Most of the Southeast commercial real estate news this week came out of Georgia—and most of that out of Greater Atlanta. We're seeing some big loans closing, strategic multifamily dispositions, and lots of leases. Investors that bought at the right time are cashing out now before the tides turn again.
BY THE NUMBERS
During the third quarter of 2016, Alabama's economy reported signs of improvement as the number of unemployed Alabamians dropped to an eight-year low. A statement recently released by the Alabama Governor's Office announced that Alabama was one of only three states nationally to experience a decline in its August unemployment rate. The state's preliminary, seasonally adjusted unemployment rate fell to 5.4% in August, down from 5.7% in July 2016, and well below August 2015's rate of 6.1%. (Source: Cushman & Wakefield)
Birmingham's office market recorded 257,811 square feet of overall positive absorption in third quarter of 2016, as compared with negative 111,059 square feet in second quarter. The majority of this positive absorption was a result of AT&T removing 252,000 square feet of class A sublease space from the market, resulting in a positive impact in the overall vacancy rate. (Source: Cushman & Wakefield)
NEWS & NOTABLES
CUMMINGS, GA—A private Catholic school in Cumming, GA retained Lincoln Property Company Southeast to provide facilities and engineering services, as well as minor project management, for the Consecrated Women's Residence at Pinecrest Academy. Lincoln will engage its mobile engineering services division and implement various aspects of facility management. Lincoln will also implement its long-term asset preservation guidelines with focus on increasing the integrity of the asset. The 20,000-square-foot living space is located at 951 Peachtree Parkway and houses approximately 20 living spaces on the Pinecrest Academy campus.
ATLANTA—Meridian Capital Group arranged $66.8 million acquisition loan against a portfolio of four class A office buildings known as the Fountains at Piedmont Center in Atlanta on behalf of Ardent Companies. Provided by ACORE Capital, the balance sheet financing features a competitive LIBOR-based interest rate with extension options. Meridian senior vice president Tal Savariego and vice president Dani Sabesan negotiated the deal. Located in the heart of Buckhead, one of the top-performing office markets in the Southeast, The Fountains at Piedmont Center is a four-building 550,000 square-foot office complex that recently underwent a $30 million capital improvement program and features large courtyards and open spaces conveying a campus-like feel within a class A office complex.
DEAL TRACKER
ATLANTA—Veeam Software signed a 4,000-square-foot lease expansion at Northwinds II, a class A office building located in Alpharetta, GA. Veeam also renewed its existing 47,000-square-foot lease, and now occupies 51,000 square feet at the building. Michael Howell and Hunter Henritze of Lincoln Property Company Southeast represented the landlord in the transaction. Ellen Stern of CBRE represented the tenant. “This area is the perfect location for Veeam Software's continued growth and success,” Howell says. “With incomparable accessibility to GA 400 and its expansive mixed-use setting, Northwinds Office Park is the one of the most sought-after office campuses to grow and expand a business in North Fulton.” Northwinds II is a six-story, 146,972-square-foot office building located at 2520 Northwinds Parkway. The office building is located within Northwinds Office Park, a 258-acre mixed-use development featuring two hotels, four banks, nine restaurants, two newly renovated fitness facilities, a daycare/learning facility and six free conference and training facilities.
DULUTH, GA—NAI Brannen Goddard negotiated two new leases at Northmont Business Center, an office and warehouse product in Duluth. The leasing team of Jack Haden, Mike Chambers, and Bradley C. Pope represented Exeter Property Group in the following transactions: Nachi America leased 16,876 square feet at 1950 Evergreen Boulevard. Day Lancaster with NAI Brannen Goddard represented the tenant. Convergent Technologies leased 25,147 square feet at 1955 Evergreen Boulevard. Josh Gregory and Michael Lipton with Colliers International represented the tenant. Northmont Business Center, which just completed renovations, is located on Satellite Boulevard just off Interstate 85 North. It has class A building features including 24-foot clear with 120-foot deep truck courts and ample parking to accommodate a higher percentage of office to warehouse mix.
ATLANTA—Carroll Organization sold ARIUM Saint Johns in Jacksonville, FL, the last property remaining in an eight property portfolio acquired by Carroll Co-Invest Fund II and NorthStar Realty Finance Corp. in Spring 2013. “ARIUM Saint Johns represented an opportunity to acquire a well-located asset with convenient access to a variety of employment centers within the Jacksonville market. We felt that the asset presented a compelling proposition for both organic rent growth, as well as value-add upside” says M. Patrick Carroll, CEO of Carroll. “The business plan was to drive revenue by matching neighboring rent premiums through an interior upgrade program, as well as light upgrades to the exterior and amenities. Given the strong pricing recently achieved for well-located value-add product in the area, we elected to sell the property after three years of ownership and distributed a strong return to our investors.”
ATLANTA—Broadtree Residential acquired a portfolio of 120 single-family rental homes in suburban Atlanta for about $8.5 million. Broadtree purchased the 120-unit portfolio from a large institutional single-family rental owner-operator. The homes average 1,405 square feet, and were acquired for an average purchase price of approximately $71,000, or $51 per square foot. The portfolio is over 90% occupied. Broadtree currently owns and manages 421 single family homes in the Atlanta area. “This portfolio of single family homes complements our existing Atlanta footprint very nicely,” says Amy Tait, chairman and CEO of Broadstone Tones Vaisey represented Broadtree on this transaction.
MARIETTA, GA—Prospect Capital Corporation's portfolio company National Property REIT Corp. sold its Abbington Pointe property in Marietta for $37 million, achieving a 24% realized internal rate of return and 2.1 times cash on cash return on this investment. NPRC acquired Abbington in December 2012 in a co-investment joint venture with Providence Management Company, the property management team for this multifamily residential property. “The Abbington realization demonstrates the strong performance of NPRC's multifamily-focused real estate portfolio, which has delivered net operating income growth and increasing yields as well as capital gains,” says Ted Fowler, managing director of Prospect Capital. “NPRC continues to benefit from demographic trends driving higher occupancies and rent growth in the apartment sector.”
ATLANTA—Lincoln Property Company Southeast arranged the $33.5 million acquisition of the Hurt Building, a 436,340-square-foot historical building located at 50 Hurt Plaza in Downtown Atlanta. Chip Sipple of Lincoln and Kyle Stonis and Pierce Mayson of SRS Real Estate Partners co-represented the buyer, Gamma Real Estate and local partner, Dion Meltzer, in the transaction. The seller, Boxer Properties, sold the asset in an off-market transaction arranged by Lincoln and SRS. “The Hurt Building is one of the nation's earliest skyscrapers, and at the time it was built in 1913, it was one of the largest office buildings in the world,” says Stonis. “Though recently it has most notably served as a filming location for movies and television shows, it remains an integral part of Atlanta's architectural history.”
Most of the Southeast commercial real estate news this week came out of Georgia—and most of that out of Greater Atlanta. We're seeing some big loans closing, strategic multifamily dispositions, and lots of leases. Investors that bought at the right time are cashing out now before the tides turn again.
BY THE NUMBERS
During the third quarter of 2016, Alabama's economy reported signs of improvement as the number of unemployed Alabamians dropped to an eight-year low. A statement recently released by the Alabama Governor's Office announced that Alabama was one of only three states nationally to experience a decline in its August unemployment rate. The state's preliminary, seasonally adjusted unemployment rate fell to 5.4% in August, down from 5.7% in July 2016, and well below August 2015's rate of 6.1%. (Source: Cushman & Wakefield)
Birmingham's office market recorded 257,811 square feet of overall positive absorption in third quarter of 2016, as compared with negative 111,059 square feet in second quarter. The majority of this positive absorption was a result of
NEWS & NOTABLES
CUMMINGS, GA—A private Catholic school in Cumming, GA retained Lincoln Property Company Southeast to provide facilities and engineering services, as well as minor project management, for the Consecrated Women's Residence at Pinecrest Academy. Lincoln will engage its mobile engineering services division and implement various aspects of facility management. Lincoln will also implement its long-term asset preservation guidelines with focus on increasing the integrity of the asset. The 20,000-square-foot living space is located at 951 Peachtree Parkway and houses approximately 20 living spaces on the Pinecrest Academy campus.
ATLANTA—Meridian Capital Group arranged $66.8 million acquisition loan against a portfolio of four class A office buildings known as the Fountains at Piedmont Center in Atlanta on behalf of Ardent Companies. Provided by ACORE Capital, the balance sheet financing features a competitive LIBOR-based interest rate with extension options. Meridian senior vice president Tal Savariego and vice president Dani Sabesan negotiated the deal. Located in the heart of Buckhead, one of the top-performing office markets in the Southeast, The Fountains at Piedmont Center is a four-building 550,000 square-foot office complex that recently underwent a $30 million capital improvement program and features large courtyards and open spaces conveying a campus-like feel within a class A office complex.
DEAL TRACKER
ATLANTA—Veeam Software signed a 4,000-square-foot lease expansion at Northwinds II, a class A office building located in Alpharetta, GA. Veeam also renewed its existing 47,000-square-foot lease, and now occupies 51,000 square feet at the building. Michael Howell and Hunter Henritze of Lincoln Property Company Southeast represented the landlord in the transaction. Ellen Stern of CBRE represented the tenant. “This area is the perfect location for Veeam Software's continued growth and success,” Howell says. “With incomparable accessibility to GA 400 and its expansive mixed-use setting, Northwinds Office Park is the one of the most sought-after office campuses to grow and expand a business in North Fulton.” Northwinds II is a six-story, 146,972-square-foot office building located at 2520 Northwinds Parkway. The office building is located within Northwinds Office Park, a 258-acre mixed-use development featuring two hotels, four banks, nine restaurants, two newly renovated fitness facilities, a daycare/learning facility and six free conference and training facilities.
DULUTH, GA—NAI Brannen Goddard negotiated two new leases at Northmont Business Center, an office and warehouse product in Duluth. The leasing team of Jack Haden, Mike Chambers, and Bradley C. Pope represented Exeter Property Group in the following transactions: Nachi America leased 16,876 square feet at 1950 Evergreen Boulevard. Day Lancaster with NAI Brannen Goddard represented the tenant. Convergent Technologies leased 25,147 square feet at 1955 Evergreen Boulevard. Josh Gregory and Michael Lipton with Colliers International represented the tenant. Northmont Business Center, which just completed renovations, is located on Satellite Boulevard just off Interstate 85 North. It has class A building features including 24-foot clear with 120-foot deep truck courts and ample parking to accommodate a higher percentage of office to warehouse mix.
ATLANTA—Carroll Organization sold ARIUM Saint Johns in Jacksonville, FL, the last property remaining in an eight property portfolio acquired by Carroll Co-Invest Fund II and
ATLANTA—Broadtree Residential acquired a portfolio of 120 single-family rental homes in suburban Atlanta for about $8.5 million. Broadtree purchased the 120-unit portfolio from a large institutional single-family rental owner-operator. The homes average 1,405 square feet, and were acquired for an average purchase price of approximately $71,000, or $51 per square foot. The portfolio is over 90% occupied. Broadtree currently owns and manages 421 single family homes in the Atlanta area. “This portfolio of single family homes complements our existing Atlanta footprint very nicely,” says Amy Tait, chairman and CEO of Broadstone Tones Vaisey represented Broadtree on this transaction.
MARIETTA, GA—Prospect Capital Corporation's portfolio company National Property REIT Corp. sold its Abbington Pointe property in Marietta for $37 million, achieving a 24% realized internal rate of return and 2.1 times cash on cash return on this investment. NPRC acquired Abbington in December 2012 in a co-investment joint venture with Providence Management Company, the property management team for this multifamily residential property. “The Abbington realization demonstrates the strong performance of NPRC's multifamily-focused real estate portfolio, which has delivered net operating income growth and increasing yields as well as capital gains,” says Ted Fowler, managing director of Prospect Capital. “NPRC continues to benefit from demographic trends driving higher occupancies and rent growth in the apartment sector.”
ATLANTA—Lincoln Property Company Southeast arranged the $33.5 million acquisition of the Hurt Building, a 436,340-square-foot historical building located at 50 Hurt Plaza in Downtown Atlanta. Chip Sipple of Lincoln and Kyle Stonis and Pierce Mayson of SRS Real Estate Partners co-represented the buyer, Gamma Real Estate and local partner, Dion Meltzer, in the transaction. The seller, Boxer Properties, sold the asset in an off-market transaction arranged by Lincoln and SRS. “The Hurt Building is one of the nation's earliest skyscrapers, and at the time it was built in 1913, it was one of the largest office buildings in the world,” says Stonis. “Though recently it has most notably served as a filming location for movies and television shows, it remains an integral part of Atlanta's architectural history.”
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