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Investors Hot, Hot, Hot for Cool Atlanta Offices: CoStar News

By Tony Wilbert, CoStar News

Click here for full story; see preview below.

Investors are snapping up creative offices and retail spaces in Atlanta's intown neighborhood, and they are paying previously unheard of prices for the Class B product.


In the latest example, Mimms Enterprises acquired Lumberyard Office Lofts, a 67,808-square-foot office complex at 1425 Ellsworth Industrial Dr. in Atlanta's Northside Drive/Georgia Tech - also known as Chattahoochee Industrial - submarket. Based on information in the state of Georgia real estate transfer tax declaration, Roswell, GA-based Mimms paid $13.97 million, or $206 per square foot, for the Class B property built in 2001.

CoStar News Scoop: Boston Properties Bests Rivals With $616 Million Winning Bid for Santa Monica Business Park

Boston Properties Bests Rivals With $616 Million Winning Bid for Santa Monica Business Park

Deal would be one of the largest-ever office sales in Los Angeles County history.

Click here for the full scoop from CoStar News Los Angeles market reporter Jacquelyn Ryan.

Noro Set to Add Buckhead Office Towers to Portfolio

By Tony Wilbert, CoStar News - for full story, click here.

Noro Management is poised to add a Buckhead building to its growing office-and-retail portfolio.

The Atlanta firm has contracted to acquire Peachtree 25th, a two-building, 366,232-square-foot office complex in south Buckhead. The seller is Atlanta Property Group (APG), headed by Jonathan Rodbell and Court Thomas. Noro was founded in 1980 as the real estate investment company of the John A. Fentener van Vlissingen family office based in the Netherlands.

 

 

Atlanta's Brookdale Group is Buyer of Cousins' Texas Tower - Price is $167 Million

ATLANTA (Dec. 30, 2014) - Cousins Properties didn't want to reveal which company is buying Cousins' 777 Main office tower in Fort Worth, Texas. The public REIT announced a week ago that it "entered into a binding purchase and sale agreement, with a non-refundable deposit."

The secret didn't last too long, though. A pesky lawsuit filed by a tenant at 777 Main provided priviledged information and ID'ed the buyer as Atlanta's own Brookdale Group. Sandra Baker of the Fort Worth Star-Telegram broke the news on Christmas Eve, while other CRE reporters were out of the office.

As I used to tell my real estate sources, "You can't control the news. You can only help make sure the story comes out right."

The lawsuit itself is interresting, but we won't focus on it. We are curious to find out why the venerable Cousins did not want to release the buyer's name. Brookdale, founded by several former Hines' executives, is a well-respected investment firm. Then again, maybe the REIT's reticence was forced because they new the lawsuit was coming.

Either way, it looks like a great deal for both the Atlanta REIT and Atlanta investment firm.

UPDATE: Cousins just issued a new press release confirming that the 777 Main office tower sale closed today for $167 million. The REIT bought it last year for $160 million. However, the release does not mention the buyer.

 

Buckhead-Based SG Property Services Acquires Medical Office Portfolio in Atlanta for $14.5 Million

ATLANTA (Dec. 1, 2014) — SG Property Services has acquired the Oak Hill Medical Portfolio, an eight-building, 70,000-square-foot portfolio that includes properties in Peachtree City, Blairsville and Newnan, Georgia, for $14.5 million. The Atlanta Journal-Constitution reported on the acquisition today.

“This portfolio was attractive because of its strong credit tenants and in place yield, as well as its potential for further development,” said Paul Shailendra, president of SG Property Services. “Newnan has seen substantial healthcare investment by virtue of the newly constructed Cancer Treatment Centers of America and Piedmont Newnan Hospital.”

The properties in the transaction include: 10 Eastbrook Bend in Peachtree City; 1294 Hwy 515 East in Blairsville; and 39 Oak Hill Court Buildings A-D, 110 Oak Hill Boulevard and 60 Oak Hill Boulevard in Newnan.

The buyer plans to quickly complete the lease-up at the buildings. SG Property Services recently completed a lease with Piedmont Medical Care and is evaluating additional tenants.

Lee Asher of CBRE represented the undisclosed sellers in the transaction.

About SG Property Services, a client of The Wilbert Group:

SG Property Services (SGPS) is a full service real estate firm based in Atlanta. The Companycreates value through acquisitions, development, leasing, finance, construction management, asset management and property management. SGPS has successfully sourced quality real estate opportunities in the medical and professional office sector in the broader Metro Atlanta market as well as other select markets in the Southeastern United States. Principals of SGPS have decades of experience in these real estate sectors and have built a strong knowledge, contact and experience base. For more information, visit www.sgpropertyservicesllc.com.

Florida Investor Buys Landmark Atlanta Apartment Tower for $121 Million

ATLANTA (Aug. 30, 2014) - The mystery individual investor who just bought the Midtown apartment tower known as 77 12th Street has been identified.

Officially, the buyer is C AND J ATLANTA LLC, an entity that formed in mid-July for purpose of owning the trophy tower. A search of Georgia corporations records shows that C AND J is controlled by John Joyce, a real estate investor with a home in Parkland, Fla. We identified the buyer while shopping this weekend. One of the salespeople lives in the tower and showed us an email saying that C AND J is the new owner and to start sending monthly rent payments to the LLC.

C AND J paid $121 million, or $376,000 a unit for the building with 330 apartments, according to Commercial Real Estate Direct.

C AND J acquired the apartment building that contains street-level retail from Daniel Corp. and Selig Enterprises, the team that developed it as part of its landmark 12th & Midtown mixed-use project. 

Commercial Real Estate Direct says the politcally active Joyce is a Massachusetts investor, but we'll stick with Florida since he owns a nice home in Parkland. Now he owns one of the nicest apartment towers in the Southeast, too.

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Investor Strikes Deal to Acquire Atlanta's Priciest Apartment Tower

Investor Strikes Deal to Acquire Atlanta's Priciest Apartment Tower

ATLANTA (Aug. 11, 2014) - The largest single-asset multifamily investment sale in Atlanta is upon us, and we expect the business media to jump all over the story this week.

Daniel Corp., Selig Enterprises and Northwestern Mutual have agreed to terms to sell the 77 12th Street apartment tower in the 12th & Midtown mixed-use development. The buyer is described as "an individual investor."

The buyer is expected to pay a record price-per-unit for the tower with 330 apartments. The sales price is expected to top $130 million, or $400,000 per unit, according to Commercial Real Estate Direct. The price is frothy, in part, because apartments at 77 12th Street are commanding $2.31 per square foot, the highest in metro Atlanta.

Engler Financial Group of Alpharetta, Georgia, which has the listing, shows the property as "Under Contract" on its website listing of Available Properties. 

Now that this information is out, we look forward to seeing the local and CRE press give the story its due. Several outlets reported in March that the apartment tower had hit the market.

Happy Days Here Again: "I have never seen more capital chasing commercial real estate"

HOUSTON (June 12, 2014) - The Commercial Real Estate Symposium at NAREE 14 lived up to expectations and provided some of the day's best soundbites. It's no surprise given the caliber of the panelists, who represented CRE heavyweights such as CBRE Global Investors, JLL and Transwestern.

Here are some of the highlights of the conversation, moderately nicely by Commerical Property Executive's top editor, Suzann Silverman.

- Office tenants are seeking cooler, open spaces because millennials want more "'we' space, less 'me' space," Transwestern's Chip Clarke told the gathering. In other words, big corporations run by 40- and 50-somethings are smart enough to cater to up-and-coming 20-somethings for the sake of their business. Of course, the bigwigs are making these decisions from their large corner offices with tons of "me space."

- Millennials also crave natural light. Employees want sunlight, "so floor-to-ceiling glass is at a premium, said CBRE Global Investors CEO Matt Khourie.

- Tech and energy companies - combined with record corporate profits, white-collar resilience - saved the office sector. "We're more optimistic today than we've been in 7.5 years," thanks to tech and energy - JLL's John Sikaitis said, and he was armed with data to prove it. While this has been a great ride, other industries must pick up the pace to keep the recovery going. Diversity = office growth, Sikaitis said.

- During each CRE upswing, people love to say something along the lines that capital is chasing deals. That's happening this time, but it's still worth noting. "I have never seen more capital chasing commercial real estate, and that's since 1980," CBRE Global Investors' Khourie told the gathering of real estate journalists and PR pros.

- Better yet, if the chasers armed with cash happen to be from China, yield is not paramount, Khourie said. "Chinese buyers are willing to give up some yield for trophy assets."

- And trophy assets are practially all anyone wants to lease. Trophy and Class A demand accounted for 80% of occupancy growth in office sector since 2011, JLL's Sikaitis said.

- On the industrial side, private REITs have a big advantage over REITs and other buyers. Private REITs have been most aggressive industrial buyers due to their "untouchable" cost of capital," Trey Odom of Avera Cos. said.

- Finally, longer-terms offices leases are back and will ensure buildings hold value longer. Tenants willing to sign 10-, 15-year leases for office space again, Transwestern's Clarke said.

 

 

 

Atlanta Developer's Sale of Jacksonville Mall Sets Mark For Retail Real Estate Sales

ATLANTA (June 11, 2014) - Atlanta developer and retail visionary Ben Carter just sold his stake in an upscale Jacksonville mall for a great price. Carter developed St. Johns Town Center and successfully persauded retailers including Apple, Louis Vuitton and soon Nordstrom to take space or build at the superregional mall.

Carter sold his 50 percent ownership stake in St. Johns Town Center to Deutsche Asset and Wealth Management, a unit of Deutsche Bank formerly known as RREEF. (Simon Property Group, the huge REIT, owns the other 50 percent and will continue to lease and manage St. Johns Town Center.)

The price for half of the 1.2 million-square-foot center was more than $375 million, according to The Wall Street Journal. 

That's a big number and is emblematic of investors' desire for malls with high occupancy rates and top-notch clients. The transaction highlights Carter's real estate savvy and vision. He built an upscale mall in a secondary market and filled it with primary-market tenants. Then, he sold at the right time. The Wilbert Group is thrilled to be working with him.

Here's more from Robbie Whelan's story in the Journal.

Mr. Carter, who also has property investments in Atlanta and Savannah, Ga., said in an interview he sold his stake in the Jacksonville mall because he wants to focus on different projects. He also said he thought he could get a good price because there are few high-quality, superregional malls on the market.

"My new business strategy is outlet malls and urban development. I don't see a great need in the Southeast for regional malls," Mr. Carter said. "They're not making these assets anymore. There are very few of them in private hands, and the premium assets don't really trade."

St. Johns Town Center had an occupancy rate of 99% and sales of between $650 and $700 a square foot last year, according to Mr. Carter and brokers who worked on the deal.

 

Deutsche Asset & Wealth Management, formerly known as RREEF, has $47 billion in assets under management in its real-estate investment business and invests in publicly traded real-estate investment trusts, private equity and debt, in addition to making direct property investments across the globe.

In a 2014 strategic outlook report produced by Deutsche in February, the company observed that "the split between the best- and worst-performing shopping centers grows ever wider and seems to be enduring," and said that it prefers to invest in "dominant regional malls and unique retail offerings" such as urban "high street" retail.

Green Street Advisors, a Newport Beach, Calif.-based real-estate research firm, estimates that last year, the highest-quality malls in the country, dubbed "A++" malls, produced $945 in sales a square foot of space. D-malls, the lowest-quality grade, produced $140 a square foot last year. Based on its sales per square foot last year, St. Johns Town Center would fall somewhere between an A and A+-rated mall.

The sale to Deutsche is "a good sign for owners who have this quality of properties in their portfolios," said Daniel Busch, an analyst who covers retail real estate for Green Street. "All the focus recently has been on selling low quality properties, the B malls. That's what's been on the market. These high-end transactions are few and far between. This transaction gives us a lot of confidence that values are holding up at the high end."

 

 

CrowdVested Kicks Off Equity Crowd Funding in Georgia with Real Estate Project in East Atlanta

ATLANTA ((May 16, 2014) - Commercial real estate is the ideal vertical for crowdfunding, according to a new white paper from CrowdVested. CrowdVested, a Georgia-based online crowdfunding platform for real estate, is currently hosting its first campaign, a retail project in East Atlanta with Paces Properties.  

In the white paper, CrowdVested explains why real estate works for crowdfunding, the history of real estate crowdfunding and what potential investors should know. 

CrowdVested and Paces Properties celebrated the start of equity real estate crowdfunding in Georgia Thursday night at The Glenwood in East Atlanta. The Glenwood Pub is part of the Glenwood Avenue Retail property Paces plans to acquire, and CrowdVested will enable Georgia residents to invest in the renovation of the building.

Dozens of neighbors and friends packed the pub to talk about how they could own a piece of their neighborhood. The local residents who attended included Sibley Fleming, national real estate editor of Bisnow, and former Atlanta Journal-Constitution reporter Kristi Swartz, now Southeast bureau chief of EnergyWire. 

In the photo above, Bisnow's Sibley Fleming interviews CrowdVested founder and CEO Grady Thrasher outside The Glenwood.