KENNESAW, GA-The 175,900-sf Heidelberg USA headquarters has been sold for $22.3 million as part of a 1031 exchange, according to Falcon Real Estate Investment Co. Falcon bought the suburban two-story building at 1000 Gutenberg Drive on behalf of GEM Kennesaw LLC, an overseas private investor.

Scott Sweeney, executive VP with New York City-based Falcon, tells that the seller was a tenant-in-common investment group controlled by Macfarlane Partners of Dallas. Citigroup provided $13.4 million financing in the transaction, he says.

Heidelberg USA is the domestic subsidiary of German-based Heidelberg Druckmaschienen AG, the world’s largest manufacturer of printing machinery. The 14-year-old facility, which was expanded in 1998, is located near the Interstate 75/575 interchange in Kennesaw, about 25 miles northwest of Downtown Atlanta.

Falcon VP Ken Lorman says Heidelberg USA occupies the entire building under a 23-year bondable lease, with 19 years remaining. Falcon advised the buyer on the off-market transaction by negotiating financing, overseeing due diligence and making sure the acquisition met the buyer’s 1031-exchange requirements, he says.

“This was an attractive investment opportunity due to the strength of a corporate headquarters location,” Lorman says. “The lease also features a sizable rental rate increase in the fifth year of our client’s holding period, which will enhance the property value.”

Lorman notes that office vacancies in the Northwest Atlanta submarket have declined nearly five percentage points over the last year and a half because of prohibitive construction costs and a vanishing supply of developable land. More than a million sf of office space has been leased there each quarter since 2004, he says.

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