Atrium Health to build medical office space at $250M midtown project

by Ashley Fahey

At its midtown site, Pappas Properties will deliver about 280,000 square feet of medical outpatient space over the next two years for Atrium Health adult specialty centers, including Sanger Heart and Vascular Institute, neurology and digestive health.

Atrium Health is extending its campus in midtown Charlotte with a $200 million investment in two medical office buildings. It’s the next phase of Pappas Properties’ $250 million mixed-use development at its Kenilworth Avenue site.

The project involves the construction of about 280,000 square feet of medical outpatient space over the next two years for Charlotte-based Atrium’s adult specialty centers, including Sanger Heart and Vascular Institute, neurology and digestive health. Pappas will also develop a parking structure and two levels of subterranean parking for the medical office space and future phases of the project.

“We constantly assess how to provide the most convenient access to the care our patients need. These new medical office buildings are conveniently located (close) to our Atrium Health hospital campus and will provide vital access for our communities in central Charlotte,” Atrium says.

The medical office buildings will be at Kenilworth Avenue and Harding Place on part of a larger 5.5-acre site, which has been the longtime home of the Charlotte Regional Realtor Association. CRRA’s current building, which dates back to the 1970s, will be demolished after a new, 58,697-square-foot headquarters is expected to deliver in the spring.

CRRA broke ground on its new headquarters in March.

Atrium says it has been working with Pappas Properties “as the vision for this development grew and materialized.” Details were finalized over the last year.

The midtown project is part of Atrium’s strategic facility master plan and a $1 billion capital commitment over the next seven years. The commitment, which was announced in June, is a piece of Atrium’s larger goal to address capacity issues, technological advancements and infrastructure needs in an effort to make patient care more efficient, Atrium chief executive Gene Woods previously said.

“This is really an opportunity to reposition ourselves,” Woods said.

Debt, equity secured for midtown medical office development

by Ashley Fahey

At its midtown site, Pappas Properties will deliver about 280,000 square feet of medical outpatient space over the next two years for Atrium Health adult specialty centers, including Sanger Heart and Vascular Institute, neurology and digestive health.

A publicly traded REIT is now the majority owner of a midtown Charlotte medical office development after a financing deal recently closed.

Toledo, Ohio-based Welltower Inc. (NYSE: WELL), a real estate investment trust that primarily invests in senior housing and medical office, provided capital in exchange for a 75% ownership in Charlotte-based Pappas Properties’ midtown mixed-use project, which includes two buildings anchored by Atrium Health that will measure 281,148 square feet at buildout.

Terms of the deal were not disclosed. In December, Welltower disclosed it was under contract with Pappas to acquire the 75% ownership stake in the two medical office properties, which have a 15-year term agreement with Atrium.

The $250 million, Pappas-led development is on Kenilworth Avenue, between Greenwood Cliff and Pearl Park Way. Charlotte-based Atrium will open specialty centers at the site, including heart and vascular, neurology and digestive health. Elsewhere on the site, which measures more than 5 acres, construction is wrapping up on the 58,697-square-foot Charlotte Regional Realtor Association headquarters. Future development is likely to include additional parking, more office space and a 150-room hotel with a rooftop bar.

The medical office buildings are expected to deliver in the second and third quarters of 2020.

Welltower and Pappas have also formed a joint venture for potentially more development opportunities in the region, according to JLL Healthcare Capital Markets, which secured debt and equity for Pappas Properties.

Mindy Berman and Louis Stephens at JLL represented Pappas in the deal. Berman, managing director at JLL, said in a statement that “state-of-the-art clinical outpatient properties” aligned with “leading health systems” attract the strongest and most competitive interest from health-care real estate investors.

Welltower owns more than 1,400 properties in the U.S., Canada and United Kingdom. The REIT has become an active investor in the Triangle, where it’s spent more than $100 million in acquiring several medical office and senior-living properties in recent transaction.

Brasfield & Gorrie begins work on Charlotte project

by William Thornton

Charlotte’s Pappas Properties Midtown development is slated for completion in the third quarter of 2020.

Birmingham contractor Brasfield & Gorrie has started construction on a medical office building project in Charlotte, N.C.

The Pappas Properties Midtown development is scheduled to be completed in the third quarter of 2020, the company announced. The project involves two Atrium Health medical office buildings and a nine-level parking deck.

The two medical office buildings, within walking distance of Pearl Street Park, will be connected by a four-level pedestrian bridge.

Brasfield & Gorrie Vice President and Division Manager Michael Byrd said the project will create a lively environment in a new part of the city.

“We are also honored to build on our long history with Atrium Health as they demonstrate their continued commitment to Charlotte through these new facilities,” Byrd said.

CEO and President of Pappas Properties Peter A. Pappas said the campus will be further developed in phases and include additional medical, residential, hotel, and restaurant uses.

Hilton hotel, office building mark next phase of midtown development

by Ashley Fahey

Pappas Properties’ upcoming midtown project includes a 150-room Tapestry Collection by Hilton hotel.

The next phase of development at Pappas Properties’ project in midtown Charlotte will include a hotel and a nine-story office building with ground-floor retail space. A 150-room Tapestry Collection by Hilton hotel, an upscale brand for the hotelier, and a building with up to 210,000 square feet of office space and 20,000 square feet of retail — likely restaurants — are planned at Pappas’ 7-acre project near the Charlotte Regional Realtor Association headquarters.

The $28 million CRRA headquarters wrapped up construction this summer, and Pappas and its joint venture partner, Welltower Inc. (NYSE: WELL), are currently underway on a two-building medical office project for Atrium Health.

Pappas’ and Welltower’s midtown site includes most of the acreage between Harding Place and Pearl Park Way along Kenilworth Avenue. The development also includes a number of infrastructure projects, including the extension of Pearl Park Way, which will connect to Baxter Street by the spring, and an expanded Pearl Street Park.

In 2017, a $4.4 million tax increment grant was awarded to Pappas Properties from the city for the infrastructure projects. A land swap between the city, Mecklenburg County and the Charlotte Housing Authority also occurred to accommodate the private development, road projects and larger park.

The $40 million hotel, which will have a name unique to Charlotte, will be developed on the site of the former CRRA headquarters, at Berkeley Avenue and Pearl Park Way. The office building is slated for the corner of Kenilworth Avenue and Pearl Park Way.

Charlotte Office Building Sells for $38M

by Evelyn Jozsa

Pappas Properties sold SunTrust Building at Sharon Square, a 91,575-square-foot office building in Charlotte’s SouthPark submarket.

Larson Capital Management has purchased the SunTrust Building at Sharon Square, a 91,575-square-foot office building in Charlotte, N.C., for $38 million. CBRE arranged the sale on behalf of the seller, Pappas Properties.

Situated at 4777 Sharon Road, the office building is within Sharon Square, a live-work-play community in Charlotte’s SouthPark submarket, which features various restaurants and retailers, including Whole Foods Market. The building is located within 7 miles of downtown Charlotte and around 12 miles from Charlotte Douglas International Airport. The SunTrust Building also provides access to public transportation on Sharon Road.

Constructed in 2013, the five-story building sits on less than one acre and encompasses 13,610-square-foot floor plates and features ground-floor retail space. The 96.5 percent-occupied building hosts SunTrust Bank’s regional headquarters and is anchored by SunTrust Bank’s private wealth, mortgage, treasury, corporate banking and real estate divisions.

CBRE’s brokerage team included Executive Vice President Patrick Gildea, Senior Associate Matt Smith and Senior Finance Analyst Grayson Hawkins. In October, the team also brokered the sale of Parkview Building, a 124,602-square-foot office property in Charlotte, N.C.