Columbia Sells AT&T Office Complex for $290M

ATLANTA—Columbia Property Trust just sold a five-building class A office campus in Atlanta for $290 million. The campus offers 1 million square feet of office space.

AT&T Services occupies 100% of the unencumbered office property. The complex is located at 1025, 1055, 1057, and 1277 Lenox Park Boulevard and 2180 Lake Boulevard in the Lenox Park office complex in Atlanta's Buckhead submarket.

“This carefully planned and executed sale allowed us to capitalize on market demand while further reducing some of our remaining exposure in single-tenant assets,” says Nelson Mills, president and CEO of Columbia. “While Atlanta remains a sizable component of Columbia's overall portfolio and AT&T continues to be a valued tenant, this transaction is consistent with our strategy to enhance the portfolio by selectively redeploying capital into new growth opportunities, such as our recent purchase of 650 California in San Francisco.”

As companies relocate and expand in Atlanta, Marcus & Millichap predicts demand for space will grow, putting downward pressure on vacancy. In 2014, the firm estimates vacancy will fall 100 basis points to 17.6% on net absorption of 3.6 million square feet. Vacancy tumbled 120 basis points one year earlier.

“In most parts of the Southeast, sluggish to only moderate job growth is causing new commercial construction projects to remain stuck in neutral,” Alex Carrick, chief economist at Construction Market Data (formerly Reed Construction Data), tells GlobeSt.com. “As demand for retail and office space increases with GDP gains, supply constraints resulting from the lack of new construction will put pressure on rents.”