Apollo Affiliate Pays CarrAmerica $196M for Nearly 2M-SF Office Portfolio

VEF bought the assets for its Value Enhancement Fund V, paying the Washington, DC-based developer $115.29 per sf for the portfolio. VEF was formerly part of New York-based Lend Lease Real Estate Investments. CarrAmerica previously announced it was exiting the metro office arena to concentrate on other core markets.

"Based on square footage, the transaction marks the largest office acquisition in Atlanta this year," says VEF CEO James P. Ryan. "This portfolio fits squarely into our investment strategy of buying quality assets located in major markets where we have both good current income and solid appreciation potential."

The acquired portfolio consists of 724,000 sf in the vibrant Central Perimeter market; 721,000 sf in the Peachtree Corners submarket, northeast of Atlanta; and 256,000 sf in the Northwest/Interstate 75 submarket. The Central Perimeter properties include the Embassy Row office park along GA 400.

Parthenon Realty, a locally based real estate services firm, orchestrated the transaction and will lease and manage the office space for VEF Advisors. The addition of the CarrAmerica portfolio nearly doubles Parthenon's leasing and management portfolio in the metro area.

Parthenon president Drew Cunningham says the new leasing and management contracts for his firm "greatly expands our presence here in Atlanta."

VEF chief investment officer Howard Huang says his company "sees this transaction as an opportune time to invest in Atlanta. Our forecast is for the Atlanta economy and job creation to pick up significantly in coming years, which should bode well for our performance at these properties."

VEF Advisors LLL has invested in more than $3 billion of real estate in the past decade through a group of five closed-end real estate investment funds known as the Value Enhancement Fund Series.

CB Richard Ellis Inc. Atlanta office brokers Will Yowell, Justin Parsonnet and Jay O'Meara represented CarrAmerica in the transaction. LJ Melody director Bill Tyler and John Farrell helped VEF in financing the acquisition but disclosed no details of the debt structure. Raymond Higgins of CBRE's valuation and advisory group appraised the portfolio for VEF.