By Tony Wilbert, CoStar News - Click here to read full story.
The first-quarter numbers are in, and Decatur's dominance of multifamily sales continues in 2018.
ATLANTA (March 20, 2015) - It's great to see Thad Ellis, a friend and Delaware native, leading Cousins Properties' new development effort in Charlotte. It comes as The Wilbert Group ramps up its efforts in the Queen City, led by our work with Crescent Communities.
The Wilbert Group would be conflicted out of working with Thad and Cousins in Charlotte because of our growing relationship with Crescent. That said, we wish our buddy great success - just not when competing head-to-head with Crescent for raw land or prize tenants.
- Tony Wilbert
Here's the scoop from Will Boye of Charlotte Business Journal.
"We didn’t want to just stick our toe in the water," Ellis says of the company's acquisition of the Fifth Third Center uptown.
That’s what Thad Ellis, a senior vice president with Cousins, told me in an interview this week. Ellis oversees the Atlanta, Dallas, Charlotte and Raleigh markets for Cousins, which acquired the 30-story Fifth Third Center last year for $215 million, a record price on a square-foot basis for a Charlotte office property.
Cousins owns 17 properties totaling 16.2 million square feet in Charlotte, Atlanta, Dallas, Houston and Austin, Texas. That includes the nearly 1.1 million-square-foot Gateway Village complex in uptown Charlotte, which Cousins developed and co-owns with Bank of America Corp.
During Cousins’ fourth-quarter conference call last month, CEO Larry Gellerstedt said the company won’t be a big buyer in 2015 due to the rising prices for office properties. Ellis echoed that sentiment this week but said the company is actively looking for development opportunities in Charlotte and is happy with its purchase of the Fifth Third Center, where a new tenant recently signed and an existing tenant expanded. Fifth Third Center is approximately 84% leased.
Following are excerpts from our conversation:
Cousins purchased Fifth Third Center last year for a big number. How do you feel about that purchase today?
We’re very pleased. We’re very bullish on Charlotte as a corporation. We’ve been trying for several years to get back in the market in a meaningful way. There’s no question Charlotte’s got some terrific dynamics. It’s an inexpensive place to do business. It’s one of the leaders in the Southeast. The airport is only going to be more of a draw. The fact that you all have a plan for light rail and transit and you’re executing on it puts you way ahead of other Southeastern markets. I know everybody loves to get hung up on millennials, but you walk through downtown Charlotte, and it’s very vibrant and youthful. And people want to live in Charlotte because of the cost of living and the quality of life. All of that is a real plus for us. Did we pay a high number to acquire Fifth Third? History will dictate, but we felt like it was a very sound investment because of who the customers are, the quality of the real estate, where it’s located. And we really wanted to get back into the market in a meaningful way. We didn’t want to just stick our toe in the water.
How do the sales and prices for office properties here compare with what you’re seeing in other markets?
Charlotte is on everybody’s radar, so there are no secrets, and there’s no one stealing anything on acquisitions. I’m not going to be so bold to say that we won’t acquire additional trophy assets in the next 12 to 24 months, but I think you’ll see us have a lot more success and focus on new development. Not necessarily speculative development, but hopefully with anchor tenants and build-to-suits. We just think for the adjusted risk-reward, right now we’re in a cycle where new development is more attractive to us than acquisitions. Higher projected yields.
Do you see any opportunities in Charlotte for development?
We do. We’re focused on the Charlotte urban area. We would include SouthPark in that. Everything from the central business district to South End on into SouthPark. It’s vibrant, job growth is healthy, the multifamily industry seems to be leasing up well. All things that are good indicators. It’s real favorable right now.
How’s the leasing activity at Fifth Third?
If there has been a surprise for us in Charlotte, it’s that the velocity of deals in the central business district has been OK. I wouldn’t give it strong marks. And the deals have been smaller than we would have anticipated. There’s not a lot of full-floor users and larger in the market today. Most of that activity seems to be more in SouthPark and elsewhere. But we’re very happy with the creditworthiness of the tenants. And with the deals that we plan to announce, it also allows us to break up some of those floors and we can do smaller deals and be that much more competitive. We’re very pleased with where we are at Fifth Third.
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.
ATLANTA (Dec. 4, 2104) - Cousins Properties just got the shot in the arm it needed after a very tough week.
Today, Veritiv, what will be metro Atlanta's newest Fortune 500 company officially confirmed it selected Northpark Town Center as its new headquarters. Veritiv, formed earlier this year when International Paper's xpedx division hooked up with Unisource Worldwide, inked a deal for 68,000 square feet at the landmark suburban office park located right off Ga. 400 at Abernathy Road.
“Veritiv is a wonderful addition to our strong customer base at Northpark, which is now
home to 19 Fortune 500 companies,” said Larry Gellerstedt, president and chief
executive officer of Cousins. “Veritiv’s desire to be centrally located with close proximity
to MARTA validates Northpark’s competitive advantage in the Central Perimeter
submarket of Atlanta.”
(Of course, CRE scoop king Jarred Schenke of Bisnow broke the story about four months before the public companies wanted him, too. And congrats to Jarred on the birth of your 3rd son.)
Gellerstedt must have been pleased as punch that Veritiv chose today to announce the good-sized office deal. A couple of key REIT analysts downgraded CUZ stock because of its exposure to Houston, which quietly emerged as the Atlanta company's largest market. While most of us applaud falling oil and gas prices, office owners in Houston shudder at the thought.
So, I'm happy that Cousins can end the week on some good news. It also means someone better start developing some spec office space in the air-tight Central Perimeter submarket.
Tumbling oil prices behind Cousins Properties downgrades • 8:56 AM
Here's the official release...
Veritiv Executive Offices to be Located in Atlanta
Perimeter Center Business District
Company’s Largest Employee Base will Remain in the Greater Cincinnati Area
12/04/2014
ATLANTA -- Veritiv Corporation (NYSE: VRTV), a leading North American distribution
company, has selected Northpark Town Center, located in the Central Perimeter area of
Atlanta, for the company’s executive offices. The 68,000 square feet space owned by
Cousins Properties (NYSE: CUZ) will be home to approximately 125-150 of Veritiv’s
senior leadership and corporate support functions.
“We are pleased to bring our executive offices to the Perimeter Center area of Atlanta
and Northpark Town Center. The location will allow us to plan for growth as needed
and allows our employees a location with access to MARTA and key transportation
hubs,” said Mary Laschinger, Chairman of the Board and Chief Executive Officer of
Veritiv.
Laschinger said the company will continue to have significant operations in the Greater
Cincinnati, OH area. Ohio is home to Veritiv’s largest base of employees where
important operational and customer service functions reside.
“Veritiv is a wonderful addition to our strong customer base at Northpark, which is now
home to 19 Fortune 500 companies,” said Larry Gellerstedt, president and chief
executive officer of Cousins. “Veritiv’s desire to be centrally located with close proximity
to MARTA validates Northpark’s competitive advantage in the Central Perimeter
submarket of Atlanta.”
Veritiv was established in 2014 following a merger of International Paper Company’s
xpedx division and Unisource Worldwide, Inc. The Atlanta-based Fortune 500
Company employs approximately 9,500 employees across more than 170 distribution
centers in the U.S., Mexico and Canada.
--more--
News ReleaseAbout Veritiv
Veritiv Corporation (NYSE: VRTV), with executive offices in Atlanta, is a North American leader in
business-to-business distribution solutions. Serving customers across virtually every industry, Veritiv
provides print, packaging, facility and logistics solutions that help shape the success of its customers.
Established in 2014, following the merger of International Paper Company’s xpedx division and Unisource
Worldwide, the company employs approximately 9,500 team members across more than 170 distribution
centers throughout the U.S., Mexico and Canada. For more information about Veritiv and its business
segments visit www.veritivcorp.com.
About Cousins
Cousins Properties Incorporated is a fully integrated, self-administered and self-managed real estate
investment trust (REIT). The Company, based in Atlanta, GA, primarily invests in Class-A office assets
located in high growth Sunbelt markets, with a focus on Georgia, Texas and North Carolina. The
Company has a comprehensive strategy in place based on a simple platform, trophy assets and
opportunistic investments. For more information, please visit www.cousinsproperties.com
###
Veritiv Contact:
Ed Patterson, 678-418-4221
[email protected]
Cousin Contact:
Marli Quesinberry 404-407-1898
[email protected]
ATLANTA (Nov. 3, 2014) - By mid-week, downtown Atlanta will become the center of the REIT industry, with an unprecedented number of real estate CEOs gathering in the city that never stops building.
The National Association of Real Estate Investment Trusts, or NAREIT, kicks off REIT World - its "Annual Convention of All Things REIT" - on Tuesday evening at the Atlanta Marriott Marquis. The convention runs through Friday morning.
That Atlanta is playing host to this influential conference that attracts top investors, money managers, bankers, and of course, developers, brokers and real estate press, is impressive. Atlanta has a greast tradition of entrepreneurs creating REITs, including John Williams (Post Properties), Tom Cousins (Cousins Properties) and Ray Weeks and his dad (Weeks Corp./Duke-Weeks). In fact, Atlanta used to be a key player in the retail REIT industry with JDN Realty (defunct), and IRT Property Co.; and in the mortgage REIT industry that dried up during recent downcycles.
The list of REIT CEOs who heading to Atlanta this week for REIT World is impressive: David Neithercut, presdent and CEO, Equity Residential; Sandeep Mathrani, CEO, General Growth Propertties; Timothy Naughton, CEO, AvalonBay Communities; Jon Bortz, chairman; Art Coppola, chairman and CEO, Macerich; Donald Wood, president and CEO, Federal Realty Investment Trust; and CEO, Pebblebrook Hotel Trust, which made a splash when it acquired the InterContinental Buckhead Hotel in 2010.
REIT World also marks the first appearance at a major event by PulteGroup President, Chairman and CEO Richard Dugas, who moved his company and himself to Atlanta earlier this year. Dugas (in photo) is a panelist on Wednesday's Session Two, "Gimme Shelter - Housing America."
We're sure Cousins and Post will be well represented as well.
ATLANTA (Nov. 1) - Houston-based AmREIT took the opportunity late last night to announce that the retail REIT has agreed to be aquired by EDENS in an all-cash transaction valued at $763 million (or $26.55 per share). The impact on Atlanta's retail market, which AmREIT entered in 2011, should be interesting.
In fact, the acquisition likely will position EDENS as the leading owner of upscale strip centers in Buckhead, where Simon Property Group dominates the mall scene. EDENS (not sure why they do name in all CAPS) owns Lenox Marketplace and Buckhead Market Place, anchored by the very busy Whole Foods on West Paces Ferry Road, and will add a couple more through the acquisition.
Just before the Halloween night announcement, AmREIT had been cranking up its Atlanta portfolio. Only two months ago, the REIT expanded its Atlanta presence with the acquisition of Tuxedo Festival Shopping Center in Buckhead. AmREIT execs evern hinted at the possibility of scraping Tuxedo Village and replacing it with a mixed-use development.
Closer to home, the transaction means EDENS would come to Brookwood Hills, where South Georgia native and former star college QB Nate Hybl just opened gusto! Wood Fire Grill at the "Irreplaceable Corner" of Peachtree and Brighton roads (see photo).
ATLANTA (Sept, 16, 2014) - Atlanta's commercial real estate industry doesn't get to see a lot of the legendary Tom Cousins these days, so it was quite nice to see him smiling on Facebook this week.
In this picture from the PGA Tour Championship by Coca-Cola at East Lake Golf Club, Cousins appears happy, content and comfortable in his red Coca-Cola tie. He's pictured with Elizabeth Jennings, a business systems analyst at Coca-Cola Refreshments, aka CCR, who volunteered at the big golf tournament last weekend.
Here's what fellow University of Delaware grad Elizabeth had to say about getting the opportunity to say hello to Cousins, 83, the man who developed several signature office towers in Atlanta (Bank of America Plaza, The Pinnacle, etc.).
"Hanging with Mr. Tom Cousins at hole 18 #legendary#eastlakegolfclub #eastlakefoundation#tourchampionship #fedexcup #PGATour #cocacola — at East Lake Golf Club."
While Cousins' handiwork is visible at corporate campuses, office park and trophy towers across the metro area and beyond, his work at East Lake likely is some of his best and probably most satisfying. You can read all about Cousins' crowning accomplishment in this story from The New York Times.
As for Cousins, he still has about a dozen years ahead of him in the real estate industry - at least according to what he told me in 1997. We sure hope so.
"I promised my wife that when I was 95 I was going to absolutely quit working full time," he said, trying unsuccessfully to hold back laughter. Really, though, he said he'll hang it up "when it ceases to be fun."
"I tell college kids, `Get you a job you like. The money will take of itself,' " he said. "I can think of very few days in my working life that I haven't looked forward to going to work."
Cousins said he could have afforded to quit a long time ago and play golf, "but I enjoy it. I guess [I'll quit] when these youngsters (pointing to former Cousins President Dan DuPree) kick me out.
"Other than that, I'm having fun."
Here's a tease of The New York Times article on East Lake:
ATLANTA — When Tom Cousins, an Atlanta commercial real estate mogul, first floated his radical ideas to build a mixed-income housing community, using golf — of all things — as a cornerstone to help resurrect the decaying, crime-ridden neighborhood of East Lake, most of his colleagues and friends — even the mayor of Atlanta — said the same thing.
“They told me I was crazy,” Cousins said last week, smiling as he sat on the porch of a home across the street from East Lake Golf Club, where 30 of the world’s best golfers are competing for a $7 million purse in the Tour Championship, the last of four events in the playoffs for the FedEx Cup.
Crazy was not the worst word Cousins heard to describe him and his plan to improve a neighborhood that was one of the worst crime zones in the country. He was opposed by many of the people he sought to help and by many government agencies.
“I wasn’t so sure about him,” said Eva Davis, a resident of the East Lake Meadows housing project since the 1970s. “We had heard so many promises before from other rich people who said they’d change things and never did. Why should we trust this one? He had to prove himself.”
Cousins, whose company had built much of the skyline of Atlanta, and who had been instrumental in bringing the N.B.A. and N.H.L. to the city, was not easily dissuaded.
ATLANTA (Aug. 26, 2014) - AmREIT of Houston has acquired Tuxedo Village Shopping Center near Roswell and Piedmont roads in Buckhead and is considering scraping the center and replacing it with a high-rise mixed-use project.
That's the scoop this morning from longtime commercial real estate reporter Ralph Bivins and RealtyNewsReport.com. Tearing down a low-slung retail development and replaing it with a vertical mixed-use property is part of AmREIT's densification plan for Houston, Bivins reports.
A mere three years ago, Atlanta Business Chronicle ran a story about a previous owner's plans to dress up Tuxedo Village's image.
AmREIT, which paid $28 million for Tuxedo Village Shopping Center, entered the Atlanta market with its acquisition of Brookwood Village, a CVS-anchored retail center in Brookwood Hills, Atlanta's best neighborhood (and not just because I live there).
Here's Bivins' big scoop:
HOUSTON— AmREIT Inc., a Houston-based REIT, is considering a high-rise redevelopment of a Buckhead shopping center it has purchased in Atlanta.
AmREIT may be pursuing in Atlanta the same densification strategy is it pursuing in Houston’s Uptown District – tearing down one-story retail and replacing it with high-rise office, hotel or condo towers.
AmREIT paid $28 million to acquire Tuxedo Festival Shopping Center in Buckhead in the Buckhead submarket of Atlanta, a 54,643 square foot shopping center located on 3.96 acres in the Buckhead submarket of Atlanta.
The center is located on Roswell Road, just south of Chastain Park and just north of Piedmont Center in affluent Buckhead, at the intersection of Roswell Road, Piedmont Road and Old Ivy Road.
Tuxedo Festival benefits from over 48,800 households within a three-mile radius of the property, daytime employment within the same radius of over 109,000, and average household income of over $130,800 within a one-mile radius, according to Sites U.S.A. Tuxedo Festival is 87 percent occupied with tenants including Regions Bank, Zoe’s Kitchen, and Flip Burger.
Kerr Taylor, AmREIT’s Chief Executive Officer, commented, “We are very pleased with the acquisition of Tuxedo Festival – a jewel in Buckhead that epitomizes our trademark of an Irreplaceable Corner. Its location serves the most affluent Buckhead neighborhoods and some of the densest concentrations of commercial real estate in the Southeast. This exciting new investment will immediately grow cash flow and net operating income, while creating longer term opportunities to potentially capitalize on the 440,000 SF of maximum development density, which could include high rise residential, office, additional retail and parking.”
AmREIT was subject to a takeover appeal by Regency Centers, but it rejected a $22 per share offer. Jacksonville-based Regency says its still interested in a combination of the companies.
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 (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."
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