ATLANTA-Germania of America Inc., an Atlanta-based privateinvestment group using funds from German investors, has leased afreestanding, nearly 41,000-square-foot flex/office building inDuluth, GA to the New Life Academy of Excellence, a charter schoolthat emphasizes the teaching of Chinese to children in gradesK-8.

|

The rent at the approximately 15-year-old property, which wasbuilt as a distribution building with dock doors in the back, butwhich in recent years has had an office buildout, is comparable towhat a commercial tenant would pay, says Bill Bruist, senior vicepresident at Colliers International, who represented Germania ofAmerica in the deal. He declined to reveal the specific rentalrate.

|

But according to Alphonsa Foward, Jr., founder and CEO of theNew Life Academy,“The rent was aggressive (as in not expensive)because of the economy.” Also, the school is doing its ownbuildout, which may have lowered the rent. The school signed atriple 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 affectthe rental rate, says Foward. “It is cheaper to do a buildout thanto build from scratch,” he says, noting that it will costapproximately $150,000 to do the buildout, compared to $3 millionto $4 million for a new building. The parking lot alone would costabout $100,000, says Foward.

|

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

|

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

|

“Certainly, there is soft demand and an excess of supply in themarket, which may drive landlords to consider all credit-worthytenants,“ says Chris Shaner, senior research associate with Cushman& Wakefield in Atlanta. “But it is not entirely uncommon to seenon-traditional users enter into leases that offer competitiverates even in a good market,” he says. In the second quarter of2010, according to Cushman & Wakefield research, the directvacancy 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 schoolsfor about ten years, says Bruist. “This (practice) isn’t related tothe recession. If General Electric wanted the building, they wouldhave gotten it,” he says. “The first good tenant that comes along,(the landlord) doesn’t hesitate,” says Bruist. “If the schooldidn’t rent it, it could sit empty for two years.”

|

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

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.