GlobeSt.com EXCLUSIVE: A.G. Spanos Unit Pays $178 Per SF for Equity Office Asset

The deal was done at this time because "these are four multi-tenant class C assets that fall outside our core concentration of class A properties," an Equity Office spokesperson tells GlobeSt.com. Equity Office has owned the four-building complex since 1997.

Equity Office says the estimated occupancy of the four buildings at closing was about 50%, "but EOP relocated the tenants, many within our portfolio, in advance of this transaction." The deal closed Tuesday afternoon.Spanos plans to raze the buildings for a residential development which Equity Office officials agree is there "highest and best use."Don Huffner, senior vice president of Equity Office's Atlanta region, tells GlobeSt.com, "These are low-rise class C buildings that were not a strategic fit our portfolio. The value was in the land and the highest and best use for the site is residential."

He tells GlobeSt.com the deal was done at this time because "timing was a factor of strong interest and attractive pricing from residential developers for this site." Spanos plans 380 apartment units on the seven-acre site.

Huffner says, "We're seeing alternative uses spring up around the country where more office sites are morphing into residential sites, and that's also something we've seen more of in the Central Perimeter submarket, as it evolves into a 24-hour community where people live, work and play."

Huffner adds, "Central Perimeter is an attractive market for office, retail and residential, and we're committed to and believe in the growth of this submarket."

Ron Willingham and Matt Hawkins of Cushman & Wakefield represented the seller, along with Megan McCann, vice president/investments with Equity Office. Jim Kourafas, vice president, A.G. Spanos, coordinated the transaction for his firm.In April 2004, Equity Office sold the 971,429-sf 125 Perimeter Center to Sembler Co. of St. Petersburg, FL for $25.5 million. "There is a lot of activity in this market," the Equity Office representative tells GlobeSt.com, despite a 27.7% vacancy level in the class C office category.

Colliers Cauble Co. of Atlanta notes there is 144,437 sf available in the Perimeter's 522,326-sf class C market. Net absorption year to date was only 3,269 sf. The average annual asking rent is $13.77 per sf.