The Arbors, an office park in Raleigh, North Carolina, enjoys a 98% occupancy rate. The deal combines a high yield of 8-9% cash return in the coming years and has upside potential given that the current rental fees are relatively low.
The tenant mix is diversified and stable. There is a long-term lease (until 2015) for 45% of the property to the North Carolina Treasury Department. In addition, another 15 top-notch companies rent space in The Arbors. The average lease is six years.
There is an upside to be realized upon lease renewals, as the property's average rent is $20.2/SF and comparative properties in the vicinity charge $22-$26/SF.