Somerset Center and Place is a multi-tenant, two building office portfolio comprised of 170,000 SF. Somerset Center was built in 1984 and Somerset Place was built in 1998. This value-add office portfolio in Raleigh, NC was acquired in July 2015 in an off-market transaction which allowed Dilweg to purchase the asset at a conservative basis of $94 PSF.
These two assets were upgraded with over $3.5M of capital improvements including renovation of the interior corridors, lobbies, restrooms, and elevators. These renovations allowed for a significantly enhanced marketability of the assets and served as a competitive advantage for additional leasing efforts. The brokerage community perceived this property to have financial challenges as the prior owner had filed bankruptcy. This allowed Dilweg to take ownership and quickly boost occupancy.
“We believe in the strengthening fundamentals in Raleigh’s Six Forks / Falls of Neuse submarket. Somerset is well located to capture the market’s future growth and we are thrilled about the opportunity to reposition these assets.”
Anthony Dilweg
Chairman & CEO
The investment strategy was to increase NOI and extend lease terms to compress the disposition cap rate. In just over 4 years, Dilweg was able to increase NOI by 81% and occupancy to 86%, thus increasing the property valuation by 45%. Dilweg sold the asset in January of 2020 for $29.75 million ($179 per sf).
