Capital One Provides $81M for Acquisition of Lenovo HQ Complex
Capital One has provided a joint-venture of Sentinel Real Estate Corporation and Mumtalakat Holding Company—a sovereign wealth fund controlled by the Kingdom of Bahrain—with $81.2 million to acquire Lenovo’s United States global headquarters in Morrisville, N.C., the bank announced yesterday.
In their first ever joint venture, Sentinel and Mumtalakat purchased the property from London-based 90 North Real Estate Partners for $135.3 million, according to REBusiness Online.
Capital One syndicated $36.9 million of the acquisition loan to Regions Bank, keeping the remaining $44.3 on its books. The financing is a three-year, interest-only and adjustable-rate loan, with two 12-month extension options, according to information from Capital One. Seth Wiener, based at Capital One’s Melville, New York office, originated the transaction.
“The real estate sector is a key component of our portfolio growth strategy, and the U.S. real estate market is growing significantly. In fact, Raleigh-Durham is one of the fastest growing markets in the U.S.,” Mahmood H. Alkooheji, CEO of Mumtalakat, said in a statement in a Feb. 6 news release from the fund. “The area has shown strong employment growth, at twice the national average over the past year, setting a new peak in total employment. It also boasts a dynamic business climate and solid infrastructure with a growing economy, which makes it a very attractive market for us to invest in. With this transaction, the sector represents approximately 22 percent of our total portfolio companies.
“Our partnership with Sentinel is in line with our collaborative approach to investments for further diversification and growth,” Alkooheji, said in the Feb. 6 news release. “It furthers Mumtalakat’s real estate investment strategy by focusing on geographic diversification into high demand and developed markets across a broad range of income generating assets including commercial offices.”
Morrisville is a neighborhood situated between the towns of Raleigh and Durham. The headquarters consists of three buildings, totaling roughly 486,000 square feet, which sit on 67-acres, according to information from Capital One. It’s located just five miles from the Raleigh-Durham International Airport.
The property sits inside Research Triangle Park and is fully leased by Lenovo, a computer manufacturing company with another headquarters in Beijing. The three properties, which are linked by a pedestrian bridge, are located at 7001 Development Drive and 8001 Development Drive, two four-story buildings built in 1995 and 1998, respectively, and at 7501 Development Drive, which is a two-story property constructed last year, according to information from LoopNet.
The buildings feature a cafeteria, food service operations, a fitness center, outdoor patios, a new conference facility and employee break rooms, according to REBusiness Online. The property’s outdoor amenities include a sand volleyball court, a basketball court, a five-acre lake and a 16-acre nature preserve. Recently, Lenovo was approved for a $7.5 million project to add covered parking and a roof-mounted solar array.
“We are very pleased to be venturing with Mumtalakat on this first joint acquisition,” John Streicker, chair of Sentinel Real Estate, said in prepared remarks. “Sentinel is very comfortable with the Raleigh-Durham market. We have been active investors in the region since the 1970s and maintain a regional office there. The stable, long-term growth exhibited by the region bodes well for this exceptional property. For the last decade and a half, Sentinel’s corporate strategy has been to align ourselves with sophisticated global investors. We find that these cross border alliances have growing importance as the world becomes more interconnected. We continue to learn from the fresh perspectives and new practices that accompany these partnerships.”
Neither Sentinel nor Mumtalakat could immediately be reached for further comment.