ATLANTA-Germania of America Inc., an Atlanta-based private investment group using funds from German investors, has leased a freestanding, nearly 41,000-square-foot flex/office building in Duluth, GA to the New Life Academy of Excellence, a charter school that emphasizes the teaching of Chinese to children in grades K-8.

The rent at the approximately 15-year-old property, which was built as a distribution building with dock doors in the back, but which in recent years has had an office buildout, is comparable to what a commercial tenant would pay, says Bill Bruist, senior vice president at Colliers International, who represented Germania of America in the deal. He declined to reveal the specific rental rate.

But according to Alphonsa Foward, Jr., founder and CEO of the New Life Academy,“The rent was aggressive (as in not expensive) because of the economy.”  Also, the school is doing its own buildout, which may have lowered the rent. The school signed a triple net lease, which runs for three to five years, says Foward, declining to reveal the exact length of the lease. 

Doing the buildout saves money not just because it may affect the rental rate, says Foward. “It is cheaper to do a buildout than to build from scratch,” he says, noting that it will cost approximately $150,000 to do the buildout, compared to $3 million to $4 million for a new building. The parking lot alone would cost about $100,000, says Foward. 

The office/flex building, which was expected to be ready for occupancy within the next couple of days, was easy to renovate, because it housed a church before, says Foward. It already had an auditorium, class rooms and offices.

The River Green Business park, which is a loose collection of office/flex type buildings with individual owners, already has the Notre Dame Academy, a Catholic prep school for pre-K through middle school, so it was not a stretch to add another school, says Rig Chancellor, senior asset manager for Germania.

“Certainly, there is soft demand and an excess of supply in the market, which may drive landlords to consider all credit-worthy tenants,“ says Chris Shaner, senior research associate with Cushman & Wakefield in Atlanta. “But it is not entirely uncommon to see non-traditional users enter into leases that offer competitive rates even in a good market,” he says. In the second quarter of 2010, according to Cushman & Wakefield research, the direct vacancy rate for flex space in the Northeast Atlanta sub-market, where the New Life Academy building is located, was 17.5%.

Commercial landlords have been leasing to churches and schools for about ten years, says Bruist. “This (practice) isn’t related to the recession. If General Electric wanted the building, they would have gotten it,” he says. “The first good tenant that comes along, (the landlord) doesn’t  hesitate,” says Bruist. “If the school didn’t rent it, it could sit empty for two years.”

The New Life Academy has two locations with a total of 471 pupils, the first location being in Norcross, Georgia, another Atlanta suburb about 10 minutes away from the Duluth site, says Foward. The school accepted applications at the end of this past school year for the coming  year, he says, which is how he knows how many pupils the school needs to prepare for in the coming weeks.