An Update on Roswell's Office Market

ATLANTA—Roswell North, an office building in the greater Atlanta metro, just traded hands. The sale price, $5.4 million, or $92 per square foot.

Transwestern managing director Kevin Markwordt and vice president Todd Syprett represented the seller, a private investor, in the transaction. Virginia-based SugarOak Holdings acquired the 58,529-square-foot office building at 8010 Roswell Road in Sandy Springs, Georgia, a suburb north of Atlanta.

“This transaction represented a true win-win for the seller and buyer,” says Markwordt. “SugarOak acquired a well-located, stabilized asset with excellent cash flow, and the seller cashed in on another great investment.”

Built in 1986, Roswell North is a three-story, class B building. The office building is 94% occupied and features functional, affordable office space with covered parking, which is rare in the area. Roswell North's location offers access to State Route 400.

Roswell North sits within the Central Perimeter submarket, which includes the largest concentration of commercial and medical real estate in the Southeast: 34 million square feet of office, 6.6 million square feet of retail and 3.3 million square feet of healthcare. Central Perimeter is home to UPS, Cox Enterprises, State Farm, Arby's, Auto Trader, Newell Rubbermaid and the future headquarters of Mercedes-Benz.

According to Marcus & Millichap's latest office report, the construction pipeline remains limited to build-to-suit projects and smaller speculative offices in urban core submarkets such as Buckhead and the Central Perimeter where operations are flourishing. The firm predicts the lack of development will work in the market's favor this year as firms absorb the highest amount of space since the Great Recession, fostering deteriorating vacancy levels that will support a fourth year of rising rents.

“Large institutions and REITs dominate the high end of the market in Buckhead, the Central Perimeter and farther north on the Georgia 400l,” M&M reports. “Meanwhile, smaller firms and investors have been forced into the suburbs, often seeking assets that can be renovated or repositioned for higher rents and greater yields.”