William Peace University will pay $20.75 million for Seaboard Station, it said Tuesday.
The school announced in an email Friday that it had reached an agreement to buy the property, subject to court approval.
University President Debra Townsley said, “We intend on keeping the retail space. It's great that the parkers have started and we are hoping to continue along in their good work.”
Justin Roy, the Peace vice president for communications, confirmed the purchase price Tuesday.
The area, which is right next to Peace in downtown Raleigh, includes thriving shops, but court filings show landlords Gregory and Parker LLC owe more than $2 million to various creditors.
Gregory and Parker has been under Chapter 11 of the U.S. Bankruptcy Code for more than a year working on a corporate restructure plan.
The total is a major part of Peace's endowment, and represents a risk for the school. Ken Reed, director of research and policy analysis at the National Association of College and University Business Officers, said schools typically invest about 7 percent of their endowment in real estate.
“It is not usual for institutions to buy real estate assets with endowment funds,” Redd said in an email. “As long as the real estate produces income on a regular basis through long-term rents and leases, this could produce a stable long-term return for an institution's endowment.
“It is a bit unusual for an institution to have one half or two-thirds of their endowment assets in one investment or asset class, but if the investment is of high quality and the income it produces is stable, the high percentage may be warranted.”
Peace's interest in the property has concerned some tenants, who worry about what the school will do with the land longterm.