Interstate Park Holdings LLC, an affiliate of the Chicago-based WexTrust, bought Interstate Park from Birmingham, AL-based Colonial Properties Trust, which is shedding office and retail assets in favor of multifamily investments. Situated on 28 acres at the intersection of Interstate 85 and Perry Hill Road, Interstate Park was constructed between 1985 and 2003.
The acquisition appealed to WexTrust for several reasons, particularly the stable tenant base and staggered lease rollover. Mike Gorney, WexTrust's principal, points out that the rollover for the 93%-occupied complex is 20% to 30% in any given year. "We don't have a single tenant taking down greater than 10% of the space," he adds. "It keeps our rollover risk manageable."
Gorney tells GlobeSt.com that many rents are below market, offering some good upside potential plus expenses and operational costs also will be examined for possible gains. "At some point when we go to sell the property, we'll be in good shape from an investment perspective," he says.
While the transaction is WexTrust's first in Montgomery, it does have other holdings in the state. Meanwhile, Gorney says WexTrust has an eye on two properties in Birmingham, but nothing is under contract.
Justin Parsonnet with CB Richard Ellis in Atlanta represented Colonial Properties in the transaction. WexTrust was self-represented, making the close with 10-year, fixed-rate financing from Regents Bank. WexTrust has an in-house team to lease and manage the portfolio.
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