In today’s challenging lending environment, good intentions may not be enough. Despite successfully transforming a building into a Class A office space and leasing out over 92% of the available space, The Dilweg Companies of Durham defaulted on loan payments for their Raleigh/Durham office building and had to return it to the lender. In 2014, Dilweg acquired this property as part of a 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 a 4-story building with 114,518 square feet of space that was built in 2009. Its tenants include K4 Connect and iContact – both software companies – as well as Extreme Networks Inc., a networking company.
According to reports from the Triad Business Journal, this is not the first time 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 current challenges facing lenders in regards to commercial real estate investments in Raleigh-Durham area offices.
