In today’s challenging lending climate, good intentions may not always be enough. Despite successfully transforming a building into a Class A office space and leasing out 92% of the available space, The Dilweg Companies of Durham defaulted on loan payments for their Raleigh/Durham office building. As a result, they were forced to return the property to the lender. In 2014, Dilweg had acquired this building as part of a larger portfolio deal for $23.25 million but it was recently sold at auction by O’Brien-Staley Partners for $12.5 million.
The RDU Center III is an impressive 4-story structure built in 2009 with over 114,518 square feet of prime office space. Notable tenants include software companies K4 Connect and iContact as well as networking company Extreme Networks Inc.
According to reports from Triad Business Journal, this is not the first time that Dilweg has returned properties to lenders this year – they have also done so with buildings in Cary and Charlotte.
This recent sale at auction highlights the current challenges faced by commercial real estate investors in Raleigh and serves as an important reminder that even seemingly successful ventures can face unexpected setbacks in today’s market.
