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Charlotte’s 3057-Space Garage Sells to Highwoods Properties for $110 Million

SEVEN20 at Legacy Union Parking Garage

Charlotte’s Legacy Union Transforms: Highwoods Properties Acquires SEVEN20 Parking Garage for $110 Million

Dallas, TX. — In a significant move that underscores the continued dynamism of the Charlotte commercial real estate market, Highwoods Properties Inc. (NYSE: HIW), a leading full-service real estate investment trust (REIT), has announced the strategic acquisition of SEVEN20 at Legacy Union. This prominent 14-story parking garage, located at 720 S. Church St., was purchased from Dallas-based real estate firm Lincoln Property Co. for a reported sum of $110 million. The deal, which solidified Highwoods’ expanding presence in the sought-after Legacy Union district, officially closed on August 21, as confirmed by Mecklenburg County property records. This transaction is not merely the sale of a parking facility; it represents a consolidation of critical infrastructure under a single owner within one of Charlotte’s most vibrant Class-A office campuses, promising enhanced operational synergies and long-term value for the entire district.

A Strategic Asset in a Premier Urban Development

SEVEN20 at Legacy Union is more than just a parking structure; it is an integral component of Charlotte’s urban fabric and a critical operational hub for the bustling Legacy Union campus. As one of the largest parking facilities in the Carolinas, it boasts an impressive 1.1 million square feet across 14 stories, providing an essential amenity that primarily serves the discerning office tenants of Legacy Union and the substantial event traffic generated by the nearby Bank of America Stadium. Its strategic location and immense capacity make it indispensable for daily commuters and visitors alike, particularly during major sporting events, concerts, and other large gatherings that draw thousands to Charlotte’s uptown core.

Beyond its primary function, SEVEN20 also contributes to the street-level vibrancy of the area. The ground floor along Church Street features 14,360 square feet of prime retail space, offering convenience and amenities to those who frequent the district. Furthermore, an innovative pedestrian bridge on the fifth level seamlessly connects the garage directly to the prestigious Bank of America Tower at 620 S. Tryon St., which Highwoods Properties also owns. This direct link enhances accessibility, improves pedestrian flow, and significantly adds to the seamless experience for tenants and visitors within the Legacy Union complex. Lincoln Property Co., despite the sale, will continue to leverage its deep operational expertise by managing the property, ensuring continuity and high service standards.

Highwoods Properties: Consolidating Control in Charlotte’s Urban Core

This acquisition marks a deliberate and significant deepening of Highwoods Properties’ strategic footprint within the Legacy Union district. Highwoods has long recognized Charlotte, and particularly its thriving uptown area, as a key market for investment due to its robust economic growth, influx of corporate headquarters, and vibrant urban lifestyle. Their commitment to this premier location was previously demonstrated by their acquisition of the iconic Bank of America Tower in 2019 for $441.6 million, followed by the purchase of SIX50 in 2022 for $201.2 million. By adding SEVEN20 to its portfolio, Highwoods now owns key office towers and the essential infrastructure that supports them, creating an unparalleled integrated campus experience.

The consolidation of control over critical campus infrastructure under a single landlord like Highwoods is expected to yield numerous benefits. It can streamline operational efficiencies, optimize access for tenants, and potentially simplify pricing structures across the various assets within Legacy Union. This integrated approach allows Highwoods to offer a more cohesive and comprehensive solution to its tenants, enhancing the overall value proposition of the district. Beyond Legacy Union, Highwoods’ extensive presence in Charlotte also includes other high-profile properties such as Capitol Towers and One, Two, and Three Morrocroft Center in the affluent SouthPark area, underscoring their long-term investment strategy in the Charlotte metropolitan area.

Unpacking the Financial Details and Future Outlook

The $110 million transaction for SEVEN20 at Legacy Union provides insightful financial metrics that reflect the asset’s inherent value and future potential. Highwoods Properties plans to invest approximately $1.5 million in near-term upgrades to the facility, signaling a commitment to maintaining its modern standards and enhancing user experience. While specific details of these upgrades were not disclosed, such investments typically involve technology enhancements, structural improvements, and aesthetic updates that contribute to long-term asset value.

From a financial performance standpoint, the parking garage is projected to generate approximately $8 million in net operating income (NOI) over the first four quarters following the sale. This strong income profile is particularly attractive, offering a stable revenue stream supported by both consistent office demand during the workweek and significant event-driven traffic around Bank of America Stadium. The implied cap rate for this transaction stands at an attractive ~7.3%, derived from the $8 million NOI on a $110 million purchase price, indicative of a solid return on investment for Highwoods. Further financial breakdown reveals:

  • Implied Cap Rate: ~7.3% (based on $8M NOI on a $110M price), signifying a strong yield.
  • Price Per Space: ~$36,000 (across 3,057 spaces), reflecting the premium value of urban parking.
  • Price Per Square Foot: $100 (for the 1.1 million square feet), a competitive valuation for such a critical asset.
  • Planned Upgrades: ~1.4% of the purchase price (approximately $491 per space), demonstrating a commitment to asset enhancement and longevity.

The robust expected NOI and the planned capital improvements highlight Highwoods’ confidence in the asset’s enduring income-generating capability and its strategic importance within its broader Charlotte portfolio.

Lincoln Property Co.’s Vision and Strategic Divestment

Lincoln Property Co., in partnership with investment giant Goldman Sachs, has been instrumental in the transformative development of Legacy Union. Lincoln executives have consistently referred to the SEVEN20 garage as the “operational center” of the entire Legacy Union campus, emphasizing its critical role for office users during the workweek and its relentless performance as a “workhorse” on event days. The decision to sell this pivotal asset was part of a carefully considered strategy.

According to Lincoln, the sale was an off-market transaction, meaning it was not publicly listed, indicating a targeted approach to finding the right buyer. Lincoln and Goldman Sachs had reportedly tested buyer interest in previous summers but chose to wait until they believed market pricing accurately reflected the true value of the asset. This patient and strategic approach allowed them to maximize their return on investment. While divesting ownership, Lincoln’s continued role in property management underscores its deep understanding of the asset and its commitment to the Legacy Union district’s ongoing success. CBRE’s prominent brokers, Patrick Gildea and Matt Smith, were instrumental in representing Lincoln in this complex transaction, demonstrating their expertise in high-value commercial property sales. Highwoods, in this instance, did not utilize a broker, facilitating a direct engagement.

Legacy Union: A Master-Planned Urban Destination

Legacy Union stands as a testament to visionary urban development. Spanning 10 acres, this premier Class-A office district was meticulously developed by Lincoln Property Co. in collaboration with Goldman Sachs, transforming a significant portion of Charlotte’s uptown into a dynamic mixed-use environment. The district has been delivered in strategic phases, each contributing to its growing prominence:

  • The parking garage (SEVEN20) and the iconic Bank of America Tower, both completed in 2019, laid the foundational elements.
  • SIX50 followed in 2020, further expanding the office footprint.
  • Honeywell’s state-of-the-art headquarters was delivered and subsequently sold in 2021 for $275 million to PRP Real Estate Investment Management, showcasing the district’s appeal to major corporations.
  • The newest addition, Legacy Union 6HUNDRED, is expected to be completed in 2024, continuing the district’s expansion.

Lincoln Property Co. has indicated that Legacy Union 6HUNDRED is currently the only delivered asset within the district that they still own, and they may eventually consider its sale as part of their long-term investment strategy, further shaping the ownership landscape of this evolving urban hub.

Broader Implications for Charlotte’s Commercial Real Estate Market

The acquisition of SEVEN20 by Highwoods Properties carries broader implications for Charlotte’s burgeoning commercial real estate market. In a period where the office market is undergoing significant adjustments and re-evaluation post-pandemic, assets like essential parking garages with diversified income streams offer a valuable buffer and a degree of stability. The dual demand drivers—office users and stadium events—provide a resilient income profile that is less susceptible to single-sector fluctuations.

Charlotte continues to attract substantial institutional investment due to its strong population growth, diversified economy, and reputation as a major financial and corporate hub. Deals like this underscore investor confidence in the city’s long-term trajectory. Furthermore, the consolidation of key campus infrastructure under a unified landlord facilitates seamless operations, potentially leading to more efficient asset management and a more coherent experience for tenants. This move highlights the strategic importance of integrated urban developments where every component, from office towers to parking facilities, contributes to the overall success and attractiveness of the district. It reinforces the idea that even seemingly ancillary assets, when strategically located and well-managed, play a crucial role in enhancing the value and functionality of large-scale urban developments.

Conclusion: A Forward-Looking Investment in Charlotte’s Future

Highwoods Properties’ $110 million acquisition of SEVEN20 at Legacy Union is more than a simple transaction; it’s a strategic investment that strengthens its dominance within one of Charlotte’s most important urban districts. By securing this vital piece of infrastructure, Highwoods enhances operational control, creates greater synergy across its portfolio of Class-A office towers, and solidifies its position as a key player in the city’s commercial real estate landscape. The robust income generation projected from the garage, coupled with planned upgrades, signals a long-term commitment to asset quality and shareholder value. This deal not only benefits Highwoods but also promises to further enhance the overall tenant experience and the economic vitality of the Legacy Union campus, reflecting the dynamic and enduring appeal of Charlotte’s urban core for major institutional investors.