IBM's former home in University City has been sold for $42 million to a Rockville, Md., firm that specializes in distressed properties.

BECO Management paid about 30 cents on the dollar for the Meridian Corporate Center, purchasing it from Hartford Financial Services Group after the previous owner defaulted on a $120 million loan. The deal closed Wednesday.

The 12-building campus, previously owned by an affiliate of private equity firm Cerberus Capital Management, had been valued at more than $150 million, according to BECO Management.

Real estate brokers have talked about cash-heavy investment firms eyeing properties, looking to pay bargain prices as values have fallen.

But relatively few deals have closed as speculators have waited, they say.

The sale of the 1.9 million-square-foot Meridian campus shows attitudes are changing and so-called vulture firms are swooping in for the kill, experts say.

"Meridian is the pioneer," said Ryan Clutter, executive vice president with CB Richard Ellis, a commercial real estate firm.

He said interest among potential buyers has easily doubled in the last year.

"You are going to see more and more distressed selling, and more foreclosure-type selling," he said, "where lenders will be pushing deals into the marketplace at a faster place."

The new owner plans to open a Charlotte division focused on revitalizing the troubled campus and expects to spend $25 million to $35 million on improvements.

Similar to what has happened with homebuyers, commercial real estate owners have been reluctant to sell at deep discounts as property values have fallen. Experts say Charlotte-area commercial real estate values have lost around 30 percent to 45 percent of their value in the past two years.

Lenders have also been reluctant to foreclose on troubled commercial properties because they are worth so much less in today's market and could be difficult to unload. But those days may be ending.

Banks are realizing they need to do something rather quickly, said Tom Morgan, senior vice president with commercial real estate firm Glendale Partners of Charlotte.

"Unfortunately, I think this is the beginning," Morgan said. "You will see some major buildings in the Charlotte market be quietly sold for well under what they were purchased for. Negotiations are happening right now."

Among the potential changes, BECO plans to install new signs, upgrade the interior and add parking structures, said senior vice president Chris Epstein. Ultimately, the property could include subsidized day care, updated conference centers and a coffee bar, he said.

BECO's new division, BECO South, will first focus on the campus and later on buying other property in North Carolina. BECO paid cash for the purchase.

"The more we studied (Meridian), the more we fell in love with it," said Epstein, who will move to Charlotte and lead the makeover. The first phase is expected to be finished by the end of this year.

Mecklenburg County officials say they're continuing to keep an eye on commercial properties, especially as the county prepares to send out new tax values on properties early next year in its first revaluation since 2003. Sales price is one piece of data officials use when setting the property values.

Finance Director Dena Diorio said the tax value on a piece of property doesn't change every time there is a sale, only during a revaluation. So she said having a property sell at a lower price than its tax listing wouldn't affect the county's current budget shortfall.

But Budget Director Hyong Yi said a property owner likely might appeal tax bills if he or she bought the property at a lower price.

The 200-acre Meridian complex was initially developed for IBM when it relocated to Charlotte in 1979, bringing 1,000 families to the area from upstate New York.

IBM has largely exited the property but will continue to lease about 40,000 square feet, Epstein said. The center has 700,000 square feet leased, with tenants including Areva, Hewitt Associates and Strayer University. The campus is a mix of office, manufacturing and warehouse facilities.

Real estate analyst Andrew Jenkins with Karnes Research said the campus is in a good location but has been challenging to lease because of its varied spaces and relatively lower-grade condition compared to top-notch buildings. Office and industrial vacancies in the area stayed flat while average rents fell last year, Karnes said.

"Major renovations could turn the project around," Jenkins said.

Clutter of CB Richard Ellis said the deep discount could indicate the real estate market is improving because it shows banks believe there are buyers.

"We're definitely seeing credit markets improve. Lots of money is on the sideline interested in deals," he said.

Cassidy Turley, formerly known as Colliers Pinkard, brokered the sale to BECO and will continue as leasing agent for the property.

"This will be the launching pad," Epstein said. "Once we're completed here and it is leased, we will then move forward and build a whole other enterprise from Charlotte." Staff writer April Bethea contributed.