DULUTH, GA-San Clemente, CA-based Argus Realty Investors LP has acquired the Northmont Business Center from Principal Real Estate Investors for $25.6 million or $111 per sf.

The center consists of three class A single-story office/industrial buildings at 1950, 1955 and 1965 Evergreen Blvd. with a total of 229,728 sf. The combined occupancy of the buildings is 90.2%. The buildings are flex buildings with 14- to 21-foot ceiling heights and loading docks that can be either offices or warehouse-distribution centers or both.

Argus Realty senior vice president Paul Gaines tells GlobeSt.com that the properties are in good shape, so Argus does not have plans for significant capital improvements beyond normal maintenance. “This was an opportunistic purchase in the high-growth northeast Interstate 85 corridor submarket,” Gaines says. “The property is minutes from many quality Gwinnett County residential neighborhoods making it convenient for office employees and distribution companies.”

A $17.5-million, 10-year, fixed rate loan at 6.35% with interest only for the first five years was arranged for Argus by Bill Tyler, a director of Atlanta-based CBRE/Melody Capital Markets through John Higgins, of Chicago-based LaSalle National Bank.

The three buildings, located in the 275-acre Northmont Business Park, fit Argus’ current acquisition strategy. “You have class A properties in a class A location that are well leased with a strong, stable income flow,” Gaines says. “Ten percent of the space is vacant giving us upside potential in the property. Our acquisition price of $111 per sf is well below the estimated replacement cost of $135 per sf.”

Brad Rogers, first vice president in the Atlanta office of CB Richard Ellis who represented the seller, says 15 institutional real estate investors were interested in the property. He adds that three companies were finalists, but Argus was selected based on its reputation for closing on time and at the price and terms of the sales contract. “Argus came in with an offer, performed extensive homework on the deal beforehand and did what they said they were going to do efficiently and in a timely manner,” Rogers says.

Northmont Business Park is Argus’ fourth class A property acquired in Greater Atlanta in the past 14 months. The other three properties are Powers Ferry Landing East, Securities Centre in Buckhead and Barrett Office Center. With the four properties, Argus owns 1.2 million sf in Atlanta. “We’ve zeroed in on the Atlanta area as a high growth area,” Gaines says, who adds that the company plans to make further acquisitions.

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