in 2006, with the upper levels now consistingof 14 luxury residential condo units. The property sits on the corner of West Main Street andMangum Street, one of the most prominent and highlytraversed intersections in the city’s center. Its locationwithin the downtown core places this site withinfootsteps of all that downtown has to offer – numerouspopular restaurants and bars, the Durham PerformingArts Center, the Durham Bulls Athletic Park, theFarmers’ Market, offices for Durham’s enviable creative,tech and entrepreneurial workforce and thousands ofapartment units. This property is being sold in conjunction with 162 W.Ramseur Street, a ±.153 acre parcel ideal for aresidential infill project. The two properties may be soldtogether or separately at the Seller’s discretion.
PROPERTY OVERVIEW±17,308 SF
Three commercial condo unitsFully leased to four commercial tenants
INVESTMENTFuture value-add from current below-market rents andadditional core factor2020 Net Operating Income: ±$237,000Full Offering Memorandum available with registrationand signed NDACo-brokers welcome with registration only: 2.5% feePrice: $3,985,000
LOCATION & ZONINGCity Center DistrictHighly visible corner location on Main StreetWalkable to food, beverage, entertainment & servicesDD-C (Downtown Core) Zoning
A DOWNTOWNDURHAM ICON S . H . K R E S S & C O B U I L D I N G
D U R H A M ' S I C O N I C A R T D E C O L A N D M A R K
CAREY [email protected]
MURRAY FORBES [email protected] 3
STEPS AWAY FROM FOOD, BEVERAGE, AND ENTERTAINMENTCITY CENTER21c Museum HotelalldayAlley 26Arcana BarB.GoodBar BrunelloBar VirgileBeyu CaffeBulldega Urban MarketBull City Burger and BreweryBull McCabe's Irish PubConvivioCopaCounting House RestaurantCriterionDashiDos PerrosJack Tar & the Colonel's DaughterJeddah's TeaJuicekeysKingfisherLittler RestaurantLoafLucky's DeliLuna Rotisserie & EmpanadasM KokkoM PochaM SushiM TempuraMarriot HotelMateo Bar de tapasMother & Sons TrattoriaNeomonde
Ninth Street BakeryPie PushersPizzeria ToroPokeworksPompieri PizzaPour TaproomQuarter Horse Bar + ArcadeRue ClerSpanglishTaberna TapasTable South Kitchen & BarThai @ Main StreetThe Durham HotelThe Durham - Restaurant & Rooftop BarThe Oak HouseThe ParlourThe Patio Pool & LoungeThe PinhookToastUnscripted HotelViceroy
BRIGHTLEAFClouds BrewingDevine's Grill & Sports BarEl Rodeo Mexican RestaurantGoorshaJames Joyce Irish Pub & RestaurantMaverick's Smokehouse & TaproomMiel Bon BonsMt. FujiParker & OtisPeabody Place PizzaRose's Noodles, Dumplings & Sweets
Saint James Seafood & Oyster BarSkewers Bar & GrillSocial Games & BrewsSugarfishThe FederalTorero'sTrattoria SalveShooters II
WAREHOUSEBlue Note GrillCucciolo OsteriaDurham DistilleryGonza Tacos y TequilaIt's a Southern ThingRamblers Beer StoreWest End Billiards & BocceWest End Wine Bar
AMERICAN TOBACCODurham Bulls Athletic ParkDurham Performing Arts CenterMellow MushroomMoe's Southwest GrillNanaSteakOnly BurgerSaladelia CaféTobacco Road Sports CaféWxyz Bar at the Aloft HotelYMCA (AT branch)
Boxcar Bar + ArcadeCocoa CinnamonDame's Chicken & WafflesDurham Athletic ParkDurham Food HallDurty Bull Brewing CompanyFoster Street CoffeeFullsteam BreweryGeer Street GardenHutchins GarageKing's Sandwich ShopKotuku Surf ClubLouEllaMcDonald'sParts & Labor RestaurantPiedmontRiseThe Bar DurhamThe PitThe Pickleback BarUrban AxesYMCA (main branch)
CAREY [email protected]
MURRAY FORBES [email protected]
GOVERNMENT SERVICESBull City CiderworksNoliaSubwayThe Wine Feed
CENTRAL PARKBeer Durham
CITY CENTER
AMERICANTOBACCO
BRIGHTLEAFWAREHOUSE
GOVERNMENTSERVICES
CENTRALPARK
4
Real Estate Associates does not own the rights to these photographs. Source: www.opendurham.org
1970s 1890s
1930s
1930s
1930s
T H E N . .
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N O W . .
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TENANT PROFILES
MEZZANINE LEVEL LONG-TERM LEASE ±7,306 SQUARE FEET
STREET LEVEL LONG-TERM LEASE ±5,153 SQUARE FEETMAIN ST. VISIBILITY
Founded in 1994, Stewart is a design, engineering and planningfirm located in Raleigh, Durham, Charlotte, Wilmington, andColumbia, SC. Serving clients throughout the southeastern US,Stewart offers a variety of services to meet the needs of its clients,including planning and design, structural engineering, geomatics,construction services, and more. Stewart provides services in a variety of markets within the publicand private sectors. Clients include education, healthcare,institutions, municipalities, architects, departments oftransportation and the federal government as well as commercial,retail, residential and mixed-use developers.
The American Underground (AU) launched in 2010 on the historicAmerican Tobacco Campus. Today, it supports 275+ startupsacross four locations and has been dubbed the “Startup Capital ofthe South" by CNBC. Inspired by Durham’s century-old entrepreneurial legacy, AmericanUnderground, one of twelve Google for Entrepreneurs tech hubs inNorth America, is a diverse startup scene rich in innovative ideasand deep city engagement. AU is the Triangle’s front door to theresources startups, their founders and employees need.
americanunderground.com
stewartinc.com
CAREY [email protected]
MURRAY FORBES [email protected] 8
LOWER LEVEL ±1,853 SQUARE FEET MANGUM ST. VISIBILITY
quarterhorsearcade.com
Opening in Late 2019, Intent FitHouse is the only privately-operated cycling studio in downtown Durham. Intent will offer,cycling classes, small group fitness training and yoga. Thespace is currently under construction. The General Manger previously operated the very successfulSync Studio in Durham, before launching Intent FitHouse.
intentfithouse.com
LOWER LEVEL NEWLY SIGNED LEASE ±2,721 SQUARE FEET
Downtown Durham’s Quarter Horse Bar & Arcade is a private clubwith an amazing collection of classic arcade and pinball machines. Quarter Horse has been the host for numerous birthday and holidayparties, corporate events, local Durham DJ’s, and gamingtournaments. They even have a designated telephone connectingmembers directly to Pie Pushers Pizza.
CAREY [email protected]
MURRAY FORBES [email protected] 9
FLOOR PLANS
ABOUT DURHAM
PHOTO BY @BESTOFTHEBULL
EDUCATION &HEALTHCARE Duke University, consistentlyranked among the nation’s topuniversities, and its widelyacclaimed medical center,employs tens of thousands in jobsassociated with academia, healthcare and research. Duke’s roughly12,000 undergraduate andgraduate school students hail fromaround the world.
RESEARCHTRIANGLE PARK Together, the cities of Raleigh,Durham and Chapel Hill form thethree points of the ResearchTriangle region of North Carolina,home to over 1.5 million people. At the center of the Triangle, andlocated almost entirely withinDurham County, is the acclaimedResearch Triangle Park (RTP), thelargest research park in thecountry and one of the largest inthe world. Home to more than 200 of theworld’s most successfulcompanies, RTP fosters a cultureof innovation, education, andindustry. Companies such as IBM,Syngenta Biotechnology, RTIInternational, BASF, and Cisco callRTP its home and employ over50,000 people in high wage jobs.
urham, North Carolina is a city that has transformed itself from an economy based ontobacco products to one driven byhealth care, biopharmaceuticals,research, academia, high techmanufacturing, entrepreneurship,financial services and hospitality.The only reminders today of theonce thriving tobacco industry arethe numerous warehouse andfactory buildings that still remainintact in and around DowntownDurham. These structures havebeen converted into loftapartments, creative office spaces,restaurants and shops, givingDurham its unique, charmingcharacter. Construction of newoffice buildings, apartmentcommunities and entertainmentvenues such as the DurhamPerforming Arts Center, haveadded new places to work, live andenjoy culture and entertainment inthe heart of Durham.
D The University is locatedapproximately one mile fromdowntown and its East Campus,the original Trinity College, touchesdowntown’s western fringe. NorthCarolina Central University, alsolocated nearby, has a studentenrollment of over 8,000.
PHOTOS BY ESTLIN HAISS
DISCOVER DURHAM
14
n 2019, the downtown Durham area saw over $758 million in investment alone. Since 2000, ithas seen over $1.8 billion. Largemixed-use projects are in thepipeline, including theredevelopment of the formerDurham Police Headquarters site,as well as the expansion of theAmerican Tobacco District on 11acres of underutilized land next tothe acclaimed historic factoryredevelopment. Thousands of newapartments have opened in the lastfew years alone, with hundredsmore under construction. In the midst of an entrepreneurialboom, Durham continues to attractnational attention from the publicsector, Silicon Valley investors, andtalented individuals worldwide. Co-working hubs such as theAmerican Underground, WeWork,BioLabs North Carolina, Spaces,ReCity, Provident1898 and TheMothership now cater to a varietyof startups that have madedowntown their place of business. Downtown has become the go-tolocation for Durham’s bustlingcreative economy, with bothhomegrown startups finding acultivating environment to growand prosper, as well as larger techcompanies from other parts of thecountry opening major outposts orsecond headquarters locations. InNovember 2019, Policygenius, aninsurance technology companybased in New York City, announcedit was opening its second U.S.headquarters in downtown Durhamand leased 48,000 SF. PrecisionLife Sciences, a homegrownDurham life sciences company,recently went public and expandedits operations in downtown’sVenable Tobacco campus, whichitself is planning for a majorexpansion of office and residentialspace. The list of announcementscontinues to grow, and with it, thedemand for high quality creativeoffice space, food & beverageservices, entertainment andresidential development.
SOURCE: DURHAMCHAMBER.ORG
DINING,ENTERTAINMENT &HOSPITALITY
Downtown's retail shops andrestaurants are almost exclusivelylocally owned and operated. Atlast count, the downtown alonehad 112 food and beverageestablishments withannouncements for more to come.In 2015, there were only 187 hotelrooms in downtown Durham. By2018, that number expanded to716 rooms in five hotels: Aloft,The Durham, Marriott, 21c, andUnscripted.
DOWNTOWN DURHAM
The Durham Performing ArtsCenter (DPAC) ended its 2018-2019 fiscal year by setting severalrecords, including 163 selloutshows. In 2018, DPAC held 240events with a total attendance at arecord high of 539,710 guests.DPAC’s average attendance perevent was its highest ever at 2,249people per event. The Durham Bull's Athletic Park,home to Durham's own AAAbaseball team, received a $20million renovation in 2014, earningrecognition for the Best BallparkRenovation over $2 million in the2014 annual awards from BallparkDigest. The beloved Bulls typicallybring over 500,000 visitors togames each year at the park.
SOURCE: DURHAMCHAMBER.ORG
I
SMARTASSET
U.S. CENSUS BUREAU
1515
AVEXIS EXPANSIONLABCORP EXPANSION
In April 2018, LabCorp announced itscreation of 422 new jobs and aninvestment of $30M million for anoperation center in RTP.
In February 2019, leading gene therapycompany, AveXis, announced it willlaunch a 200 job expansion and invest$60 million into its manufacturingcenter in RTP.
In July 2019, leading pharmaceuticalmanufacturer, Merck, announced its planto invest more than $650 million to builda new production facility. Thisinvestment will allow them to create390+ jobs at its Durham location. Over the next 12-years, the project isestimated to grow the state’s economyby $3.1 billion.
When all positions are hired, thepayroll is anticipated to be $27.7million annually.
MERCK EXPANSIONIn November 2019, Policygenius, anonline insurance marketplace, leased48,000 square feet of office space in anew building in the heart of downtownDurham. Policygenius’ second headquarters isprojected to create more than 377 jobswith an average annual salary of$72,000.
POLICYGENIUSHEADQUARTERS
In May 2019, Parexel InternationalCorporation, one of the world’s leadingcontract biopharmaceuticals researchand services companies, will invest $1.7million to open its second U.S.headquarters in Durham. Theinvestment will add 264 jobs and will intotal provide an annual payroll impact ofmore than $29.4 million to the localeconomy.
PARAEXELHEADQUARTERS
RECENT ECONOMIC DEVELOPMENTS STRATA SOLARHEADQUARTERS
In January 2019, Strata Solar, one ofthe nation’s largest solar powerdevelopment and managementcompanies, moved its headquartersinto 50,000 SF in a newly renovatedspace in downtown Durham’s GoldenBelt campus.
for
SOURCE: DURHAMCHAMBER.ORG 16
REA’s roots run deep in Durham, North Carolina, the Bull City, where our firm was formed in the late1960s. Our mission since the beginning was to be more than just another real estate firm. We servemarkets where we can offer unparalleled expertise—understanding both the macro and micro trends,growth patterns and culture. REA is immersed in the communities we serve and is built to last—a valueproposition that is proved by our decades of success and the quality of our team.
COMPANY SUMMARYWHO WE ARE
Across our service lines, we start every proposal, negotiation and meeting with the end in mind. Weinvest time in learning the unique goals of each client—from what you need today to what you areplanning for the future. The real estate business is about more than square footage; it’s aboutleveraging your investments to meet your goals.
REA offers real knowledge in real estate through a team of experienced professionals who know andunderstand the nuances of the Triangle real estate market.
HOW WE WORK
THE BOTTOM LINE
CAREY GREENE
Murray Forbes III brings valuable experience in sales,customer relations and strategic community development.He received his MBA in 2010 and moved back to hishometown of Durham to join REA in 2015. Murray enjoysfocusing on downtown and central Durham submarketsand has experience advising clients in leasing and salestransactions, including office and retail tenantrepresentation.
Carey Greene is a long-time Durham resident with degreesfrom both sides of Tobacco Road - UNC and Duke. He isconsidered an expert in the downtown and central Durhamsubmarket and has vast experience advising clients inleasing and sales transactions of many types, includingoffice and retail tenant representation as well as adaptive-reuse, industrial and investment sales.
MURRAY FORBES III
919.287.3215 [email protected]
VICE PRESIDENT
SENIOR VICE PRESIDENTDIRECTOR OF BROKERAGE
ADVISOR BIOS
REAL ESTATE ASSOCIATES 3333 Durham-Chapel Hil l Blvd Suite C Durham, NC 27707 919.489.2000 REALESTATEASSOC.COM
