The deal comes more than two years after The Pantry said it would move to Cary, the report said. Back then, as easy money increased the flow of investors and jacked up property prices, The Pantry expected it would lease space. But as cautious lenders [image-nocss] have required more equity from investors, buyers have fallen out. It had planned on renting the space, but office demand has slowed, and The Pantry made an appealing offer, said the report.
The Pantry paid a couple million dollars less than the appraised value, Anthony Dilweg, CEO of Durham, N.C.-based seller Dilweg Cos., told the newspaper.
The price, about $138 per square foot, was 13% below the average paid for Triangle office buildings in 2008, according to report, citing Real Capital Analytics.
"We both got a good deal," Dilweg added. He paid $1.2 million for it in early 2007, and then spent about $5.5 million on renovations and other costs. Dilweg Cos. was to spend $7 million on renovations, but left some interior construction costs to The Pantry, which moves in this summer.
Triangle office sales totaled $409 million in 2008, down 50% from the previous year, according to the newspaper, citing CB Richard Ellis. The lack of activity has cut prices, making it easier for companies to justify owning their space, rather than renting it.
The Pantry had revenues for fiscal 2008 of approximately $9 billion. As of Nov. 20, 2008, the company operated 1,653 stores in 11 states under select banners, including Kangaroo Express, its primary operating banner. The Pantry's stores offer a broad selection of merchandise, as well as gasoline and other ancillary services.