Atlanta is the new leader in the amount of space leased compared to the amount vacated, achieving 705.8 megawatts of positive net absorption in 2024, according to the firm’s North American data center trends report.

Last year, Atlanta absorbed nearly 39 times more space than at year-end 2023 (18 MW). The market recorded the highest volume of colocation leasing activity ever, spurred by GPU-as-a-Service tenants.

GPUaaS is a cloud-based service that allows on-demand access to high-performance graphics processing units, or GPUs.

A colocation data center facility allows businesses to rent space to house their servers, networking equipment and storage devices. It will enable them to place their hardware in a third-party data center while maintaining ownership and control over their equipment, unlike a cloud service where the provider owns the infrastructure.

Astounding numbers

The data center inventory numbers in the Atlanta market are astounding. Last year, it increased by 222 percent to 1,000.4 MW as the market accommodated demand by ramping up data center space under construction.

In the year’s second half, the market saw 2,159.3 MW under construction, representing a 195 percent annual increase in under-construction totals. That tops the eight primary North American data center markets in CBRE’s report.

As for new developments in the market, AWS plans to invest $11 billion in new data center development. Meanwhile, Lincoln Property Co.’s acquisition of a DXC data center shows it plans to redevelop it into a 30 MW colocation facility.

Ryan Mallory, Flexential’s COO, told Commercial Property Executive that Atlanta is emerging as the new “data center alley.”

GA Power/Southern Co. recently brought the Vogtle reactors online, delivering approximately 4GW of power capacity and unlocking significant development potential, Mallory said.

READ ALSO: Data Center Demand Keeps Surging Despite Challenges

“Additionally, Georgia has implemented robust sales tax incentives to attract high-paying jobs to communities hosting data centers,” he added. “This powerful combination of abundant power, available land and supportive communities has firmly placed Georgia on the technology map.”

However, Georgia is not the only market experiencing this surge.

In Texas, markets such as Dallas-Fort Worth, Austin and San Antonio have grown remarkably in the past 24 months, according to Mallory.

“These cities benefit from reliable power, a favorable tax environment, a high-quality workforce and communities that welcome the data center industry—a sector known for its high-paying, low-impact nature,” he said.

Overall, the exceptional quality of the product and the availability of land and power differentiate the U.S. market, Mallory added. “With historically high-growth regions slowing or pausing data center development, there has never been a better time to be in the data center business in North America.”

CBRE said tax incentives, available land and greater power accessibility make markets such as Charlotte, Northern Louisiana and Indiana potential growth areas for hyperscale and colocation providers.

This, despite some saying that Deep Seek might curb data center demand.

As for investment, CBRE reported that the average sale price increased year-over-year. Eleven asset sale transactions exceeded $90 million, while five surpassed $400 million.

AI impacts data center project locations

“As the demand for data centers has increased significantly, we have seen a shift in where these projects are being developed,” Todd Johnson, director of real estate development at Ryan Cos., told CPE.

“Traditionally, data centers were situated near metropolitan areas to minimize latency, but newer AI models have reduced the need for this proximity. Now, data centers are being developed in more remote locations where there is ample power supply.”

Seeking more energy

Avison Young’s data center market report for the fourth quarter of 2024 indicates that data center inventory continues to hit record highs in the U.S., with commissioned colocation power expanding nearly 50 percent over the previous 12 months. Yet, vacancy rates remain at historic lows, at just 1.6 percent.

In 2024, CBRE stated that North America doubled the data center supply under construction compared to the previous year to a record 6,350.1 megawatts. This is a 12-fold increase from the 456.8 MW under construction in 2020.

Given this growth, the energy needed to power these assets has become a focus.

As power generation and transmission timelines continue to stretch with rising demand, more data center developers are considering self-generation as a temporary supplement or a long-term solution, according to Howard Huang, a market intelligence analyst with Avison Young.

“Natural gas is gaining traction due to its abundance, affordability and faster deployment compared to waiting on grid transmission while sidestepping many of the limitations of solar and wind.”

Andrew Batson, head of U.S. Data Center Research for JLL, told CPE that the North American data center market reached unprecedented demand levels in 2024, with vacancy rates plummeting to record lows amid insatiable tenant demand and limited supply.

JLL’s research found that most markets have doubled or tripled since 2020.

“Power availability remains the primary challenge, with average wait times for grid connections extending to four years in most markets,” Batson said.

“As a result, data center development is expanding into new territories in search of power, with emerging markets seeing increased activity. In 2024, AI represented about 15 percent of data center workloads; by 2030, it could grow to 40 percent. AI will be a key source of growth for the sector.”

The post This Market Tops the Nation for Data Center Absorption appeared first on Commercial Property Executive.

CTO Realty Growth has purchased Ashley Park, a 559,000-square-foot retail center in Newnan, Ga., for $79.8 million. The previous owner was Apollo Global Management, which had bought it for $89.8 million in 2015, according to CommercialEdge information.

CTO acquired Ashley Park below replacement costs, President & CEO John Albright said in prepared remarks. Having below-market rents, the asset provides an opportunity for strategic lease-up, he added.

Ashley Park occupies 60 acres at 354 Newnan Crossing Bypass, near the intersection of Interstate 85 and Georgia State Route 34, about 38 miles southwest of downtown Atlanta. The shopping center receives roughly 6 million visits per year.

READ ALSO: What Defines the Best CRE Investments Today?

Dick’s Sporting Goods, Best Buy, Barnes & Noble, Regal and Dillard’s anchor the property, which was 93 percent leased at the time of sale. Dick’s Sporting Goods is also CTO’s fifth-largest tenant.

Greater Atlanta’s retail vacancy rate stood at 3.7 percent in December, 50 basis points below the five-year average, according to a report by Colliers. A shortage of supply—only 544,000 square feet of product were underway in December—and several retail chain closures contributed to the tight index.

CTO’s growing retail footprint

With this purchase, CTO’s portfolio reached 5.2 million square feet, marking a 12 percent growth. Last year, the company expanded its footprint by 1.3 million square feet across six retail properties and one vacant parcel.

The most important deal closed in August, when the firm purchased three open-air shopping centers totaling roughly 1.2 million square feet for $137.5 million. The properties are in Charlotte, N.C., Tampa, Fla., and Orlando, Fla.

The post CTO Realty Grows Atlanta Footprint With $80M Buy appeared first on Commercial Property Executive.

As one of Atlanta’s most historically rich and culturally vibrant neighborhoods, West End is on the cusp of a transformative redevelopment. The reimagining of the 1973-built Mall West End into One West End is more than just a construction project—it’s a collaborative effort shaped by the voices of the local community.

Built on a 12-acre site, the old mall is set to be demolished and replaced by a mixed-use project following a $450 million investment from developers The Prusik Group and BRP Cos.

With a phased timeline leading up to a 2028 completion target for the first phase, this project aims to preserve the essence of West End while ushering in a new era of opportunity. Plans call for 125,000 square feet of retail, including a grocery store, a fitness center, diverse dining options and local boutiques, as well as approximately 900 mixed-income residences, including affordable and student housing, a 150-key hotel and 12,000 square feet of medical office space.

Commercial Property Executive reached out to BRP Cos. Managing Director Andy Cohen and The Prusik Group Principal Andrew Katz for details about their plans at One West End.

READ ASLO: What’s in Store for Retail in 2025?

This is a massive project with broad implications for the those living in the neighborhood. To what extent have community voices had an influence on this development so far?

Katz: We’ve been collaborating with the local community since day one. Over the past three and a half years, both public and private community members have played a crucial role in the planning process and have been deeply involved at every step. We’ve listened to the community to understand what services are most important to them and, more critically, to identify what’s missing. The invaluable insights and feedback from the community have guided us in shaping a plan that truly reflects their vision. 

How do you plan to honor the cultural heritage of Mall West End within the new development?

Cohen: The historic West End of Atlanta is a vibrant neighborhood rich in history and cultural diversity. We’re still in the early stages of our project, with the existing mall closing at the end of January. At this time, the digital time capsule is our first activation for the Mall West End to be honored in the community, but there are certainly many more activations to come down the pipeline in the years ahead. The next activation will be the groundbreaking ceremony. 

What will happen with the legacy tenants at the former mall? Are you supporting them in any way?

Katz: Many of these tenants have been integral to the community and the property’s history for decades, fostering relationships with generations of families who shop at their businesses. To ensure these long-standing businesses remain operational during the construction phase, several tenants will be relocated to a temporary onsite space at 850 Oak St.

This allows them to continue serving the community throughout the project’s duration. The tenants relocating include The Burning Sands, Dendera Cosmetics, True Hair and American Deli, while Planet Fitness will remain in its current location during the first phase. All of these businesses will also have the opportunity to move into permanent locations within One West End once it opens. 

How will the addition of grocery stores, fitness center and particularly a hotel impact the neighborhood and existing local businesses in the area?

Katz: Once complete, the property will feature approximately 125,000 square feet of retail space, featuring a diverse mix of tenants, including a grocery store, fitness facility, traditional in-line retail, food and beverage options and local boutiques. We also intend to include affordable commercial space designated for qualified small, local businesses. Additionally, the development includes a planned 150-key hotel.

The addition of key anchor businesses, such as grocery stores and fitness centers, is essential to our strategy of driving foot traffic and encouraging visitors to stay and shop, rather than just passing through. Currently, the neighborhood lacks hotels, so visitors are forced to stay downtown or in nearby areas. With the new hotel, visitors will now have the opportunity to stay in West End, supporting local businesses and directly contributing to the community’s economic growth. By introducing grocery and fitness-anchored retail alongside the hotel, we’re creating consistent touchpoints for both residents and visitors. This will ultimately boost foot traffic, foster a lively environment, and enhance the safety, prosperity and overall well-being of businesses and consumers alike. 

Tell us more about the residential component of the project. How many of the 900 residences will be dedicated to low-income residents?

Cohen: One West End will feature approximately 900 mixed-income residences, with at least 30 percent of the units available to those earning between 50 percent and 80 percent of the area median income. Situated just steps away from the Atlanta University Center Consortium—the oldest and largest consortium of historically Black colleges and universities in the world—the property will also provide housing options specifically designed for students. Eligibility for housing will be determined based on income qualifications.

Are there any sustainability or green building practices being incorporated into the design of One West End?

Cohen: Yes, while we are in the early stages of the design process, we can confirm that sustainable and green building practices will be integral to this project’s design and construction. Across our portfolio, many of our developments meet green criteria, including LEED certifications, Enterprise Green Communities and other relevant metrics based on building type and location.

Since our inception, we have prioritized developing properties that serve the people who live, work and use these buildings every day. This commitment involves successfully engaging in complex, large-scale public-private partnerships and designing sustainable structures that contribute to a cleaner environment. 

READ ALSO: Which Asset Classes Stole the Spotlight in 2024?

Can you provide an update on the project’s timeline and any potential challenges you foresee in meeting the 2028 completion target for the first phase?

Cohen: The redevelopment of the Mall West End will be a multi-year process, with the project team actively engaging residents, legacy business owners and other stakeholders throughout the process. Demolition will begin this year, with phase one completion slated for late 2028, early 2029. 

Katz: One of the main challenges we face is the size of the site, which we’re working to reconnect and revitalize. Right now, it’s an outdated mall with a large surface parking lot. Our plan involves reconstructing the street grid, upgrading infrastructure, utilities and more. This project isn’t just about building one structure, it’s about completely rebuilding and reintegrating the site into the surrounding neighborhood, creating a cohesive and connected community within its footprint. 

How do you envision One West End evolving over the next decade in relation to the West End community?

Katz: Looking ahead, we see One West End becoming a central hub for the West End community. Right now, the area lacks a true neighborhood center, but our project is designed to fill that gap by connecting AUC students, local residents, businesses and the health-care sector. With additional redevelopments planned for the Mall West End site and improved access to amenities such as grocery stores and fitness centers, One West End will evolve into a vibrant, bustling destination.

Cohen: This project will create a safer, more welcoming neighborhood while instilling a sense of pride in the community. By offering housing and local job opportunities, we aim to ensure that people can live, work and thrive right here. Ultimately, we’re building a more integrated, prosperous community, laying the foundation for a brighter and more prosperous future for the West End. 

The post Bridging Past and Future: Inside the One West End Redevelopment in Atlanta appeared first on Commercial Property Executive.

An affiliate of Northside Hospital has purchased Glenridge Point, a 184,912-square-foot office complex in Sandy Springs, Ga. Richmond Honan Development & Acquisitions sold the two-building property for $14.2 million, according to CommercialEdge information.

Colliers Senior Vice President Tom Davenport and Vice President Dany Koe worked on behalf of the receiver, B. Riley Advisory Services.

The office complex last traded in 2018, when Richmond Honan acquired the asset for $44.5 million in a portfolio transaction from Pope & Land Enterprises, the same source shows.

Office complex on Pill Hill

Located at 100 & 200 Glenridge Point Parkway, the property is at the intersection of Interstate 285 and Georgia Highway 400. The office complex is nearby the Pill Hill medical hub and some 14 miles from downtown Atlanta.

Completed in 1970 on 3.6 acres, the five-story Glenridge Point incorporates floorplates ranging between 18,417 and 18,771 square feet, four passenger elevators and a total of 670 car parking spaces. The low-rise property underwent renovations between 1999 and 2016. Amenities feature outdoor space with seating area and EV parking spots.

The tenant roster includes eVestment and Keller Williams Realty First Atlanta, among others, according to CommercialEdge.

In the last quarter of 2024, office sales in the U.S. totaled $9.1 billion across 365 transactions, covering 46.9 million square feet. This marks a significant decline compared to the previous quarter, with a 37.1 percent drop in sales count and a 25.3 percent decrease in square footage.

Year-over-year comparisons also show a decline in office investment activity, with the last quarter of 2023 ending with $11.2 billion across 612 office sales.

The post Atlanta Office Complex Trades for $14M appeared first on Commercial Property Executive.

This first phase consists of two speculative Class A warehouses totaling 1,556,350 square feet on 215 acres. Building 1 measures 538,450 square feet, while Building 2 is 1,017,900 square feet.

The cross-dock facilities feature 40-foot clear heights, 185-foot concrete truck courts, abundant trailer and car parking, more than 290 dock door positions and four drive-in ramps. Each building features a roofing system that can accommodate future solar panels, ample electrical service, an ESFR fire protection system and a 3,900-square-foot, air-conditioned office area.

A Trammell Crow spokesperson confirmed to Commercial Property Executive that there is no leasing at the property yet.

READ ALSO: Atlanta’s Industrial Sector Among the Busiest in 2024

Designing of Jackson 85 North’s second phase is underway and includes two additional speculative warehouses measuring 210,080 and 524,160 square feet. Phase Two could also accommodate a build-to-suit warehouse of up to 750,000 square feet.

When the project was first announced in January 2023, the plans for the second phase featured a single building of about 700,000 square feet.

Jackson 85 North is about 60 miles northeast of Atlanta, with easy access to Interstate 85 and the rest of metro Atlanta.

Marketing and leasing for the entire project are being led by Wilson Hull & Neal Real Estate.

Ports, inland and not

Metro Atlanta’s northeast submarket will be benefitting from a major development by the Georgia Ports Authority, according to a new report from CBRE. The 104-acre Northeast Georgia Inland Port is expected to break ground within the next year.

The inland port will feature 9,000 feet of working track initially, a quantity that will eventually double, as well as a start-up capacity of 80,000 container lifts, all to be served by Norfolk Southern. Strategically, the facility is intended to expand the Port of Savannah’s reach into Northeast Georgia, in part from the fact that it’s less than 20 miles from I-85.

In late October, Trammell Crow Co. and MetLife Investment Management completed a quite different industrial project at the other end of the U.S., a two-story industrial property totaling about 702,000 square feet. Seattle Metro Logistics is about 3 miles from the Port of Seattle.

The post Trammell Crow, CBRE IM Deliver 1st Phase of Atlanta-Area Project appeared first on Commercial Property Executive.

Moreover, the market had 8.2 million square feet under development during the same period, significantly surpassing the 3.3 million square feet recorded in December 2023.

Despite this growth, the metro’s vacancy rate increased 310 basis points year-over-year, as the influx in new supply put a dent in the metro-level average. Throughout the year, 9.3 million square feet of industrial space was delivered.

However, recent major projects underscore the market’s resilience and robustness. In January, Hines and Aubrey Corp. announced plans for a 10 million-square-foot mixed-use development, encompassing more than 2,390 acres. The industrial segment of this project will occupy more than 1,200 acres across two campuses, with the rest of the space being used for data center, retail, hotel and residential purposes.

Development pipeline grows, still below national average

At the end of December, Atlanta’s industrial sector had 8.2 million square feet under construction, more than double the 3.3 million square feet registered in December 2023. The 26 projects in the pipeline are expected to account for 1.4 percent of the metro’s total inventory.

The market’s development index was below the 1.7 percent national average, but above peer markets such as Chicago (0.5 percent), Indianapolis (1.2 percent) and New Jersey (1.0 percent). Phoenix (4.5 percent) continued to lead nationally.

At the end of the year, The Broe Group acquired a 14-acre site in Georgia’s Fulton County Industrial District for the construction of a 225,000-square-foot build-to-suit facility. The building will have rail service, with pad-ready construction expected this February.

Additionally, 18 projects totaling almost 4.9 million square feet broke ground last year. One of them is Stonemont Financial Group’s Stonemont Park 75 South, a 903,701-square-foot industrial development in Locust Grove, Ga. In June, the firm obtained a $42.5 million construction loan for the three-facility campus.

Industrial completions remain steady

Last year, Atlanta’s industrial market saw 26 properties coming online, totaling almost 9.3 million square feet—about 1.6 percent of the metro’s total inventory. This figure was slightly lower than the 9.7 million square feet completed in 2023.

Compared to peer markets, only Indianapolis (6.1 million square feet) and Kansas City (4.5 million square feet) saw less space delivered. Phoenix (32.7 million square feet) saw the most completions, followed by Dallas (29.1 million square feet) and Chicago (14.9 million square feet).

Last year, Panattoni Development completed the almost 1.4 million-square-foot Building 6 within Speedway Commerce Center, a 546-acre industrial campus in Hampton, Ga. Target agreed to prelease the distribution center in October 2023.

Assets trade for less, investment volume grows

Atlanta’s industrial investment volume reached roughly $2 billion last year, about $100 million higher than in 2023. However, assets traded on average for $108 per square foot, a slight year-over-year decrease from $116.

Among peer markets, New Jersey ($213 per square foot) and Phoenix ($162 per square foot) remained in the spotlight, while Chicago ($92 per square foot) and Indianapolis ($73 per square foot) were at the opposite end of the spectrum.

In one of the largest deals in the metro from last year, ATCAP Partners purchased Gwinnett Park, a 12-building, 753,700-square-foot light industrial park. Dogwood Industrial Properties, an investment platform of TPG Real Estate, sold the campus completed between 1973 and 1986.

Atlanta’s vacancy rate among the lowest nationally

At the end of December, Atlanta’s industrial vacancy rate clocked in at 6.8 percent, 310 basis points higher year-over-year. However, the figure is still 1.2 percent below the national average. Among peer markets, the metro had one of the lowest vacancy rates, while Indianapolis (9.8 percent) and Chicago (9.7 percent) had the most available space.

In November, Samaritan’s Purse signed a 172,000-square-foot, full-building lease at a warehouse at 1347 Highway 92 in Acworth, Ga. The charitable organization will use the space to process Christmas gifts for children. Prologis acquired the facility in 2023 from Link Logistics.

Other notable leases in the area include Souto Foods’ commitment to 200,000 square feet at Sugarloaf Logistics Hub, a 2.2 million-square-foot master-planned industrial development in Lawrenceville, Ga. Foxfield and AEW Capital Management are the owners of the property that also includes a cold storage element.

The post Atlanta’s Industrial Sector Among the Busiest in 2024 appeared first on Commercial Property Executive.

Hines and Aubrey Corp. have teamed up to develop Aubrey Village, a mixed-use project spanning more than 2,390 acres in Bartow County, Ga., within Greater Atlanta. The multi-phase development’s timeline will stretch up to 12 years.

The industrial component will take up more than 1,200 acres across two separate campuses that are located on the project’s opposite ends. Another 600 acres are entitled for a mixture of retail and residential uses.

Upon completion, Aubrey Village will encompass up to 10 million square feet of manufacturing, data center, logistics, retail, restaurant and hotel spaces, as well as residential properties. The housing component will feature single-family homes, townhomes and apartments for 2,800 families.

READ ALSO: Why Mixed-Use Developments Are All About the Right Synergies

During Phase One, which is scheduled to kick off later this year or early 2026, Hines will work on the site’s infrastructure. Aubrey Parkway, the mixed-use development’s primary roadway, will connect all sections of the project.

Aubrey Village will take shape roughly 52 miles northwest of downtown Atlanta within Pine Log, a 14,000-acre former wildlife management area that The State Department of Natural Resources leased for almost 50 years. That changed in May 2023 when Aubrey Corp. opted not to renew the agreement.

Lee & Associates Executive Vice President Jim Ramseur and Research Coordinator Samantha Wheeler represented Aubrey Corp. in creating the joint venture with Hines. Ramseur Real Estate Advisors will provide counsel on the commercial and residential parcels.

Close to several employment centers

Situated alongside U.S. Route 411 at the Interstate 75 interchange, the site is also close to several current and future large employers operating in Bartow County.

Hyundai Motor Group, together with SK On, invested up to $5 billion in a new electric vehicle battery manufacturing facility at Bartow Centre, a zoned manufacturing and industrial site located on Highway 411. That factory is set to become operational this year.

Qcells, a solar industry operator, also invested $2.5 billion in a manufacturing facility within the county’s borders. Upon delivery, the property will produce 3.3 gigawatts of solar ingots, wafers, cells and finished panels. Construction work began in 2023.

And, earlier this month, county officials approved the rezoning of another 500 acres at Pine Log. The site, to be transformed into a granite mining quarry, is about 9 miles from the future Aubrey Village.

The post Hines JV Eyes 10 MSF Atlanta Mixed-Use Project appeared first on Commercial Property Executive.

Atlanta’s office sector headed toward 2024’s end with mixed performance, but continued to show more resilience than other Sun Belt markets, CommercialEdge data shows. Office buildings in Atlanta still traded at below-average rates, while the market’s overall vacancy managed to remain at relatively healthy levels, considering the sector’s woes.

A new coworking provider entered the market in 2024, while overall investment volume remained muted. Development was active in some areas, notably with big life science projects taking shape, along with some mixed-use.

Supply expansion stays on track

Atlanta had 1.7 million square feet of office space under construction as of November, which was 0.8 percent of existing inventory—on par with the national figure. Adding planned and prospective developments to the mix brings the share to 2.3 percent of stock.

Compared to other Sun Belt metros, Atlanta was severely behind Austin, Texas (3.7 percent of stock underway), but slightly ahead of Charlotte (0.7 percent) and Houston (0.7 percent).

READ ALSO: Office Report: Coworking Spaces Evolve for Post-Pandemic Needs

Portman Holdings’ office building within the mixed-use Spring Quarter project had been the largest under construction as of November—it was completed last month. The asset has 530,000 square feet of office, 15,000 square feet of private terraces and 20,000 square feet of amenity space. The larger mixed-use development is also slated to eventually include 40,000 square feet of retail, 370 luxury rental units and 600 market-rate units.

Developers completed 11 office buildings encompassing 1.6 million square feet across metro Atlanta year-to-date through November. This was 0.7 percent of existing inventory, 10 basis points above the U.S. and 20 basis points ahead of Houston (0.5 percent).

Georgetown Co., Beacon Capital Partners and RocaPoint Partners completed the first building of Campus 244, an adaptive reuse of a 1970s building, in the Perimeter North submarket. The asset has 377,775 square feet of rentable office space and is part of a larger mixed-use project, which is set to also include restaurants, retail and a hotel.

Another significant completion earlier in 2024 was Trammell Crow Co.’s first phase of Science Square, developed in partnership with Georgia Advanced Technology. The 368,258-square-foot building includes lab and clean room space, base-building systems, a 38,000-square-foot solar array and an energy recovery system.

Conversion potential grows

As office utilization continues to evolve and demand is nowhere near pre-pandemic levels, many owners are looking toward alternative solutions. Conversions to residential use continue to rise in popularity and Atlanta’s office sector is no exception. CommercialEdge created the Conversion Feasibility Index, a score calculated from various building characteristics aimed to help developers and investors identify office assets that have a high potential for conversion.

Atlanta had 16 office buildings—encompassing 2.6 million square feet—in the Tier I category for office-to-residential conversion, which have a CFI ranging from 90 to 100. It also had 74 properties—11.7 million square feet—in Tier II, which have a CFI between 75 and 89.

Invest Atlanta partnered with several companies—including The Integral Group, The Atlantic Cos., T. Dallas Smith & Co. and Lalani Ventures—to redevelop three office assets in the metro’s CBD, Atlanta Business Chronicle reported. The buildings at 1, 2 Peachtree St. and 14 Marietta St. total nearly 2 million square feet and are estimated to yield roughly 600 multifamily units, but plans are not final yet. Originally an office tower, 2 Peachtree St. NW dates back to 1966 and rises 44 stories. Holding a CFI score of 75, the property is slated to include 200 affordable units upon conversion.

Atlanta office sector’s vacancy below nation’s average

Office vacancy across metro Atlanta stood at 17.8 percent as of November, up 80 basis points year-over-year. Meanwhile, the national average increased 120 basis points, to 19.4 percent. Compared to its Sun Belt peers, Atlanta’s vacancy fared better than Austin (27.7 percent) and Houston (24.3 percent), but lagged Charlotte (16.4 percent).

Significant lease deals this year included a mix of renewals and new agreements. In September, T-Mobile renewed its 100,000-square-foot lease at CP Group and Farallon Capital Management’s One Ravinia.

In November, Jamestown signed a new tenant at its Ponce City Market. CONA Services agreed to occupy 49,000 square feet at the mixed-use property. The IT company will relocate from its 10 10th St. NE office, where it occupies 32,600 square feet.

Some larger deals took shape earlier this year, such as Building and Land Technology’s 180,000-square-foot agreement at Concourse Office Park in Sandy Springs, Ga. Newell Brands is the new tenant, set to move in by mid-2025.

New coworking firm enters Atlanta

In November, Atlanta had around 4.4 million square feet of shared office space, which was 2.1 percent of the market’s total rentable inventory. The coworking segment continued to steadily grow across the metro, with the share of coworking space being 20 basis points above the national figure. Compared to other Sun Belt markets, Atlanta outperformed Charlotte (1.9 percent), Houston (1.8 percent) and Austin (1.7 percent).

Last month, coworking provider e|spaces entered the Atlanta market. The company leased a 32,030-square-foot, full-floor space at Adventus Realty’s 1600 Parkwood Circle asset. Most of Atlanta’s flexible office is in suburban areas, and e|spaces’ first location is no exception, being in the Cumberland/Galleria submarket.

The post Atlanta Office Sector Shows Resilience appeared first on Commercial Property Executive.

Wicker Park acquired the shopping center for $53.5 million back in 2019, according to CommercialEdge data. The property became subject to a $40 million loan originated by Goldman Sachs.

Completed in 1986, the super-regional shopping center comprises two buildings situated on a 31-acre property. The property’s tenants have an average tenure that exceeds 17 years.

Ashley HomeStore, American Signature Furniture, DSW, World Market, Hobby Town, Bassett Furniture, Natuzzi and BrandsMart anchor the property. Cobb Place also features a diverse mix of retailers including Petland, Korean BBQ, Metro PCs, Weight Watchers and Wing Factory, among others.

READ ALSO: Unwrapping Holiday Retail Trends

Located at 840 Ernest W. Barrett Parkway, the shopping center is within Atlanta’s Marietta – Kennesaw submarket. Cobb Place is situated along Interstate 75, one of Georgia’s busiest corridors, and is the state’s second most visited retail area. It is near Kennesaw State University, Cobb County International Airport and Dobbins Air Force Base.

Senior Managing Director Jim Hamilton, Managing Director Brad Buchanan, Director Andrew Kahn and Analyst Anton Serafini led JLL’s Investment and Sales Advisory team working on behalf of the seller.

The same JLL team has recently brokered the sale of Northlake Square, a 82,578-square-foot retail center in Tucker, Ga. Barnhart Guess sold the ALDI-anchored property to Greenberg Gibbons for $17.3 million.

The post Atlanta Shopping Center Commands $64M appeared first on Commercial Property Executive.

Greenberg Gibbons has purchased Northlake Square, a 82,578-square-foot retail center in Tucker, Ga., for $17.3 million. Barnhart Guess sold the asset, in a transaction brokered by JLL. Mutual of Omaha Insurance Co. provided a $10.8 million loan for the acquisition, according to CommercialEdge data.

Completed in 1988 at 4135 Lavista Road, Northlake Square encompasses two one-story buildings on some 6 acres. The grocery-anchored retail center has an average tenure of nearly 20 years.

Anchored by ALDI, Best Buy and Mellow Mushroom, the property has a diverse mix of retailers such as Great Clips, The Georgia Clinic, Wings 101, Fast Signs, My Beauty Unlimited and Lucky Key, among others. The retail center was 98 percent leased at the time of sale.

READ ALSO: What’s Ahead for Retail Investment?

Located some 13 miles from downtown Atlanta, Northlake Square is near Interstate 285, in an area where the daily traffic count reaches approximately 200,000 vehicles, according to JLL. The shopping center serves more than 300,000 individuals within a 5-mile radius.

JLL Senior Managing Director Jim Hamilton, Managing Director Brad Buchanan and Director Andrew Kahn led the Capital Markets Investment and Sales Advisory team which worked on behalf of the seller.

Strong investment across Atlanta’s retail market

Greater Atlanta’s retail market saw strong investment activity this year. More than 8 million square feet of retail space changed hands in the metro for approximately $1.55 billion, according to CommercialEdge data.

The largest deal closed in February, when 5Rivers CRE acquired Fayette Pavilion, Georgia’s largest open-air retail center, for $134 million. Nuveen Real Estate sold the 1.1 million-square-foot asset.

In June, Big V Property Group and Equity Street Capital purchased Johns Creek Town Center, a 303,297-square-foot community shopping center in Suwanee, Ga., from SITE Centers. The transaction marked Big V’s fifth and its largest acquisition in the state.

The post Greenberg Gibbons Buys Atlanta Shopping Center appeared first on Commercial Property Executive.

CBRE’s John Schlesinger represented the tenant, and his colleagues Jeff Keppen and Nicole Goldsmith represented the landlord.

This makes for 170,000 square feet leased at the building in the past six months, including four new tenants, one renewal and two expansions. Bank of America Plaza is renowned for being the tallest building in the Southeast, with nearly 1.4 million square feet of Class A workspace.

This deal extends the sector’s overall momentum this year after last year’s leasing activity met pre-pandemic levels, according to Savills.

So far this year in Atlanta, Avison Young reported that only 12 percent of law firms that have signed deals are downsizing their space, 23 percent are expanding and 26 percent are maintaining their original square footage when renewing their lease. The remaining 39 percent comprises new deals, which include new tenants and locations.

This trend is anticipated to continue since law firms are a heavy office-using industry—the third-busiest sector according to Avison Young’s Office Busyness Index.

While a couple of tenants announced major downsizes within Atlanta, this breakdown and comparison shows that law firms, whether they have an Atlanta presence or are new to the area, are currently active in the market and making moves on committing to office space, according to Avison Young’s analysts.

“Atlanta has seen an influx of new-to-market and existing law firms expanding their presence as the city continues to capitalize on its pandemic-induced population boom,” Rick Nash, principal, consulting & advisory tenant representation occupier services, Avison Young, Atlanta, told Commercial Property Executive.

The region benefits from a strong talent pipeline with many universities and law schools, Nash added. “Peachtree Street in Midtown has become a hotbed for office leasing activity, including law firms, given the multitude of residential, entertainment and dining options as employers look to recruit talent and encourage employees to return to the office.”

Atlanta’s strong office leasing activity

Cushman & Wakefield reiterated Atlanta’s stellar second half, reporting that the market saw 226,500 square feet of leasing activity in the third quarter, higher than the first two quarters combined.

Atlanta’s legal leasing levels in the first half of 2024 were 41 percent lower year-over-year compared to 2023. However, strong leasing activity from firms in the market, along with Morris, Manning & Martin’s 104,000 sf relocation—the largest lease nationally in the third quarter of 2024—has tipped the scales, placing Atlanta’s legal leasing activity 29 percent higher year-over-year than it was through the third quarter of 2023.

Despite the shift toward flexible work arrangements, prestigious law firms continue to commit to substantial office spaces in prime locations, recognizing the importance of in-person collaboration and the need for secure environments to handle sensitive information.

READ ALSO: How Neurodivergent-Friendly Office Design Can Benefit Everyone

There is also a growing emphasis on workplace amenities and experience in the legal sector, with features like state-of-the-art fitness clubs, food halls and modern conference centers becoming increasingly essential in attracting and retaining top talent, according to Edith Gonzalez, managing director, professional services, JLL Work Dynamics.

She told CPE that the choice of location in Midtown Atlanta, near Georgia Tech and numerous Fortune 500 companies, reflects another key trend: law firms are gravitating toward mixed-use, amenity-rich areas that offer easy access to clients, talent pools and innovation hubs.

“This strategic positioning is crucial for firms aiming to stay competitive in the legal services market,” Gonzalez said. “The deal [emphasizes] the ongoing importance of prime office space for law firms while showcasing the evolving expectations around workplace amenities and location—a trend likely to continue in major legal markets across the country.”

Key renewal at Citigroup Center

Also this month, Kluger, Kaplan, Silverman, Katzen, Levine, P.L. announced it has renewed its commitment to Citigroup Center in downtown Miami, relocating to a new premier 17,757-square-foot office space within the 34-story, Class A office tower.

Colliers Vice Chair Stephen Rutchik represented the long-term tenant in the lease renewal. JLL’s Steven Hurwitz, Doug Okun and Madeline Fine represented the landlords, Monarch Alternative Capital, Tourmaline Capital Partners and CP Group, in the transaction.

“Kluger Kaplan’s strategic relocation within Citigroup Center reflects a broader trend of law firms prioritizing workspace quality and employee experience,” Rutchik told CPE.

Their move to a new office allows them to create a state-of-the-art workspace with a modern layout that can accommodate their growing team and enhance collaboration, Rutchik explained. “The firm’s choice to stay in the recently renovated Class A office tower with stunning bay views and premier amenities demonstrates how top-tier law firms use their physical space as a competitive recruitment and client engagement tool.”

Opting for relocation

Many law firms are opting for relocation, according to Peter Billmeyer, SIOR, co-founder & CEO of Bespoke Commercial Real Estate and president of the SIOR Chicago Chapter.

Law firms, like most companies, have had to adapt to a post-COVID world, and what was an acceptable workplace no longer is and likely will never be again, according to Billmeyer.

“We are seeing a major flight to quality, with some old-school ‘White-Shoe’ firms downsizing and settling into their hybrid work strategies. At the same time, some upstarts are growing dramatically.”

It is refreshing to see law firm leaders putting their cultures and teams before their P&L, Billmeyer observed. “Old and new firms deserve great credit for evolving, doing more with less and being committed to a people-focused work environment. We can only hope that leads to a higher quality of life and more reasonable hourly rates.”

The post CP Group Signs Major Law Firm to Atlanta’s Tallest Tower appeared first on Commercial Property Executive.

Terry Commercial Realty intends to develop The Gateway, a 40,000-square-foot restaurant and retail property in the exurban Atlanta town of Jasper, Ga. Plans are still in the early stages, with permitting still ahead.

The property will be part of a master-planned community with about 400 residential units within walking distance of its commercial buildings. All residences are slated for completion before the opening of The Gateway.

Initial renderings focus on a common area and green space that will be flanked by an anchor restaurant on one side and a food hall on the other. Designed to have a town-square vibe, the common area could house a wide variety of events, from morning yoga and cornhole tournaments to live music, Dave Terry, president & founder of TCR, said in prepared remarks.

READ ALSO: Retail’s Big Space Race

Evan Lockwood at Wilson Hutchison Realty, the project’s leasing agent, envisions such tenants as coffee shops, pizzerias, boutique retail and coworking spaces. The locally based TCR itself dates from late 2022, with a focus on development and redevelopment efforts in Pickens County.

The property will be off the main road through the area, Georgia State Route 515, which connects northern Georgia’s mountainous region with the outer suburbs of Atlanta. Jasper, seat of Pickens County, is in the northern reaches of the Atlanta MSA.

Atlanta retail in demand

The greater Atlanta retail market is tight, with a vacancy rate of 3.7 percent in the third quarter of this year, according to a Colliers report. The rate witnessed was up 30 basis points over the year, but still remained below the market’s five-year average by 50 basis points.

Though demand is there, supply continued to grow at a relatively slow pace. The market’s new deliveries totaled 230,000 square feet in Q3, barely above half of the square footage that came online same time last year.

Meanwhile, Atlanta’s retail development pipeline reached an all-time low at 800,000 square feet. During the third quarter of 2023, 1.9 million square feet were underway.

The post Terry Commercial Eyes Greater Atlanta Retail Development appeared first on Commercial Property Executive.

SouthState Bank has signed a long-term, 87,000-square-foot lease at Prominence Tower in Atlanta. New York Life Real Estate Investors owns the 433,000-square-foot office building.

Part of the deal involves SouthState Bank receiving top-of-building naming rights, as the company is now the largest tenant at the property.

Partners Real Estate’s Aileen Almassy and Andy Sumlin represented the owner, while JLL’s Josh Hirsh and Patrick Baughman worked on behalf of the tenant.

The Atlanta office market had a 17.8 percent vacancy rate in October, according to a recent CommercialEdge report. While 160 basis points lower than the national rate, the index was up by 80 basis points over the year.

LEED Gold-certified office tower

NYL Real Estate Investors acquired Prominence Tower in December 2018 from Crocker Partners—now CP Group—for $166 million, according to CommercialEdge data. A five-year, $86.6 million loan originated by Equitable financed the transaction.

Located at 3475 Piedmont Road NE in the Buckhead district, the Class A property rising 19 stories has average floorplates of 24,000 square feet. During the pandemic, the ownership invested $8 million in renovations and, in 2020, Prominence Tower received the LEED Gold and Wired Platinum certifications.

Property amenities currently feature a conference facility, lobby coffee bar, fitness center and bike storage room, as well as a seven-level parking garage attached to the main building. The tenant roster includes GE Digital, Jones & Kolb, Waypoint Residential, Prophet and NetRoadshow Inc.

The office building is some 9 miles from downtown Atlanta, within walking distance of many restaurants, shops and hotels. Buckhead MARTA station is less than 1 mile away; Georgia State Routes 141 and 400 are also nearby.

The post Bank Leases 87 KSF at Atlanta Office Tower appeared first on Commercial Property Executive.

Foxfield has acquired a 169,252-square-foot industrial building in Duluth, Ga., within Atlanta’s Northeast submarket.

The property changed hands for $19 million from seller Barco, according to CommercialEdge. The same source shows that the new ownership also secured a $8.6 million acquisition loan from Aegon Insurance Co., with a maturity date set for 2031.

JLL and Hailey Realty Co. worked on behalf of the seller. The deal was a sale-leaseback agreement, with Barco continuing to fully occupy the space under a six-year, triple-net lease.

Foxfield expanded in the Southeast region with this deal and also marked the 14th acquisition made through its Foxfield Open-End Fund, that opened in 2020 and has been targeting fully leased Class A and B industrial and flex/R&D assets.

The industrial facility came online in 1998 and is at 3059 Premiere Parkway. The property includes 24-foot clear heights, front-load configuration, seven dock-high doors, two drive-in doors and ample parking space.

The 12-acre asset is close to Interstate 85 and U.S. Route 23, allowing easy access to major transportation routs in the Atlanta region. DeKalb-Peachtree Airport is 19 miles from the facility, while Atlanta is 28 miles away and Hartsfield-Jackson Atlanta International Airport is within 40 miles.

Senior Managing Directors Dennis Mitchell, Matt Wirth and Britton Burdette, together with Director Jim Freeman with JLL’s Investment Sales and Advisory team negotiated on behalf of the seller. Hailey Realty Co.’s Executive Vice President Howard Boyd and Vice President John Crawford also provided assistance.

Atlanta industrial metro among the best in the U.S.

The industrial real estate investment volume in metro Atlanta reached nearly $2 billion as of October, according to a recent CommercialEdge report. The volume put Atlanta among the top 10 best-performing industrial markets in the U.S. Industrial properties traded at an average sale price of $116 per square foot, below the national average of $129 per square foot, while in-place rents reached $6.06 per square foot, marking a 9 percent year-over-year increase.

In October, Faropoint purchased two light-industrial properties in Doraville, Ga. and Morrow, Ga. The assets are totaling some 253,500 square feet of space and traded from Ivanhoé Cambridge, with the assistance of the same JLL team.

Another notable deal in Atlanta was Adler Real Estate’s $49.6 million acquisition of a four-building industrial campus that was 97 percent leased at the time of the sale. JLL represented the seller and helped in securing the acquisition financing.

The post Foxfield Expands in Atlanta With $19M Purchase appeared first on Commercial Property Executive.

The property will have rail service from Fulton County Railroad. It is one of four OmniTRAX railroads in Georgia that connect customers to the North American rail network, providing rail, port and market access to the Southeast. Pad-ready construction is expected in February 2025.

The area provides a rare infill redevelopment opportunity within Atlanta’s I-20W submarket, home of industry giants such as UPS, Amazon, Lowes, Google and Walmart. Also nearby are the world’s busiest airport (Hartsfield-Jackson) and immediate access to Atlanta’s three converging interstate systems.

A strong industrial market

“Atlanta’s industrial market remains one of the most sought-after in the Southeast, driven by its connectivity, skilled workforce and growing population,” Marc Civitillo, managing director of acquisitions, SkyREM, told Commercial Property Executive.

SkyREM is expanding its portfolio nationally and across the Southeast, including recent acquisitions of a nearly 650,000-square-foot facility in Savannah, Ga. and a 1 million-square-foot facility in Macon, Ga.

READ ALSO: Top 10 Markets for Cold Storage Development

“We are continuously seeking new acquisition opportunities in Atlanta and other key markets, focusing on properties that offer modern facilities with strategic access to distribution networks, ports and rail infrastructure to meet the rising demand for industrial space,” Civitillo said.

The rail connectivity advantage

In June, OmniTRAX, was named the exclusive railroad operator for Ports of Indiana – Mount Vernon. OmniTRAX operates 27 railroads, serving ports and industrial parks nationwide. The new rail agreement serving the 1,200-acre port began in August and is the fourth domestic port in the OmniTRAX network.

Ports of Indiana-Mount Vernon has an estimated budget of $1.6 billion and handles more cargo than any other port in the state.

A year ago, South Korea-based automotive part supplier Kyungshin America Corp. selected Savannah Gateway Industrial Hub, a 2,700-acre industrial park sited 12 miles outside the Port of Savannah in Rincon, Ga., to locate its new distribution center.

The master-planned development is owned by a public-private partnership including The Broe Group, its transportation affiliate OmniTRAX and the Effingham County Industrial Development Authority. Construction began in 2019 with the development of a 1 million-square-foot building. Upon completion, the master-planned project is set to comprise 18 million square feet.

The post The Broe Group Plans Build-to-Suit Atlanta Project appeared first on Commercial Property Executive.

Samaritan’s Purse has signed a lease to occupy the entire 172,000-square-foot warehouse at 1347 Highway 92 in Acworth, Ga. Prologis owns the facility, according to Cherokee County records. Lee & Associates negotiated on behalf of the tenant while the owner had in-house representation.

The nondenominational evangelical Christian organization plans to use the space as a processing center for Operation Christmas Child, a charitable effort involving the shipping of gifts to children worldwide. Including this new space, Samaritan’s Purse will use eight warehouses across the U.S. to process the gifts.

READ ALSO: SIOR Special Report: Q&A With the President

Prologis paid $24.6 million for the asset in 2023, acquiring it from Link Logistics, public records show. The 2016-completed building has 32-foot clear heights, 43 dock doors and two drive-in doors, as well as 149 auto parking spaces. It also includes 8,249 square feet of office.

Samaritan’s new warehouse is less than 1 mile from Georgia State Route 92 and Interstate 75, as well as roughly 30 miles northwest of downtown Atlanta and about 41 miles from the Hartsfield-Jackson Atlanta International Airport.

Lee & Associates Partner Brett Chambless, SIOR, represented Samaritan’s Purse. Prologis Senior Vice President Kent Mason led the negotiations on behalf of the owner.

Metro Atlanta industrial vacancy rate below historical average

Atlanta’s industrial vacancy rate grew 50 basis points quarter-over-quarter, to 7.4 percent in September, according to a report by Cushman & Wakefield. Despite the increase, the percentage was still under the 20-year historical average of 7.9 percent. New industrial leasing activity hit 7.3 million square feet in the third quarter, the highest it’s been since 2022’s fourth quarter.

As industrial deliveries softened—just 4.9 million square feet in the same period, the lowest since 2021’s second quarter—and the 10.1 million-square-foot pipeline registered in September tapered off, metro Atlanta’s vacancy rate is slated to stabilize in 2025, Cushman & Wakefield forecasted.

Last month, Souto Foods agreed to occupy 200,000 square feet at Foxfield and AEW Capital Management’s upcoming 2.2 million-square-foot master-planned industrial development in Lawrenceville, Ga.

The post Prologis Secures 172 KSF Industrial Lease in Metro Atlanta appeared first on Commercial Property Executive.

Avison Young’s Chris Godfrey, Kirk Rich and Monica Speak with the firm’s Atlanta office leasing team represented the landlord. Patrick Braswell of Record Real Estate Partners LLC represented e|spaces.

Atlanta’s Class A properties are steadily seeing more people returning to the office, up 10 percent from 2023, according to Avison Young’s Office Busyness Index.

Return to office is trending, with less than 20 percent of workers choosing fully remote positions, according to an August survey by Lincoln Property.

“Atlanta is booming with growth and opportunity across all types of businesses, which makes this an ideal market for e|spaces,” Jon Pirtle, president & CEO of e|spaces, told Commercial Property Executive.

“The 1600 Parkwood Circle location is perfectly positioned in the Cumberland/Galleria area offering free parking and easy access to Buckhead, Midtown, Marietta and downtown.”

READ ALSO: Are Coworking Networks the Future of Office?

The property’s central location is surrounded by key corporate offices, retail, dining and entertainment options, making it convenient for professionals from all types of industries, Pirtle added. “Parkwood in particular provides a flexible, high-quality workspace that supports the diverse needs of Atlanta’s active business community.”

Coworking’s definition

Coworking means different things to anyone asked, Pirtle said.

“We are not a big, open space with a bunch of cubicles, tables or lounge furniture,” he explained. “Our spaces are designed for productivity, providing a true mix of professional, private offices and suites with great views, a variety of meeting rooms with the latest technology and capabilities, and collaborative workspace for those seeking a flexible option.”

Entrepreneurs, small business and corporate teams often have different needs, but seek a perfect mix, according to Pirtle. “Whether you are an individual needing a private office or a team of 20 to 50 needing a private suite with shared space, we have you covered with solutions that prioritize privacy, productivity, professionalism and premium amenities.”

e|spaces has locations in Nashville, Tenn., Chattanooga, Tenn., Knoxville, Tenn., and Orlando, Fla. Members in one market are able to use facilities in the others.

Pirtle said that all e|spaces locations are performing successfully because the company caters to its community. “What’s right for Orlando, for example, may not be right for Nashville or Atlanta—whether it’s the physical location within the market, or balancing office suites versus meeting rooms, or even prioritizing amenities like free parking and onsite fitness centers.”

The post Coworking Firm Enters Atlanta appeared first on Commercial Property Executive.

Jamestown has signed a 49,000-square-foot lease at its Ponce City Market, a mixed-use property in Atlanta. CONA Services—the IT company supporting the Coca-Cola’s North American bottling system—will occupy a portion of the building’s sixth floor.

CBRE represented Jamestown, while Savills worked on behalf of CONA Services.

The tenant will relocate from 10 10th St. NE in Midtown Atlanta, where it currently occupies 32,600 square feet, according to CommercialEdge data. The firm’s new office will house approximately 180 employees, with room for future growth.

Jamestown redeveloped a historic Sears, Roebuck & Co. store and distribution center into the five-building Ponce City Market, bringing it online in 2014. The 3 million-square-foot mixed-use asset includes 821 residential units, about 327,000 square feet of retail and restaurants and 638,000 square feet of Class A office space.

READ ALSO: Growth in Office Tenant Costs Moderates

The newest additions at Ponce City Market were the 700,000-square-foot Scout Living, a hospitality living concept with 400 units, and 619 Ponce, the state’s first locally sourced mass timber office building totaling 110,000 square feet.

Common-area amenities include 8,000 square feet of bookable conference rooms, breakout areas, lounge space, on-site daycare and medical facilities, multiple health and wellness options, as well as The Roof at PCM.

Office tenants within the mixed-use development include Airbus, FanDuel and Capital One. Additionally, global accounting company Sage is set to move at 619 Ponce early next year.

Located at 675 Ponce de Leon Ave. NE in Atlanta’s Old Fourth Ward neighborhood, Ponce City Market is some 3 miles from downtown Atlanta. Hartsfield-Jackson Atlanta International Airport is within 13 miles.

Atlanta’s office vacancy rate on the rise

Atlanta’s office vacancy rate clocked in at 20.5 percent in September, up 180 basis points year-over-year and 1 percent above the national average, according to the latest CommercialEdge office report. However, the metro’s listing rate rose 7.1 percent in the same period, to $33.63.

In June, Newell Brands Inc. decided to move its headquarters at Building and Land Technology’s Concourse Office Park in Sandy Springs, Ga., by mid-2025. The company signed a 180,000-square-foot leasing agreement, expanding its footprint by about 20 percent.

Earlier this year, Piedmont Healthcare Inc. committed to 164,221 square feet at 271 17th St., a more than 540,000-square-foot office building. Lionstone Investments is the owner of the LEED Gold-certified tower.

The post Jamestown Inks Lease at 3 MSF Atlanta Mixed-Use appeared first on Commercial Property Executive.

SHIFT will open its first location in Atlanta on Nov. 19, within the industrial asset at 575 Wharton Drive SW in the South Fulton neighborhood.

The co-warehousing provider aims to meet growing local demand for flexible and collaborative workspaces. SHIFT South Fulton will offer more than 100,000 square feet in total, with various warehousing options for entrepreneurial individuals and businesses of all sizes.

SHIFT South Fulton has 67 rentable warehouse units that range from 300 to 5,000 square feet and can be used for storage or workspaces. It also has 13 office spaces. Membership amenities include access to meeting rooms, loading docks, security services, 24/7 entry, along with mail and package handling.

Pattillo Industrial Real Estate owns the industrial building, according to CommercialEdge data. The property came online in 1978 and underwent a full renovation in 2013. Pattillo acquired it in 2018 for $4.2 million.

SHIFT South Fulton is within 10 miles of downtown Atlanta. Major nearby thoroughfares include U.S. routes 70 and 78, as well as interstates 20 and 285. Hartsfield-Jackson Atlanta International Airport is less than 20 miles southeast.

Co-warehousing grows amid Atlanta’s rising industrial vacancy

Co-warehousing solutions are a growing niche within the industrial sector, as the number of small businesses and users with short-term needs is rapidly growing. Large industrial providers and investors are opening their own co-warehousing brands as well to meet this demand—such as Capstone Equities’ Portal Warehousing or The Rosenblum Cos.’ Launchbox Flexible Warehouse Suites, which opened its first location earlier this year in Latham, N.Y.

Atlanta’s industrial tenants have begun searching for smaller spaces, mirroring a trend that is ongoing throughout the entire Southeast, a recent industrial report from Avison Young shows. More than 9.4 million square feet of industrial space was leased in the third quarter, 54 percent of which involved deals smaller than 50,000 square feet.

The market’s vacancy grew to 9 percent in the third quarter this year, but a cooldown in development is projected to improve this rate in the coming months, the same source reveals. New construction starts were down more than 80 percent since 2021, which was the peak of activity in recent years.

The post SHIFT Sets Up Shop in Atlanta appeared first on Commercial Property Executive.

MWD Logistics occupies the entire Personal Place property, while Currey & Co. fully leased the Best Friend Road location. Both companies are well-established in metro Atlanta and their respective sectors, according to JLL.

Both properties came online in the 1970s. The 90,000-square-foot Personal Place facility in Morrow, Ga., features a rear-load configuration, 22-foot clear heights and a 100-foot truck court. The larger Best Friend Road asset, at about 163,500 square feet in Doraville, Ga., sports a cross-dock load configuration, 30-foot clear heights, a 120-foot truck court with a 50-foot concrete apron and six rail doors.

READ ALSO: Will CRE Market Conditions Improve?

JLL Director Jim Freeman, together with Senior Managing Directors Matt Wirth, Dennis Mitchell and Britton Burdette, represented the seller.

“It’s a good time to sell these assets, and it’s a good time to buy these assets,” Wirth told Commercial Property Executive. “Demand for infill industrial properties remains very strong due to the high barriers to entry for new development to accommodate tenants of this size.”

That dynamic creates a larger buyer pool and a liquid market, Wirth added. The scenario is also favorable for the buyer, as it is able to anticipate a high likelihood of pushing rent at future rollover, while their downside risk is pretty well protected.

Faropoint’s portfolio growth

Faropoint has been adding to its portfolio with gusto recently, generally through off-market deals focused on acquiring infill assets in high-growth markets. In June, the company closed its Industrial Value Fund III with $915 million in commitments, well exceeding the $750 million target.

In fact, Faropoint is no stranger to Greater Atlanta. In May, the investor acquired 4600-4680 Lewis Road, a 220,380-square-foot, three-building campus in Stone Mountain, Ga. The company now has nearly 2.3 million square feet of industrial space in the market, according to CommercialEdge data.

Atlanta industrial market one of nation’s strongest

Industrial properties are very much in demand in Greater Atlanta, with net absorption for the first three quarters of 2024 totaling a positive 6.9 million square feet, according to a Colliers report. Scheduled move-ins will mean additional occupancy gains heading into 2025.

At the same time, industrial development, which has been heated in Atlanta in recent years, is finally slowing down, approaching the five-year pre-pandemic average of 19.7 million square feet, the same report shows. 

The under-construction square footage, totaling 19.3 million, has dropped below 20 million square feet for the first time since 2018. Meanwhile, completions for 2024 thus far amounted to 19.4 million square feet, down 17.8 percent year-over-year.

Industrial rental rates in the Atlanta market increased 5.8 percent over the year at the end of the third quarter. And they are expected to continue to grow as supply-side pressure eases and steady demand persists across the metro.

The post Faropoint Expands Atlanta Industrial Footprint appeared first on Commercial Property Executive.

Foxfield and AEW Capital Management have signed a full-building, 200,000-square-foot lease at Sugarloaf Logistics Hub, a 2.2 million-square-foot master-planned industrial development in Lawrenceville, Ga., within metro Atlanta.

Souto Foods, a subsidiary of Alex Lee, committed to the space, which also includes a cold storage element. The food distributor plans to invest $28 million in the site and expects to create 70 new jobs.

JLL and OnPace Partners worked on behalf of the landlords, while NAI Brannen Goddard represented the tenant.

Developers broke ground on the first phase earlier this year. It is planned to total 1.1 million square feet of industrial space across three buildings. The owner is pursuing LEED certification through the usage of recycled concrete, energy-efficient frameworks and environmentally conscious practices.

READ ALSO: Why 2024 Is the Year to Invest in Industrial Real Estate

The three buildings will have a total of eight drive-in doors, 189 dock-high doors, as well as 569 and 225 car- and trailer-parking spaces. Clear heights will range between 36 and 40 feet, while the truck courts will measure 185 feet for each facility.

Located at 5030 Sugarloaf Parkway, Souto Foods’ upcoming building is roughly 27 miles northeast of downtown Atlanta, as well as about 4 miles from U.S. Route 29 and Interstate 85. The Gwinnett County Airport is some 6 miles east.

JLL Executive Managing Director Reed Davis alongside Stephen Bridges, partner at OnPace, led the broker team on behalf of the landlords. NAI Brannen Goddard Managing Director Bill Kee spearheaded the negotiations on behalf of the tenant.

Office-to-industrial redevelopment

Foxfield and AEW purchased the six-building, 740,000-square-foot office campus in 2022 with plans to reshape the site into a seven-building, 2.2 million-square-foot industrial park, set to include warehouse, industrial and logistics space. Prior to the sale, Cisco owned and occupied the campus.

Additionally, the 290-acre, master-planned development would include some 800 residential units and five retail pad sites. Concurrent with the lease, the developer duo also sold a 13-acre, multifamily-zoned parcel to Westplan Investors.

Atlanta industrial leasing improved in the second quarter

Industrial demand picked up steam in metro Atlanta during the second quarter. Leasing activity increased 11.6 percent compared to the first three months of the year, according to a report by Cushman & Wakefield.

Leasing activity totaled nearly 6.4 million square feet from April to June, the same source shows. Although most transactions encompassed small deals, the number of signed leases north of 300,000 square feet outshined the one registered during any of the past five quarters.

Metro Atlanta’s second quarter absorption clocked in at 3.4 million square feet—only six of the 83 markets tracked by Cushman & Wakefield broke the 3.0 million square feet mark. The delivery of Target’s build-to-suit, 1.4 million-square-foot facility aided the metro’s absorption figure.

The post Foxfield, AEW Land 200 KSF Industrial Tenant in Metro Atlanta appeared first on Commercial Property Executive.

The acquisition brought the West Palm Beach-based private equity firm’s portfolio to more than 13 million square feet across 75 properties.

The deal is the second of 2024 for this buyer and seller. In a $42 million deal that closed in January, Sterling acquired SITE’s Marketplace at Highland Village, a 205,926-square-foot retail center located in the Dallas suburb of Highland Village, Texas.

Sterling’s current purchase drew on funds from Sterling Value Add Partners IV LP, an investment vehicle that includes $600 million of equity. SVAP IV, which closed in June, was oversubscribed by $100 million. Investors range from family offices and endowments to pension plans.  

Sterling’s scoop-ups

The largest property in Sterling’s newly acquired portfolio is Village at Stone Oak, a 476,371-square-foot power center in San Antonio. The property is anchored by a mix of clothing and pet accessory retailers, including HomeGoods, Ross, Petco, DSW and ULTA Beauty. An adjacent Super Target is a shadow anchor. Fronting U.S. Route 281, the property is 16 miles north of downtown San Antonio and within a 5-mile radius of 170,000 residents.

READ ALSO: FTI Experts’ Hub: To Buy or to Lease? That Is the Question

The second-largest property is Presidential Commons, a 264,271-square-foot grocery-anchored center in Snellville, Ga., an eastern suburb of Atlanta. According to CommercialEdge information, SITE purchased it in 2007. Anchored by Kroger and located at 1630 Scenic Highway North, the property also has Burlington, Five Below and Aaron’s on its roster. A population of approximately 193,000 is within 5 miles of its location.

Fairfax Towne Center is the smallest of the bunch, a 253,392-square-foot property located roughly 18 miles outside of Washington D.C., in Fairfax, Va. CommercialEdge data shows that SITE bought the asset for $60.2 million in 2021. Safeway is the grocery anchor, and the retail center also features a T.J. Maxx and a Regal Cinemas.

SITE’s sales binge

The $180.5 million portfolio deal with Sterling is the latest in SITE’s dispositions of open-air retail properties. Since the beginning of the third quarter, the REIT has sold 13 properties for a combined $714.3 million, according to Yahoo Finance.

Just this week, SITE sold Cypress Trace, a 280,000-square-foot grocery-anchored asset in Fort Myers, Fla., for more than $40 million. And in August, the REIT made another seven-figure-square-foot disposition, when it sold a three-property portfolio to CTO Realty Growth for $137.5 million.

The post Sterling Organization Buys 1 MSF Retail Portfolio appeared first on Commercial Property Executive.

T-Mobile has renewed its commitment to roughly 100,000 square feet of office space at CP Group and Farallon Capital Management’s One Ravinia, a 386,603-square-foot property and part of a larger, two-building, 800,000-square-foot office campus in Atlanta.

CBRE and Cushman & Wakefield represented the landlord and tenant, respectively. The mobile telecommunication company has been a tenant at One Ravinia since 2007, anchoring the 17-story office tower.

In 2021, a joint venture between CP Group and Farallon paid $219.5 million for a portfolio that included One and Two Ravinia, as well as One Overton Park, a 387,267-square-foot office asset in Atlanta, CommercialEdge data shows. Franklin Street Properties was the seller, while Blackstone Group funded the acquisition with a $205.4 million note set to mature in 2026.

Forging prime office space

Following the acquisition, the new ownership began upgrading Ravinia. Capital improvements were implemented to the lobbies, cafe and conference center. The landlords also added a new tenant lounge and 85,000 square feet of built-to-suit space. Work for the latter is ongoing and completion is expected in October.

READ ALSO: Atlanta’s Office Market Sees Improvement

Against the backdrop of the refurbishments, the towering duo achieved WELL Health-Safety Rating in 2023. Additionally, Two Ravinia got LEED Gold certified the same year, while One Ravinia is currently pursuing LEED certification.

Floorplates range between 13,000 and 24,285 square feet at Ravinia One. The 42-acre campus comprises a 500-key hotel and amenities such as a gym, EV charging stations, a cafe, outdoor workspaces, as well as shuttle services to a nearby shopping center and train station, among others.

Located at 1 Ravinia Drive, the tower rose in suburban Atlanta, in DeKalb County. Downtown Atlanta is roughly 15 miles southwest while Interstate 285 is less than 1 mile away. Multiple parks and quick-service restaurants can be found within walking distance.

CBRE Executive Vice President Eric Ross led the negotiations on behalf of CP Group. Cushman & Wakefield Executive Managing Director Kirk Diamond, together with Executive Director April Parrish and Managing Director Erin Smith, as well as Senior Transaction Manager Steven Taylor, represented T-Mobile.

Atlanta’s office market is healing

Greater Atlanta’s office market appears to be on the mend. The City in a Forest recorded 5.4 million square feet of office space leased during the first six months of the year, according to a report by Avison Young. The number of closed deals increased by 1.7 percent year-over-year.

Although office vacancy clocked in at 32 percent in June, metro Atlanta’s availability dropped by 0.6 percent quarter-over-quarter, the report goes on to show. This tightening in vacancy marked the first decrease since early 2021.

What’s more, the average lease-up time for office listings in the metro shrunk to 21.2 months in June—a 7 percent decrease year-over-year in the time spent on the market—with spec suites leasing 9 percent faster quarter-over-quarter, the report reveals. Avison Young estimates the desirability of build-to-suit space to arrive from move-in readiness during a period characterized by rising construction costs affecting buildout.

Other notable Atlanta office leases to close recently include Piedmont Healthcare Inc.’s commitment to 164,221 square feet at Lionstone Investments’ 540,000-square-foot property. Additionally, Newall Brands Inc. committed to 180,000 square feet at Concourse Office Park, a 697,400-square-foot office tower in Sandy Springs, Ga., owned by Building and Land Technology.

The post T-Mobile Re-Ups for 100 KSF in Atlanta appeared first on Commercial Property Executive.

Fundamentals across Atlanta’s office market showed some signs of improvement throughout the first seven months of this year, but remained far behind historic averages, the latest CommercialEdge data reveals. Headwinds facing the office sector are not bound to slow anytime soon and office market players are shifting strategies to adapt.

Atlanta’s growing life science sector, along with some major mixed-use projects, promises to revitalize the office market to some degree. Meanwhile, investment volume grew year-over-year, although some significantly large buildings lost value. A few notable leases brought the market’s vacancy down since last year, while flexible space providers focus on the suburbs.

The market has one of the more limited office pipelines in the Southern region, with incoming projects accounting for less and less of existing inventory. With limited candidates for office-to-residential conversion, Atlanta’s office sector has limited means to curb value destruction. CommercialEdge’s Conversion Feasibility Index is a tool that helps identify the opportunity for these conversions at the property level, with a number of U.S. markets having large swaths of inventory as strong candidates for the operation.

Rate of development falls behind national average

Atlanta’s office market faced a slowdown in development, with 1.8 million square feet under construction in July, or 0.9 percent of existing stock. The metro fell just 20 basis points below the 1.1 percent national figure. Together with planned and prospective projects, the pipeline was at 2.5 percent of existing stock.

Compared with some of its Sun Belt peers, Georgia’s capital was ahead of Houston (0.7 percent of stock underway), but behind Austin, Texas (4.6 percent).

The largest office development underway in July was Portman Holdings’ Spring Quarter, taking shape in Midtown Atlanta. The mixed-use project will have 525,000 square feet of office, 40,000 square feet of retail, 370 luxury rental units, 600 market-rate units and 11,000 square feet of outdoor amenity space. Portman broke ground on Spring Quarter in 2022 and plans to bring it online next year.

Atlanta developers completed 1.1 million square feet of office space across six projects in the first seven months of the year. This represents a 0.5 percent expansion of existing stock, which was just 10 basis points above the national figure. In terms of completions relative to total inventory, Atlanta was behind Austin (0.9 percent of stock) and on par with Houston.

More developments aimed at Atlanta’s growing life science sector are taking shape in the metro. One of the largest office properties to come online year-to-date through July was Science Square Labs, adjacent to Georgia Tech’s Midtown campus. Trammell Crow Co. partnered with an affiliate of Georgia Institute of Technology for the development of an 18-acre life science district. The 368,258-square-foot office building—along with a 280-unit community—comprised the first phase of this ongoing project.

In April, Jamestown completed 619 Ponce, a mass-timber office building in Southeast Atlanta measuring 115,000 square feet. The four-story asset is part of the second phase of the Ponce City Market adaptive reuse. Jamestown is also developing two multifamily communities within the same project.

Investment volume more than doubles year-over-year

Investors traded $478 million in office assets during the first seven months of the year, which was a 167 percent increase year-over-year. A total of 23 properties changed hands in single-asset sales, encompassing 2.6 million square feet. Adding portfolio deals to the mix, the total was 28 properties and 3.6 million square feet.

Transactions across Atlanta’s office market this year brought the average price per square foot to $146, lagging the $173 national average. Compared to some of its Sun Belt peers, Atlanta was ahead of Houston ($103 per square foot) and Charlotte ($143), but significantly behind Austin ($432).

B Group Capital Management closed on two back-to-back deals in June for a combined $81 million. The company acquired a pair of office properties in separate transactions. Ameris Center at 3500 Piedmont Road NE traded for $38.8 million, while Ameris Center at 3490 Piedmont Road NE changed hands for $42.1 million. It is worth noting that both were exchanged for less than their previous sale values in 2015 ($43.1 million and $46.9 million, respectively).

Another notable transaction was Shorenstein Investment Advisers’ all-cash deal for 14th & Spring. Greenstone Properties and its equity partner Goldman Sachs put the 324,000-square-foot asset up for sale back in February. It has stood empty since its completion in 2022. The property is subject to a 13-year unsubordinated net ground lease held by the Development Authority of Fulton County, set to expire in 2032.

Vacancy improves with some record-breaking deals

Atlanta’s overall vacancy rate fell 30 basis points year-over-year, to 18.4 percent as of July. Although higher than the national figure—which declined 100 basis points to 18.1 percent—the metro experienced healthy demand, considering the overall state of the sector.

Atlanta fared better for office vacancy than some of its Sun Belt peers. It was followed by Austin (22.9 percent) and Houston (23.8 percent).

A few large leasing deals closed across the metro year-to-date through July. In April, Lionstone Investments signed a 164,221-square-foot agreement with Piedmont Healthcare Inc., which at the time was the largest lease of the year. The tenant plans to consolidate three of its offices at Lionstone’s 540,000-square-foot building at 271 17th St. in Northwest Atlanta.

In June, this record was broken when Building and Land Technology secured a 180,000-square-foot lease with Newell Brands Inc. at its Concourse Office Park in Sandy Springs, Ga. The new tenant will relocate and expand its headquarters, planning to open by mid-2025.

Hoping to boost its 2022-acquired asset, Granite Properties hired Stream Realty Partners as exclusive leasing agent for 3630 Peachtree in Atlanta’s Buckhead submarket. The 438,000-square-foot tower’s current roster includes VML, Amwins Insurance Brokerage and Crescent Wealth Advisory, among others.

Suburban coworking thrives

Atlanta had 4.4 million square feet of flexible office space in July, which was a 2.1 percent share of its entire rentable office inventory. This highlighted strong performance for the coworking segment, as this share was above the national figure (1.8 percent), as well as ahead of Austin (1.5 percent), Charlotte (1.6 percent) and Houston (1.7 percent).

Around three quarters of Atlanta’s flexible office space was in suburban areas. According to recent report from CoworkingCafe, suburbs and smaller cities can offer providers an avenue to a higher rate of success. Over the past 12 months, coworking operators expanded their footprint by 9 million square feet in suburban areas across the U.S., the same source shows.

THRIVE | Coworking is an Atlanta-based flexible office provider that operates mostly in suburban areas. It currently has 85,257 square feet across eight locations. The metro’s largest providers were Regus (566,900 square feet), Industrious (332,200 square feet) and WeWork (285,100 square feet).

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SiteOne Landscape Supply has renewed its 55,869-square-foot office lease at Mansell Overlook.

PPF Real Estate owns the 652,000-square-foot, four-building Class A office campus in Atlanta’s suburb of Roswell, Ga., according to CommercialEdge data. The investor paid $142.3 million for the park in 2021—its first U.S. acquisition—funded by Starwood Capital Group’s note of $87.8 million.

Cushman & Wakefield Director Annie Lewis Gomez alongside Executive Director Jon Mayeske spearheaded the leasing negotiations on behalf of the tenant.

The firm is a national wholesale distributor of landscape supplies. The company owns and leases multiple facilities throughout 45 U.S. states and six Canadian provinces, SEC filings reveal. As of December 31, 2023, the company operated 699 branches, with California’s footprint being the largest at 73 locations.

READ ALSO: As Office Pipeline Shrinks, Existing Class A Buildings Should Benefit

Between 2015 and 2018, the company’s headquarters footprint initially grew from 27,000 square feet to 43,000 square feet at the office park, again according to SEC filings. The latest expansion, in 2018, brought the firm’s presence to its currently occupied 55,869 square feet. The lease was due to expire in 2026.

Cushman & Wakefield Director Annie Lewis Gomez said, in prepared remarks, that SiteOne was able to attain immediate savings by not waiting for the lease’s natural expiration and committing to an early renewal.

The campus’ LEED Gold certified buildings came online between 1996 and 2001. Floorplates range from 24,650 to 28,619 square feet. Keeping up with current office space trends, an overhaul in 2019 added amenities such as a gym and outdoor seating areas.

Additional features include a lounge, conference center and EV charging stations. Tenants at the property include Yardi Systems, Kloeckner Metals and Humana, among others.

The campus’ buildings bear the addresses 300 and 500 Colonial Center Parkway, as well as 100 and 200 Mansell Court E. Several transit stops, retail facilities and quick-service restaurants operate within walking distance. Downtown Roswell and Atlanta are roughly 3 and 24 miles away, respectively.

More suburban office leases signed in metro Atlanta

Metro Atlanta’s office leasing activity surged by 43.9 percent quarter-over-quarter and clocked in at 1.8 million square feet, a Cushman & Wakefield report shows. Even so, the vacancy rate reached 25.0 percent in June, marking a 30 basis-point increase.

Some suburban office markets are outperforming the Central Business Districts in terms of leasing, as the aging millennial population explores suburban housing options, according to Marcus & Millichap Senior Vice President Al Pontius.

That was partially reflected in Cushman & Wakefield’s report, as 44 leases were signed in the CBD in metro Atlanta, as opposed to 83 in suburban areas. However, in terms of total square footage, the suburban leases fell behind the urban ones by 10.5 percent.

The post Landscape Supplier Renews 56 KSF Atlanta-Area Office Lease appeared first on Commercial Property Executive.

Edged Energy, a subsidiary of infrastructure giant Endeavour, has opened its first North American data center, near downtown Atlanta. The facility is the first of three data centers planned for the site, which will eventually provide 168 MW of capacity.

Dubbed Edged Atlanta, the campus was designed for AI workloads. It uses waterless cooling, which will save an estimated 664 million gallons of water annually compared with a similar data center using conventional water cooling technology.

The first building of the Atlanta campus, measuring 210,000 square feet, provides 27 MW of capacity. Its modular system supports densities of up to 70 kW per rack with air cooling and 200 kW per rack with plug-and-play liquid cooling integration. The second and third data centers at the site, which are still under construction, will have 100 MW and 41 MW of capacity, respectively.

READ ALSO: More Data Centers, Please!

The campus is on 80 acres at 1800 Thomas St. NW, on part of the former site of a railroad yard that has been unused for many years. Downtown Atlanta is some 5 miles away.

Edged Energy is at work on other data center campuses in the U.S., including facilities in Chicago, Kansas City, Phoenix, Dallas and Columbus, Ohio. The company is also developing or operating data center projects in Europe.

A growing data center market

Atlanta is a growing data center market, with its facilities able to leverage the region’s labor force, power supply and fiber connectivity. More than 1.2 GW of capacity was under construction during the first half of 2024, far outpacing any half-year period on record, according to a CBRE report.

Demand for Atlanta data center capacity has been strong enough in recent years to shrink the market’s vacancy rate. As recently as 2020, vacancies stood at about 15 percent; as of 2024, the rate is roughly half that.

Nationwide, Northern Virginia remains the largest U.S. data center market by far, with 46.5 percent of all the capacity of the eight major markets. Atlanta has grown into one of those markets, and now has 5.5 percent of their total capacity.

The post Edged Wraps Up Atlanta Data Center appeared first on Commercial Property Executive.

Jamestown, which has $11.7 billion in assets under management, did not respond to a query from Commercial Property Executive about the price of the acquisition. 

According to Michael Phillips, president of Jamestown, the merging of the entities will provide complementary expertise: the subsidiary’s experience in suburban projects to Jamestown’s urban experience. He stresses that placemaking is a key goal for the entities.

READ ALSO: Mixed-Use Malls and the 15-Minute Neighborhood

Under the terms of the deal, a Jamestown affiliate will make an investment in the subsidiary’s portfolio, including properties in Georgia but also Kentucky, New York and North Carolina.

In Georgia, the properties are Colony Square in Atlanta, The Forum Peachtree Corners in Peachtree Corners and Avenue East Cobb in Marietta, The other assets are Birkdale Village (Huntersville, N.C.), Ridge Hill (Yonkers, N.Y.) and Newport on the Levee (Newport, Ky.).

Also included in the sale was the subsidiary’s real estate services business, which manages Avalon in Alpharetta, Ga.; Mercato in Naples, Fla.; and Riverton in Sayreville, N.J. Jamestown already has a growing real estate services business, which currently includes 22 projects in 19 cities and 10 countries.

After the deal closes in the fourth quarter of 2024, the Atlanta-based operating platform will be folded under the Jamestown name, as will its more than 200 employees. Its current managing partner, Tim Perry, will join Jamestown as a managing director & co-chief investment officer.

The privately owned NAP, based in Cincinnati, was founded by William J. Williams Sr. in 1954 and his family still controls the company. In its early years, NAP developed Kenwood Plaza, one of the first open-air shopping centers in the Cincinnati area. After a later redevelopment, the property is now known as Kenwood Towne Center.

Atlanta retail seeing flush times

The Atlanta retail market, including the retail component of mixed-use properties, is relatively strong, with its vacancy rate near a record low at 3.6 percent in the first quarter of 2024, according to Colliers, which is also 250 basis points below the 10-year average for that metric.

Population growth and retail spending in metro Atlanta support retail space use, Colliers reports, with the population in the area growing at nearly twice the U.S. average over the past 10 years. 

At the same time, high interest rates and construction costs have put the kibosh on retail construction starts in greater Atlanta, with total square footage under way now at its lowest rate since 2010.

Investors are thus still interested in Atlanta retail, with Colliers ranking the market fourth in the U.S. in retail property investment sales volume in 2023. In a separate deal in June, Big V Property Group and Equity Street Capital purchased Johns Creek Town Center, a 303,300-square-foot community shopping center located in suburban Suwanee, Ga.

The post Jamestown Snaps Up $2B Atlanta Real Estate Business appeared first on Commercial Property Executive.

Harrison Street and Ackerman & Co. have refinanced Perimeter Town Center, a 274,284-square-foot medical office building portfolio in Sandy Springs, Ga. Mesa West Capital provided the three-year, $51.3 million loan, according to Fulton County records. JLL worked on behalf of the borrower.

The funds will be used for capital improvements, partially cover the cost for recent leasing and near-term lease maturities and repay existing debt.

The property was previously subject to a $44.1 million bridge loan held by Capital One, with a maturity date set for 2023, CommercialEdge data shows.

READ ALSO: These Markets Top MOB Investment Activity

The three buildings came online between 1981 and 2008. The medical campus features floorplates ranging between 15,000 and 22,000 square feet, a total of 1,043 car parking spaces and additional 55,000-square-foot retail space.

The tenant roster includes Perimeter Dental, Virtual Imaging, Perimeter Surgery Center and Family Practice at Peachtree, among others.

The capital improvement program will focus on renovating public spaces, building exteriors, landscaping, parking area and wayfinding signage.

Located at 1150 Hammond Drive NE and 6115 Peachtree Dunwoody Road, the properties are adjacent to the Pill Hill medical hub and have access to Interstate 285. Downtown Atlanta is less than 15 miles away. Medical providers in the surrounding area include Northside Hospital Atlanta, Emory St. Joseph’s Hospital, Elysium Primary Care and Forefront Dermatology.

Managing Director Timothy Joyce, Senior Director Anthony Sardo and Managing Director Matt Casey with JLL Capital Markets led the team representing the borrower in the transaction.

The post Harrison Street JV Lands $51M for Atlanta MOB Portfolio appeared first on Commercial Property Executive.

A joint venture between Cousins Properties and Town Lane has paid approximately $83 million for Proscenium, a 526,000-square-foot office building in Midtown, Ga., an Atlanta suburb. Manulife Investment Management was the previous owner, according to CommercialEdge information.

Town Lane owns 80 percent of the venture and Cousins the remaining 20 percent. The latter will also provide property management and leasing services.

Following the acquisition, the new ownership will implement significant capital upgrades to reposition and modernize the building. The mid-rise was 74 percent leased at the time of sale.

Simpson Thacher & Bartlett LLP served as legal counsel to Town Lane and Eversheds Sutherland LLP served as counsel to Cousins. CBRE represented the seller.

READ ALSO: As Office Pipeline Shrinks, Existing Class A Buildings Should Benefit

The 24-story, Class A asset previously traded in December 2003, when Manulife acquired it from Trammell Crow for $118 million—or about $224 per square foot—CommercialEdge also shows. The current deal marks an almost 30 percent value decrease.

A well-located office property

Completed in 2000, Proscenium is LEED Gold certified and has floorplates averaging 25,000 square feet. Amenities comprise a fitness center, conference center, café, sundry shop and dry cleaning service, as well as a 10-level, above-ground parking garage and EV charging stations.

The building’s current tenant roster includes BakerHostetler, Columbia Property Trust, TOWERPOINT and American Management Association, according to CommercialEdge.

The mid-rise is at 1170 Peachtree St. NE, close to several retail destinations and some 3 miles from downtown Atlanta. Hartsfield-Jackson Atlanta International Airport is within 12 miles.

CBRE Vice Chair Will Yowell and Executive Vice Presidents Justin Parsonnet and Jay O’Meara, along with Vice President Ryan Reethof and Senior Financial Analyst Kyle Witt, negotiated on behalf of Manulife, according to The Business Journals.

Atlanta’s office sector faces headwinds

Atlanta’s office investment volume stood at $321 million year-to-date as of June, according to the latest CommercialEdge office report. Assets traded for an average of $140 per square foot, well below the $172 national figure.

In one of the larger deals, B Group Capital Management acquired Ameris Center One and Two, an office campus totaling 531,000 square feet. An Atlanta Property Group affiliate sold the asset for $81 million or about $152 per square foot.

Meanwhile, the market is seeing the highest concentration of maturing office loans in the U.S., with 48.3 percent of loans having matured recently or maturing by the end of 2026.

The post Cousins Properties JV Pays $83M for Atlanta Office Asset appeared first on Commercial Property Executive.

Shorenstein Investment Advisers has acquired 14th & Spring, a 12-story, 324,000-square-foot office tower in Atlanta. The deal reportedly closed with all cash and without any financing.

Greenstone Properties and equity partner Goldman Sachs put the Class A asset up for sale in February. The property is subject to a 13-year unsubordinated net ground lease held by the Development Authority of Fulton County, expiring December 2032, according to information provided by CommercialEdge.

Greenstone broke ground on the project in 2019, financing its construction with an $84.7 million loan from U.S. Bank, the same source shows. HKS served as architect.

The office tower has been empty since its completion, in 2022. It features outdoor balcony spaces, collaboration hubs, an expansive lobby, coffee shop and fitness center.

READ ALSO: When Will Southeast Office Markets Stabilize?

Shorenstein will be undertaking a capital improvement plan involving enhanced common areas and a further expansion of amenities. To bring this project to fruition, the firm has engaged ASD | SKY to reposition the lobby, enhance the exterior, update the building entrance and expand amenity offerings. In addition, Murphy Meyers has been selected to design a full floor of speculative suites in various sizes, to be constructed as soon as possible.

CBRE’s leasing team is led by Jeff Keppen, Nicole Goldsmith and Kyle Kenyon, with new member Maddie Nagley.

The LEED Silver-certified property is at 1150 Spring St. in Midtown Atlanta, accessible to the Downtown Connector, and within walking distance of hotels, multifamily residences, and retail and dining attractions.

Quality, Southern style

Claude Esposito, vice president at Shorenstein, told Commercial Property Executive, “The flight-to-quality trend evident across the country is also prevalent in Atlanta. We believe tenants will be attracted to the modern features of the property and our planned improvements.”

Research from JLL indicates that Midtown office properties built since 2015 have seen more than 3.8 million square feet of net occupancy gains over the past three years, in contrast to their older counterparts, which saw more than 1.6 million square feet of net occupancy losses.

“Return to office has also been gaining momentum,” Esposito said.

According to a recent Cushman & Wakefield office utilization survey for Atlanta, approximately 85 percent of the 150 companies that responded require three or more days in the office.

In May, a joint venture of Shorenstein and Stiles opened 110 East, a 23-story, 370,000-square-foot Class A office building in Charlotte, N.C. The $186 million project received LEED Gold and WiredScore Platinum certifications.

The post Shorenstein Buys Atlanta Office Tower appeared first on Commercial Property Executive.

Citing the need to support increasing demand for scalable data center power and capacity in the Southeast, TA Realty and EdgeConneX are teaming up to develop a 324 MW hyperscale data center near Atlanta. Construction is set to start later this year with the first phase expected to come online by 2026.

Microsoft will be the end user of the future campus, according to Atlanta Business Chronicle and other media sources. The development will eventually measure about 2.1 million square feet and cost roughly $1.8 billion.

In addition to the first 612,000-square-foot building to be delivered in Phase 1, two more facilities of the same size are to be constructed in three phases, with the entire project set for completion by 2029, according to Data Center Frontier.

READ ALSO: Prologis, Blackstone Double Down on Data Centers, but Hurdles Remain

Last month, the Development Authority of Fulton County approved $75 million in incentives over a 10-year period for EdgeConneX, ABC reported. The project is expected to create about 50 full-time jobs and 400 to 600 temporary construction jobs. The 10-year economic impact is estimated to be approximately $2.9 billion with about $200 million in tax revenues over the same period.

The joint venture partners declined to give the address of the site. However, ABC reported an affiliate of EdgeConneX acquired nearly 63 acres of woodlands in Union City, Ga., for $318.5 million from TA Realty.

A lucrative partnership

TA Realty had initially acquired the site, made out of several parcels, in 2023. The Boston-based provider of real estate investment management solutions will now manage power procurement and also secure all necessary utilities, permits and approvals.

In November, TA Realty leased its entire 1.9 million-square-foot, five-building data center campus in Loudoun County, Va., to a global cloud services provider. The build-to-suit deal marked the formation of a new group at TA Realty dedicated to global infrastructure, which was officially unveiled in January.

EdgeConneX, a Herndon, Va.,-based global provider of data center solutions, will design, build and operate the facility. The company, backed by EQT Infrastructure, also has global headquarters in Singapore and Amsterdam and operates more than 80 data centers across North America, Europe, Asia Pacific and South America.

Growing data center demand

The Atlanta-area development supports the growing demand for low latency, high-performance computing driven by advancements in AI, cloud services and other emerging technologies. The need for resilient and scalable digital infrastructure continues to rise as businesses increasingly rely on these technologies.

The Microsoft data center campus is expected to be one of the largest in the South. The land sales price was described as stunning in the ABC report and another sign of the growing importance of Georgia and the Greater Atlanta metro in data center development.

A recent CBRE survey of investors found Atlanta is the third most popular market for data center investment in the U. S. behind North Virginia and Dallas-Fort Worth.

The post TA Realty, EdgeConneX to Build Microsoft Data Center Campus appeared first on Commercial Property Executive.

Albany Road Real Estate Partners has sold 120 Interstate NW, a four-building, 281,677-square-foot light industrial business park in Atlanta. Adler Real Estate Partners acquired the asset for $49.6 million with the help of a $29.7 million loan from Delta Community Credit Union, CommercialEdge data shows.

JLL represented the seller in the deal and also arranged the acquisition financing for the buyer. The campus was 97 percent leased to 35 tenants at the time of sale.

The news comes on the heels of Adler’s purchase of Valley Business Center, a 204,981-square-foot industrial property in Denver. The company paid $37.7 million for that park.

An Atlanta business park

The property previously traded in November 2020 for $38.5 million, according to CommercialEdge data. Completed in 1978, the almost 23-acre park features climate-controlled buildings, 75- to 100-foot truck courts, 32 dock-high loading doors, 22 drive-in doors and about 625 parking spaces.

The industrial campus provides easy access to interstates 75 and 85 and is less than 3 miles from downtown Atlanta. Hartsfield-Jackson Atlanta International Airport is 12 miles southwest.

The JLL Investment Sales and Advisory team comprised Senior Managing Directors Matt Wirth, Dennis Mitchell and Britton Burdette alongside Director Jim Freeman. Senior Managing Director Melissa Rose, Senior Director Bobby Norwood and Director Hunter Goldberg arranged the acquisition financing.

Calm waters for Atlanta’s industrial sector

Atlanta’s industrial sector saw $407 million in sales year-to-date as of May, according to the latest CommercialEdge report. Assets in the metro traded for $112 per square foot on average, below the $142 national figure. Additionally, the market’s development pipeline saw a small uptick in the last year, in line with the commercial real estate trends.

In one of the largest deals of the interval, Global Logistic Properties paid $77.5 million for the first phase of King Mill Distribution Park, a 846,496-square-foot warehouse in McDonough, Ga. The price per square foot equated to $91.55, below the market’s median value.

The post Adler Real Estate Pays $50M for Atlanta Industrial Park appeared first on Commercial Property Executive.

Alterra IOS has acquired three industrial outdoor storage properties totaling 28 acres in the Atlanta metro area. The firm’s portfolio in the region now comprises 23 properties.

The assets include 0 Liberty Industrial Park in McDonough, Ga.; 2620 Campbell Blvd. in Ellenwood, Ga.; and 498 Tuggle Greer Drive in Buford, Ga. Alterra acquired them for a combined $22.4 million, public records show.

According to the company, each property as well situated within an industrial area and with good access to major highways.

The IOS trio, up close

The property at 0 Liberty Industrial Park is currently under construction, with delivery expected in the fourth quarter. On completion, there will be two Class A IOS facilities of 20,000 and 6,000 square feet on 12.5 usable acres, featuring three entrances for convenient entry by multiple users.

Park My Truck USA brokered the deal. In addition, Steven Bridges and Nat Weikert of OnPace Partners will spearhead leasing at the property.

The Class A facility at 2620 Campbell Blvd. has a 24,500-square-foot maintenance shop and office on 10.5 paved acres. This asset is zoned Heavy Industrial and is in the densely populated I-675 corridor. Christian Samartino of Piedmont Properties and Jordan Camp of Oakley Brokerage Partners arranged its acquisition.

The facility at 498 Tuggle Greer Drive is a 5.3-acre site with multi-directional access via interstates 985 and 85. The property is completely paved and includes about 39,000 square feet of warehouse and office space. Mendy Ruder of Lee & Associates represented Alterra in the purchase and will also market the site to prospective tenants.

Niche market, big moves

The IOS market is characterized by steady investor demand, “supported by long-term market dynamics, minimal cap-ex burdens, ease of construction, and stringent zoning requirements,” which create barriers to entry and constrain supply, according to a June report from Matthews Real Estate Investment Services.

The appeal to investors is boosted by annual rental escalators of 3 to 5 percent and near-universal triple-net lease structures, the report revealed.

Against that backdrop, Alterra has engaged in a flurry of acquisitions. In January, the company executed a sale-leaseback with TruGreen, the national lawn care company, involving 17 properties across 14 states and totaling 350,000 square feet of buildings and 44 acres.

Almost simultaneously—and in another sale-leaseback—Alterra worked with ConGlobal Industries, a leading operator of intermodal, finished vehicle and depot service terminals, to acquire four IOS properties totaling nearly 90 acres with more than 50,000 square feet of buildings. The properties are mostly in the Sun Belt.

The post Alterra IOS Buys 3 Metro Atlanta Assets appeared first on Commercial Property Executive.

A recent report from the Marsh McLennan Agency shows that the number of billion-dollar disasters in the U.S. nearly tripled in the past decade, boosted by severe storms and flooding. Meanwhile, bad weather and increased usage are also putting more strain on America’s aging infrastructure.

To stay competitive, effective risk management, contingency planning and insurance strategies should come into play. This means many industrial owners and operators will need to adjust strategies.

Kate Rutherford, senior vice president at Prologis, is on the front lines of developing an effective risk management strategy. Based on her 20 years of experience, Rutherford has no illusions about what lies ahead: “Extreme weather events are totally out of our control. What we can control is our preparation and our response.”

READ ALSO: Rising Insurance Costs and the Power of Risk Management

For Rutherford, preparation starts at the construction and development phase. “We’re in a lot of markets, so we experience all the different disasters such as earthquakes, windstorms and floods. This requires a proactive approach, assessing natural hazards and climate exposures, making sure that properties are built to withstand potential disasters.”

Maintenance, monitoring matter

But preparation isn’t enough. Regular maintenance is also required. Rutherford highlighted how seemingly trivial things such as checking the status of roof drains can prevent damage by making sure water doesn’t accumulate on rooftops during heavy rainstorms. She also mentioned the importance of keeping nearby trees trimmed, which can keep tree branches and other wind-borne debris from damaging buildings.

Rutherford also stressed the importance of active monitoring. In January 2023, a series of tornadoes occurred with no warning in Atlanta. For Prologis, monitoring kept a natural disaster from becoming a human tragedy.

READ ALSO: How to Protect CRE From Wildfires

“We have fire alarm monitoring at all our buildings. A few minutes before the incident, our property manager received a waterflow alarm notice. The fire department was dispatched to evacuate the building, and everyone took shelter. The customer called us shortly thereafter and while there was some damage to the building, there were no fatalities. Those kinds of positive actions reduce negative impact,” she said.

Contingency comms is key

Rutherford also emphasized the importance of a data-driven approach to contingency planning. This starts with communication. To maintain accurate contact information and protocols, Prologis turns to Archipelago, a productivity software platform that pairs data management with interactive analytics.

The data-driven approach allows Prologis to:

• Maintain accurate contact lists.
• Know when storms alerts go out to customers and vendors.
• Determine an appropriate response based on the information available, such as stopping construction or evacuating facilities.
• Keep risk and leadership teams in the loop.
• Connect quickly with disaster recovery partners vendors, across the country and across the globe and track their performance over time.

Vendor relations are critical

Preparation goes beyond facilities themselves. Having the right relationships in place before disaster hits is also critical. Not just to protect employes and customers, but also to maintain business continuity.

Toby Mink, CBRE executive vice president based out of Baltimore, helped lead the response when a container ship collided with the Francis Scott Key Bridge on March 26, 2024. The bridge collapsed, claiming the lives of motorists and construction workers, disrupted a major transportation route and blocked access to the port of Baltimore.

For operators working with CBRE, the harbor blockage could have also become a major business disruption.

Mink mentioned that many of the company’s commercial properties are industrial and warehouse, and are key entry points for regional and national fulfillment networks. When access to the port was shut down, clients had to find different paths because they couldn’t reach the inner harbor.

According to Mink, “it took about 30 days for the port to reopen, but because we had developed relationships with other ports and facilities in the region, our clients were able to redirect their traffic and avoid a major business disruption. If we hadn’t had those relationships in place, a lot of businesses probably wouldn’t have survived.”

Resilience today benefits tomorrow

With increasing industry losses brought by more frequent and severe natural hazards, owners and/or operators are likely to see increased prices and greater limits on the breadth of available insurance coverage. The Marsh McLennan report shows that as many as 68 percent of commercial properties are underinsured by 25 percent or more—and 19 percent are underinsured by 100 percent.

But Jeff Bray, head of global risk management for Prologis, as well as risk manager in residence at Florida State University’s College of Business, makes it clear that resilience and better risk management practices are the smarter option overall.

As Bray put it, “Although most insurance companies do not have a formal method for considering resilience in their underwriting today, the steps we take to prepare for and mitigate potential losses will be a differentiator for insurance buyers in the future.”

As insurers scrutinize risk management strategies when weighing their own risk, the owner/operator who has built resilience and risk management into their plans at the start will be better positioned.

All said and done, having a good risk management strategy is about more than dollars and cents. It also helps create a company culture of caring. In a tight labor market, this can help employers find and retain the talent they need to grow and stay competitive.

Here’s Mink’s example: “We were building a facility in Indianapolis, and we put in a tornado shelter. The landlord challenged us that not a lot of people were doing these, but we had recently seen a warehouse in the area that had been cut in half by a tornado. Hopefully, that room is never used. It could be a storage room for the next 20 years. But if I’m an employee there and I know I’m in an area where tornadoes are present, I think it’s nice to know that somebody has thought ahead about my safety.”

The post Navigating Risk When Disaster Strikes appeared first on Commercial Property Executive.

Manulife Investment Management has launched a joint venture with Foundry Commercial to purchase, develop and lease industrial outdoor storage in across infill industrial markets in the Southeast.

The joint venture plans to operate a portfolio consisting of 10 sites, located in Nashville, Tenn., Atlanta, Jacksonville, Fla., and Dallas Fort-Worth. Manulife has already acquired three of the sites that have completed construction, while the remaining will be developed together with Foundry.

Manulife has $19.2 billion worth of assets under management and more than 84.6 million square feet of commercial real estate on a global scale, while Foundry currently has $2.7 billion in assets under management.

The decision to invest in this niche got a boost from the reduction in capital costs compared to industrial properties in general, which also brings opportunities unavailable to the general marketplace, said Foundry Commercial Principal Rick Coe in a prepared statement.

A sought-after industrial niche

Despite being a small, rather untapped industrial niche, IOS is attracting a significant number of investors looking to branch out and diversify.

In early January, Alterra IOS partnered with ConGlobal Industries to acquire four IOS properties totaling nearly 90 acres. The assets are located in areas with dense IOS clusters, near port and rail infrastructure.

More recently, Triten Real Estate and TPG Angelo Gordon announced plans to acquire more than $1 billion in additional industrial outdoor storage assets over the next five years. The joint venture initially launched their investment platform in 2020 and have since purchased more than $500 million of IOS assets across 16 markets.

The post Manulife, Foundry Launch Industrial Outdoor Storage JV appeared first on Commercial Property Executive.

Building and Land Technology has secured a 180,000-square-foot leasing agreement at Concourse Office Park in Sandy Springs, Ga., as reported by Atlanta Business Journal. Newell Brands Inc. will move its headquarters to the property’s Queen tower by mid-2025. Cushman & Wakefield brokered the transaction on behalf of both parties.

Newell will relocate from 6655 Peachtree Dunwoody Road where it has resided for almost a decade, expanding its footprint at the new location by some 20 percent. The consumer goods company acquired that property from U.S. Bank – REO back in 2015 for $14.5 million, according to CommercialEdge data. Following the relocation, Newell will fully occupy floors seven through 11, along with floors 15 and 17, as well as the first floor at the Building and Land Technology-owned tower.

READ ALSO: Atlanta Office Activity Contracts in Q1

The move is part of a wider company restructuring initiative by Newell, according to the same source, which also includes consolidating the firm’s business units, streamlining its office footprint and reducing its office workforce by 7 percent. The tenant also plans to invest more than $50 million in the new location, public documents show.

Completed in 1991, the Queen tower rises 33 stories and spans some 697,400 square feet. Building and Land Technology acquired it in 2015 from Regent Partners as part of a larger $489 million portfolio transaction, CommercialEdge information reveals. In 2017, the asset became subject to a $259.7 million loan, held by Morgan Stanley Bank, that also encumbered the King tower. Other tenants at the property include Verifacto, System Soft Technologies and Quest Financial.

A large office commitment for Atlanta

The Newell lease brought the building’s occupancy to 92 percent. The deal represents the fifth new lease encompassing more than 100,000 square feet in the second quarter and the largest office lease in the Central Perimeter since 2018, according to Cushman & Wakefield.

Located at 6 Concourse Parkway, the building is off Interstate 285 and roughly 16 miles north of downtown Atlanta. It is also within walking distance of Perimeter Mall, as well as other retail offerings.

Cushman & Wakefield Senior Director Caroline Nolen, Managing Director Andy Sumlin and Director Jillian Bailey represented the landlord in the transaction. The company’s Executive Director April Parrish, Senior Director Joe Garvey and Executive Managing Director Kirk Diamond, along with Managing Director Erin Smith and Senior Transaction Manager Steven Taylor, worked on behalf of the tenant.

Atlanta’s office leasing landscape

As of April, the average listing rate in Atlanta’s office market stood at $31.68, below the national figure of $37.66 but up 3.8 percent year-over-year, according to a recent CommercialEdge report. The vacancy rate in the metro clocked in at 18.4 percent, on par with the 18.3 percent national rate, and 130 basis points lower than the one recorded last April.

Recently, Stream Realty Partners has been tapped to lease 3630 Peachtree, a Class A+ Atlanta office building spanning 438,000 square feet. The owner, Granite Properties, acquired the asset back in 2022 from Heitman, paying $202 million for it.

The post Atlanta Trophy Tower Lands 180 KSF Tenant appeared first on Commercial Property Executive.

Developed in phases between 1973 and 1986, Gwinnett Park is currently 94 percent leased to 36 tenants with an average lease term of 2.6 years. The property, which is adjacent to I-85 in Atlanta’s Northeast submarket, offers dock-high rear load configurations, 18- to 22-foot clear heights, and about a third of the space configured as office.

READ ALSO: Industrial Opportunity Snapshot

Dallas-based ATCAP has been an active investor nationwide in recent years. In 2023, ATCAP acquired the Houston 610 Loop Portfolio, totaling nearly 1.2 million square feet of industrial space, from Illinois-based CenterPoint Properties.

In 2022, the company formed a joint venture with Brookfield to acquire a 3.5 million-square-foot national logistics portfolio comprised of 51 properties.

JLL, which brokered the deal, representing the seller and procured the buyer. JLL also secured five-year, fixed-rate acquisition financing through Empower Investments.

In the Gwinnet Park transaction, JLL Senior Managing Directors Dennis Mitchell, Matt Wirth and Britton Burdette, and Director Jim Freeman, led the effort. JLL’s Debt Advisory team representing the borrower was led by Senior Director Bobby Norwood and Senior Managing Director Brian Carlton.

Atlanta industrial still strong

Over the last five years, the infill portion of the Northeast submarket has maintained a vacancy rate on average 260 basis points lower than the broader Northeast submarket, according to JLL.

Overall, Atlanta’s industrial market kicked off 2024 with over 4 million square feet of absorption during the first quarter, which was equal to about 43.7 percent of total net absorption for all of 2023, JLL reported. Three-quarters of deals inked during the first quarter were for new space rather than renewals, illustrating strong demand in the market.

Industrial construction in the Atlanta market continued to drop in the first quarter of 2024. Since 2021, the market averaged 20 construction starts (representing 7.1 million square feet) per quarter, JLL noted, but in the first quarter of this year, only four projects broke ground, totaling 4.6 million square feet. Thus, JLL forecasts the industrial vacancy rate, currently at 7.3 percent, to edge downward.

The post ATCAP Buys Atlanta Industrial Park appeared first on Commercial Property Executive.

Big V Property Group and Equity Street Capital have purchased Johns Creek Town Center, a 303,297-square-foot community shopping center located in Suwanee, Ga. The previous owner was SITE Centers Corp., according to CommercialEdge information. A sale price was not disclosed.

The deal marks the partners’ second acquisition this year. In February, the firms entered the Indianapolis market with their purchase of Merchants’ Square, a 232,284-square-foot shopping center in the suburb of Carmel.

READ ALSO: Retail’s the ‘Belle of the Ball’ Again

Johns Creek Town Center is also Big V’s fifth acquisition in Georgia, and now its largest asset in the state. The North Carolina-based firm also owns four other community centers in Brunswick, Cornelia, Loganville and Griffin.

For the seller’s part, the deal is the latest in a string of recent retail dispositions across the Southern U.S. In two separate transactions, the firm has sold a retail center near Nashville, Tenn., and a shopping center in the Metroplex for a combined $77 million.

A retail center near Atlanta

Johns Creek Town Center came online in 2000 on a 30.3-acre site, CommercialEdge shows. Tenants at the five-building retail center are a mix of clothing, grocery and department stores, and feature Market by Macy’s, HomeGoods, Sprouts, Ulta Beauty, Michael’s, Sketchers and PetSmart, among others. Prior to the sale, JLL and SITE Centers handled leasing at the property.

Located at 3630 Peachtree Parkway, Johns Creek Town Center is within a 3-mile radius of a population of roughly 75,000. Area retailers include T.J. Maxx, Ross Dress for Less, Publix, Lowe’s and Home Depot. Downtown Atlanta is 25 miles to the southwest.

More retail space needed

Atlanta continues to see high demand for retail space, according to a recent Colliers report. The metro ranked fourth in the nation for retail investment sales in 2023.

Additionally, in the first quarter of this year, the vacancy rate remained near a record low at 3.6 percent, 250 basis points below the 10-year average. However, the total square footage under construction was at its lowest since 2010 and is estimated that Atlanta’s retail market will continue to be supply constrained.

The post Big V Property Group’s Retail Portfolio Gets Bigger appeared first on Commercial Property Executive.

Granite Properties has selected Stream Realty Partners as exclusive leasing agent for 3630 Peachtree, a Class A+ office building totaling 438,000 square feet in Atlanta’s Buckhead submarket.

Stream’s leasing team includes Managing Directors Glenn Kolker and Bryan Heller, together with Vice President Parker Welton. The trophy tower’s current tenant roster comprises VML, Amwins Insurance Brokerage and Crescent Wealth Advisory, among others.

Granite Properties picked up the office high-rise in 2022, when the company paid $202 million to seller Heitman, according to CommercialEdge. The ownership also secured a $135.2 million acquisition loan originated by Global Atlantic Financial Group. 3630 Peachtree received LEED Gold, Energy Star, Fitwel and WELL Health-Safety Rated certifications.

The 34-story high-rise includes eight passenger elevators, 28,800-square-foot floor plates, first-floor retail spaces totaling 13,000 square feet, 127 residential condominiums and 1,166 vehicle parking spots, according to the same source.

3630 Peachtree’s on-site amenities encompass a renovated fitness center, a conference room with board room, multiple private meeting rooms and seating capacity of up to 65 people and an executive boardroom. Other amenities include multiple on-site dining options, such as a Tomo Japanese restaurant, a French-inspired F&B restaurant, a café with breakfast and lunch options, while services include dry cleaning, security, valet offerings and EV charging stations.

The office tower is close to multiple transit options, such as Buckhead and Lenox MARTA Station, as well as to the Historic Brookhaven, while being 4 miles from DeKalb-Peachtree Airport, 8 miles from Midtown Atlanta and within 21 miles of Hartsfield-Jackson Atlanta International Airport.

Office deals in Atlanta

Atlanta’s office vacancy rate clocked in at 18.4 percent in April, 130 basis points below the national average, according to the latest CommercialEdge office report. The average listing rate stood at $31.68 per square foot, lower than the U.S. figure of $37.66 per square foot.

Recent significant office leases signed in the metro include Lionstone Investments’ 164,221-square-foot lease with tenant Piedmonth Healthcare Inc. The company will move to 271 17th St., an office building totaling more than 540,000 square feet in the West Atlanta submarket.

In April, OA Development inked a 101,891-square-foot renewal deal at Peachtree Ridge, a nearly 160,000-square-foot office building in Norcross, Ga. The tenant is Pond, that started its initial commitment at the property in 2005.

The post Stream Realty to Lease 438 KSF Atlanta Tower appeared first on Commercial Property Executive.

Stonemont Financial Group has secured a $42.5 million construction loan for Stonemont Park 75 South, a 903,701-square-foot industrial development in Locust Grove, Ga., near Atlanta. Principal Asset Management provided the financing and JLL brokered the transaction on behalf of the developer.

Stonemont acquired the 113-acre site in January 2023. Upon completion, the industrial park will include three rear-load buildings ranging from 124,800 to 538,720 square feet. The structures are slated to feature clear heights between 32 and 40 feet, 143 dock-high doors, 130-foot truck courts, 280 trailer parking stalls and 645 car parking spaces.

READ ALSO: Boost in US Manufacturing Spurs Construction Boom

Located at 75 Pine Grove Road, the site is off Highway 42 and has access to Interstate 75. The upcoming property will be roughly 35 miles south of Atlanta, as well as some 33 miles from Hartsfield Jackson Atlanta International Airport.

JLL’s Capital Markets Debt Advisory team included Senior Managing Director Gregg Shapiro and Senior Director Dan Kearns, alongside Vice President Kelsey Bawcombe and Associate Hunter Rich.

Atlanta’s industrial construction pipeline

At the end of the first quarter, Atlanta had 26 industrial projects in the pipeline, amounting to 12.3 million square feet and accounting for 2.2 percent of total stock, according to CommercialEdge data. Development in the metro was on an upward trajectory, marking a four-time increase year-over-year. However, Atlanta saw a decline in deliveries, with just seven industrial facilities completed in the first three months of 2024, totaling 1.8 million square feet.

An industrial project nearing completion near Atlanta is Alliance Industrial Co.’s 117,306-square-foot Factory Shoals Distribution Center. Cushman & Wakefield has been tapped as exclusive leasing broker for the development, which is scheduled for delivery in 2024’s third quarter.

The post Stonemont Lands $43M for Atlanta-Area Industrial Project appeared first on Commercial Property Executive.

Atlanta stands as a dynamic hub for industrial development, its location and robust infrastructure making it an attractive destination for businesses seeking to capitalize on its logistical advantages.

Atlanta’s industrial pipeline in the first quarter of this year was more than four times larger year-over-year, according to CommercialEdge information, reaching about 12.3 million square feet.

The metro is also home to several Fortune 500 companies, which drive demand for extensive logistics support, including warehousing, distribution centers and transportation networks.

However, the metro faces some challenges, too. In March, EV manufacturer Rivian postponed the groundbreaking of its 16 million-square-foot plant in Stanton Springs, Ga. Production at the $5 billion project was initially supposed to start in 2026, with full completion anticipated in 2030.

More industrial space underway in the metro

At the end of the first quarter, Atlanta’s industrial pipeline stood at roughly 12.3 million square feet across 26 projects—or 2.2 percent of existing stock—up fourfold year-over-year. However, only five properties totaling less than 2 million square feet broke ground during the first three months of the year—accounting for 0.3 percent of stock. This was on par with 2023’s first quarter.

Among peer markets, Atlanta’s industrial pipeline lagged Phoenix (10.3 percent of existing stock) and Dallas (2.5 percent), but surpassed Chicago (1.0 percent), the Inland Empire (1.2 percent) and Indianapolis (1.1 percent).

In November, Andersen Corp. broke ground on a 638,000-square-foot manufacturing and distribution facility in Locust Grove, Ga. The $420 million project is part of the Renewal by Andersen division and is scheduled to come online later this year, with operations starting in 2025.

During the same month, Dermody Properties announced plans for LogistiCenter at Bright Star, a 181,000-square-foot industrial campus in Douglasville, Ga. Construction on the two buildings started earlier this year and delivery is anticipated by the second quarter of 2025. Additionally, the facilities are being built to meet LEED standards.

Completions are scaling down in Atlanta

In the first three months of the year, Atlanta saw a decline in industrial deliveries, with only 1.8 million square feet of space coming online, compared to 2.4 million square feet during last year’s same period. Only seven facilities were delivered, five less than in 2023’s first quarter.

Metro Atlanta had the fewest square feet to come online among comparable markets, with the Inland Empire (12.2 million square feet), Dallas (9.1 million square feet) and Phoenix (5.3 million square feet) taking the lead. In October, a joint venture between AEW Capital Management and Stream Realty Partners completed Union City Logistics Center, a 360,180-square-foot warehouse. Construction on the front-load facility started in September 2022.

Sale prices lower than national averages

Atlanta’s industrial sector registered $205 million in assets changing hands in the first quarter. Nationally, the sales volume during the same period reached $10 billion, the Bay Area taking the lead with almost $1.7 billion.

Facilities in metro Atlanta traded for an average of $113 per square foot as of March, CommercialEdge data shows, considerably lower than the $147 national average. The Inland Empire ($212 psf), New Jersey ($306 psf) and Dallas ($145 psf) are some of the markets that fared better, with Chicago ($97 psf) lagging.

In February, Berkeley Partners sold a 141,481-square-foot, three-building industrial portfolio in Norcross, Ga. Unilev Capital acquired the assets completed in the 1879s for $18.2 million, or $128.6 per square foot.

Last October, multiple institutional investors advised by J.P. Morgan Global Alternatives acquired BlueLinx Atlanta IOS, a 585,637-square-foot distribution facility in Lawrenceville, Ga., for $40 million. Stockbridge Capital Group sold the asset for $68.3 per square foot after owning it for just two years.

Higher vacancy rate, but still under national average

Atlanta’s industrial vacancy rate as of March clocked in at 4.6 percent, 60 basis point lower than the national average, but 170 basis points higher year-over-year. Indianapolis (3.2 percent) and Phoenix (3.7 percent) posted the lowest vacancy rates, while the Inland Empire (6.0 percent) and New Jersey (6.1 percent) were some of the peer markets that fared worse.

Atlanta remained one of the cheapest large industrial markets at the end of the first quarter, with an average rent of $5.67 per square foot, a 7.8 percent increase year-over-year, but still $2.18 less than the national figure. Orange County continued to lead the country at $15.44 per square foot, while Indianapolis ($4.60 psf) was at the other end.

In June last year, NVH Korea signed a 234,000-square-foot lease at Scannell Properties’ Gardner Logistics Park in Locust Grove, Ga. The acoustic and thermal management company will occupy the whole facility.

A month before, Boston Scientific Corp. committed to 206,686 square feet at US Realty Advisors and Bain Capital’s to-be-completed campus in Johns Creek, Ga. The life science manufacturing and supply chain facility is being constructed on the site of a former State Farm campus.

The post Atlanta’s Industrial Pipeline Catches Up to National Trends appeared first on Commercial Property Executive.

In a little bit of good news for the sector, MOBs sold for an average of $288 per square foot in the first quarter, up by $1 from the fourth quarter. While only a small step up, it was the first increase in the past six quarters, the brokerage firm’s U.S. Medical Outpatient Buildings report for the first quarter of 2024 stated.

CBRE also noted 13 of the top 20 markets for investment volume saw year-over-year increases. However, high interest rates and inflation continue to impact MOB investment activity. On a quarter-over-quarter basis, markets were evenly split, with 10 seeing increases and 10 marking decreases.

READ ALSO: Medical Office to Perform Well

That split was even starker in the top 10 markets with only sixth-place Tucson, Ariz., (up 122.4 percent) and 10th place Houston (up 167.7 percent) registering increases. Top market Phoenix saw a 7.9 percent decrease in MOB investment volume followed by second-place Atlanta down 70.8 percent; third-place Washington, D.C., down 91.5 percent; fourth-place Los Angeles down 88 percent; fifth-place Chicago down 44.8 percent; the seventh-place Northern New Jersey market down 39.6 percent; eighth-place Boston down 70.8 percent and ninth-place Seattle down 85.2 percent.

On a regional basis, CBRE reported the Midwest was the top region for first-quarter investment volume with $462 million, followed by the Southwest with $393 million. CBRE tracked a total of 185 transactions in the first quarter. While the Midwest has the highest investment volume by dollar figure, the Southeast had the highest number of transactions at 58, compared to 42 for the Midwest.

The high interest rate environment and ongoing inflation has resulted in increased cap rates for most commercial real estate asset types and MOBs are no exception. The average MOB cap rates have increased for six consecutive quarters, ending the first quarter at 7.0 percent versus 7.4 percent for traditional office buildings, according to CBRE. The average MOB cap rate had steadily declined between 2020 and mid-year 2022 before increasing by 90 basis points between the third quarter of 2022 and the first quarter of this year.

Rent and absorption

MOB asking rent growth has far outpaced traditional office buildings since 2020, primarily due to increased demand for health-care services. MOB rent growth ticked up in the first quarter of this year, remaining at 6.5 percent above its first quarter of 2020 level, compared with 0.8 percent growth for traditional office space, CBRE reported. The average MOB asking rent reached a record $24.70 per square foot in the first quarter of 2024, a 0.5 increase from the fourth quarter of 2023. Markets with the greatest year-over-year rent increases were Louisville, Ky., up 8.6 percent; Cleveland, up 4.4 percent, and Grand Rapids, Mich., up 4.1 percent.

Development of higher quality MOB inventory is expected to keep asking rents on the rise for the near future, CBRE notes. Absorption should increase significantly going forward as new MOB projects are slated to deliver over the next two years. MOB construction completions totaled 1.7 million square feet and brought the trailing-four-quarter total to 10 million square feet. Vacancy is expected to peak in late 2024 and start falling in 2025 as those high-quality deliveries are absorbed. The average vacancy rate rose by 0.3 percent quarter-over-quarter and 0.9 percent year-over-year to 9.7 percent.

Spotlight on deals

Of the 24 deals listed in the CBRE MOB report, several were featured recently by Commercial Property Executive. In January, Remedy Medical Properties purchased a six-building, 145,308-square-foot portfolio of medical office buildings in Northern Kentucky and the outskirts of Cincinnati from Zalla Cos. for approximately $43 million, according to CBRE. CPE stated all the buildings are leased to St. Elizabeth Physicians, a multi-specialty organization with practices in Kentucky, Ohio and Indiana.

Also in January, the University Hospitals Wellness Campus at 8655 Market St. in Mentor, Ohio, has changed hands for approximately $37 million. Lake Health, part of the University Hospitals Health Systems, occupies the entire two-story, 86,000-square-foot facility.

In May, a joint venture of Remedy Medical Partners and Kayne Anderson Real Estate acquired a 37-property medical office portfolio spanning 13 states and more than 700,000 square feet for $252 million from Broadstone Net Lease. The largest property in the portfolio was the 120,000-square-foot Ridgeway Medical Campus near Rochester, N.Y., that is fully leased to Rochester Regional Health. CBRE reported the 145,308-square-foot asset sold for $43 million.

The post These Markets Top MOB Investment Activity appeared first on Commercial Property Executive.

At the end of the first quarter, Atlanta’s under-construction office pipeline was above the national figure, but lagged many peer markets, according to CommercialEdge research. Development activity seems to have stagnated in the metro, as no construction starts were registered in 2024’s first quarter and only one property came online.

At the end of March, the vacancy rate in the metro was lower than the national figure, as Atlanta showed higher office occupancy rates than comparable markets. Some large leases were recorded; however, they were mostly renewals or downsizings.

Atlanta office development stalls

As of March, some 3.5 million square feet of office space were under construction in Atlanta across 20 properties, accounting for 1.7 percent of existing stock. The relative pipeline was slightly above the national rate of 1.5 percent. The metro lagged comparably sized markets, such as Nashville (4.5 percent), Austin (3.9 percent) and Charlotte (2.8 percent), but surpassed Denver (1.2 percent) and Phoenix (0.5 percent).

One of the largest properties underway at the end of the first quarter was Science Square Labs, a 368,258-square-foot life science building, part of the first phase of the larger Science Square mixed-use development. In the meantime, developers Trammell Crow Co. and Georgia Institute of Technology brought the 13-story tower online, at the end of April.

In 2024’s first three months, a single property of 180,240 square feet came online in Atlanta. The volume of deliveries was below Denver’s (317,548 square feet), Charlotte’s (364,000 square feet) and Austin’s (635,250 square feet), but above that of Dallas (126,200 square feet) and Nashville (32,000 square feet).

The property that came online is the second phase of SJC Ventures’ The Interlock, a larger 263,890-square-foot mixed-use development. It encompasses 92,000 square feet of retail space and a 682-bed student housing tower, along the aforementioned 180,240 square feet of office space. Last year, Armada Hoffler paid $215 million for the retail and office components of The Interlock’s first phase, comprising a total of 311,000 square feet.

Atlanta’s office sales volume contracts

Throughout 2024’s first three months, some 656,000 square feet changed hands across six properties for a total investment volume of $82 million. These figures represent a 24.7 percent decrease from the same period last year, when $108.9 million were invested in the Atlanta office market across nearly 1 million square feet.

As of the end of the first quarter, the metro’s average price per square foot clocked in at $125, an 11.5 percent decrease from March 2023. Atlanta’s office prices considerably lagged most of its peers’, including Denver ($140.1), Phoenix ($187.3) and Austin ($506.6), but surpassed Houston ($98.3) and Philadelphia ($92.5).

In terms of financing, one of the largest recent deals in the Atlanta office market was Vision Properties securing a $65 million refinancing for Wildwood Center. Franklin BSP Realty Trust provided the 5-year loan for the 692,707-square-foot building.

Lower vacancy than the U.S. rate

As of the end of March, the vacancy rate in Atlanta clocked in at 17 percent, below the national figure of 18.2 percent. The metro fared better than markets like Dallas (21.7 percent), Austin (22.0 percent) and Denver (22.7 percent), but not as well as Nashville (15.5 percent).

Recently, Lionstone Investments secured a leasing agreement for 164,221 square feet at 271 17th St. The tenant, Piedmont Healthcare Inc., plans to consolidate three of its offices at the 25-story building, as it’s reducing its footprint by more than 50 percent.

Architecture and construction management company Pond also renewed its 101,891-square-foot lease at Peachtree Ridge in Norcross, Ga. The building is currently owned by OA Development, which picked it up in 2017 for $18.2 million. The tenant has been at the property since 2005 and is currently occupying 64 percent of the 160,000-square-foot building.

Coworking performs well in Atlanta

As of the end of March, Atlanta’s coworking sector comprised some 4.4 million square feet of space, accounting for 2.1 percent of total office stock. The share of flexible space was above the national figure of 1.8 percent, also higher than in peer markets such as Charlotte (1.3 percent) and Austin (1.7 percent), but lower than in Raleigh-Durham (2.6 percent) and Nashville (2.9 percent).

The largest flexible office operator in Atlanta was Regus with a portfolio of 597,240 square feet across 27 locations. Other key coworking providers in the market were WeWork—with a sizable 355,117-square-foot footprint across six properties—and Industrious, with 332,145 square feet in 10 locations.

The post Atlanta Office Activity Contracts in Q1 appeared first on Commercial Property Executive.

A decade after developer KDC began construction on Park Center, a transit-oriented master-planned Class A office development in Atlanta’s Dunwoody, Ga., submarket, the firm has received approval to rezone the fourth and last parcel of the 17-acre site with a mix of office, hotel, retail and residential space.

The Dallas-based developer sought the changes earlier this year after evaluating the market and determining the needs of the campus have changed since KDC first broke ground on Park Center in the Perimeter Center area of Dunwoody in 2014. With a softening office market, the decision was made to add high-quality residential and hotel components to Park Center.

READ ALSO: Where Office Work Is Heading Now

On Wednesday night, the Dunwoody City Council approved the adjusted and amended zoning of the 2.56-acre parcel that will allow Dallas-based KDC to pivot from a planned fourth office tower to a 175-key hotel, 300 residential units, 22,000 square feet of retail and 300,000 square feet of office space. The plan for 245 Perimeter Center Parkway includes two towers on a common podium with a 20-story apartment tower and a combined office and hotel tower. Office space will encompass the lower 12 stories of one tower, while six hotel floors will top the office space.

Construction on the new mixed-use project is expected to begin in 2025.

Park Center history

When development began in 2014 at Park Center, the corporate office project was the largest of its kind in metro Atlanta at that time. The current campus, which is home to insurance giant State Farm’s Atlanta hub, contains three office towers. Park Center One, which has 600,000 square feet and is directly connected to the Dunwoody MARTA station, was completed in 2016. The 621,000-square-foot Park Center Two has more than 39,000 square feet of retail space and was delivered in 2020. Park Center Three, which was completed in 2021, has 440,000 square feet of office space. The property also has a 4,223-space parking structure.

In October 2022, KDC acquired Park Center Two and Three, along with the parking structure and the 2.56-acre parcel for Park Center Four in a sale-leaseback deal with State Farm. Those buildings and the Park Center Four parcel are located on 12.2 acres at Hammond Drive and Perimeter Center Parkway, adjacent to the MARTA station.

KDC developments

In addition to State Farm’s Atlanta and Dallas hubs, KDC has developed real estate for companies across the U.S. such as FedEx, J.P. Morgan Chase, Liberty Mutual, Raytheon, Toyota North America and Volkswagen. The real estate development and investment firm has its headquarters in Dallas and is supported by a national team with offices in Dunwoody and Charlotte, N.C.

Last month, a joint venture between KDC and Pacific Elm Properties secured a $290 million construction loan from Goldman Sachs Alternatives to develop Parkside Uptown, a 500,000-square-foot office asset in Dallas. The partners broke ground on the project at 1919 Woodall Rodgers Freeway in 2023 and it is slated for completion in 2027. Bank of America, which preleased 248,000 square feet at the property, will anchor the 30-story tower.

In March, KDC topped out Wells Fargo’s $455 million Project Falcon, a two-building, 850,000-square-foot office campus in the Dallas suburb of Irving, Texas. The campus, which will be Wells Fargo’s first net-positive energy office development, is expected to be completed by late 2025.

The post KDC Pivots From Office Project in Atlanta Suburb appeared first on Commercial Property Executive.

Faropoint has purchased 4600-4680 Lewis Road, a 220,380-square-foot, three-building campus in Stone Mountain, Ga. The company now has more than 2 million square feet of industrial space in the Atlanta market, according to CommercialEdge information.

Brennan Investment Group sold the bulk warehousing and manufacturing asset. JLL worked on behalf of the seller and procured the buyer.

New WinCup Holdings occupies the entire property, with a lease of at least 13 more years. The park serves as its national headquarters.

READ ALSO: Top 5 Metros for Industrial Deliveries

The buildings, which range between 32,400 and 105,355 square feet, came online in two phases in 1966 and 1974. The campus features 92 car parking spaces, 130-foot truck courts and 20- to 21-foot clear heights. Additionally, the 10-acre property has 14 dock-high loading doors and 11 drive-in doors.

The campus is close to the U.S. 78 Highway and less than 4 miles from Interstate 285. Downtown Atlanta is some 14 miles away, while Hartsfield-Jackson Atlanta International Airport is within 31 miles southwest.

JLL Capital Markets Senior Managing Directors Dennis Mitchell, Britton Burdette and Matt Wirth, together with Director Jim Freeman, lead the Investment Sales and Advisory team.

Faropoint’s recent industrial expansion

Faropoint’s U.S. industrial portfolio consists of more than 400 warehouses, encompassing more than 20 million square feet, of which 85 percent in stabilized assets and 15 percent value-add properties.

In October, Faropoint purchased two industrial parks in Bergen County, N.J., totaling 770,064 square feet, for $144.5 million. Camber Real Estate partners sold the assets.

A month earlier, Faropoint acquired a 312,950-square-foot industrial portfolio in Charlotte, for $33.3 million. Beacon Partners sold the three-building-property.

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Jamestown has completed 619 Ponce, a 115,000-square-foot Class A office building in Atlanta’s Old Fourth Ward. The development is part of the second phase of the Ponce City Market adaptive reuse project.

The development of Ponce City Market started in 2011, when Jamestown purchased the former Sears location for $27 million. The 3 million-square-foot community hub opened in 2015.

Additional plans for the project’s second phase include Scout Living and Signal House, both multifamily projects. The latter offers luxury apartments and is currently leasing, while Scout Living is a hospitality-inspired community, expected to open later this year.

READ ALSO: AI Will Probably Boost Office Demand. And CRE at Large.

The four-story 619 Ponce is Atlanta’s first office building to be made entirely of locally sourced mass timber, all lumbered from Jamestown-owned forests located around Columbus, Ga. Construction was done on-site by JE Dunn and StructureCraft, adjacent to Ponce City Market.

Designed by Handel Architects, 619 Ponce includes outdoor space, a rooftop courtyard, with spaces featuring floor-to-ceiling windows with moveable panels. Jamestown is targeting net-zero carbon emissions, alongside LEED and Fitwel certifications. The efforts are part of a larger company-wide goal of achieving net zero operational carbon by 2050.

The Silicon Valley of the South

Last June, British software giant Sage signed a lease for 57,000 square feet at 619 Ponce, relocating its North American headquarters from the Atlanta suburb of Lawrenceville, Ga. The firm plans to complete its move in the fall of this year.

Pottery Barn is also currently leasing 18,000 square feet on the building’s ground floor, where it also offers product design and installation services. According to CommercialEdge information, 619 Ponce has a total of 27,000 square feet of retail space. The same source shows that CBRE handles leasing at the property.

Located adjacent to the Ponce City Market at the corner of Ponce de Leon Avenue and Glen Iris Drive, 619 Ponce faces the Atlanta BeltLine and is roughly 2 miles northeast of Downtown Atlanta.

Like several other cities in the South, Atlanta is experiencing a tech boom. CommercialEdge’s recent report shows that the city had the third largest pipeline in the region, with 3.5 million square feet of office space under construction as of March. The metro’s vacancy rate stood at 17 percent, down 380 basis points year-over-year.

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Trammell Crow Co., in partnership with Georgia Advanced Technology Ventures, an affiliate of the Georgia Institute of Technology, has completed the first phase of Science Square, a life science district in Atlanta. The 18-acre project is adjacent to Georgia Tech’s Midtown campus.

The first phase of the mixed-use development includes Science Square Labs, a 368,258-square-foot life science building, and The Grace, a 280-unit residential community. High Street Residential, a TCC subsidiary, developed the 14-story multifamily component, which was designed by Rule Joy Trammell + Rubio. The Grace marks HSR’s first residential development in Atlanta.

Designed by Perkins & Will, Science Square Labs features lab and clean room space, base-building systems, a 38,000-square-foot solar panel array atop of the parking garage, 22 EV charging stations and a Konvekta energy recovery system.

READ ALSO: Atlanta’s Office Market Adapts to Change

Amenities at the 13-story Class A tower include a conference center, pre-function space, a restaurant, a coffee shop, a fitness center, outdoor lounge and workspace, as well as indoor and outdoor event space. The property also provides bike storage, attached covered parking and 24-hour security.

A life science hub in downtown Atlanta

Previously known as Technology Enterprise Park, the life science district had been in the making for a decade, until the developers finally broke ground in 2022.

A year later, in August 2023, the partnership signed its first tenant. Portal Innovations, a life science venture development engine, committed to 33,136 square feet on the building’s 10th floor.

Science Square is expected to be developed in five phases. Upon completion, the project will feature 1.8 million square feet of lab and office space, 500 residential units and 25,000 square feet of retail space. Brasfield & Gorrie is the general contractor.

Despite a footprint of less than 200 million square feet across U.S. markets, life science space continues to be an in-demand property type for commercial real estate users. Versatility in space design, amenities and a location near educational institutions and other life science hubs are among the major aspects that developers take into account when entering a new market.

The post Trammell Crow JV Completes Phase I of Life Science District appeared first on Commercial Property Executive.

Lionstone Investments has signed a 164,221-square-foot lease at 271 17th St., its Atlanta office building totaling more than 540,000 square feet. This deal marks the largest office lease in the metro so far this year.

The new tenant, Piedmont Healthcare Inc., will consolidate three of its offices at the 25-story building. The move also marks a downsize for the hospital system, which will reduce its administrative footprint by more than 50 percent, according to Bisnow.

Piedmont’s future location is 2 miles from its main campus on Peachtree Road. Cushman & Wakefield represented the landlord, while Savills worked on behalf of the tenant.

A LEED Gold-certified office building

Lionstone acquired the asset in May 2017 for $182 million—almost $336 per square foot—from CBRE Investment Management, CommercialEdge data shows.

The LEED Gold-certified tower came online in 2009 in Midtown’s Atlantic Station. The building features floorplates averaging 21,672 square feet, 17,000 square feet of first-floor retail space, 10 passenger elevators and about 1,050 parking spaces. Amenities include a fitness center, conference center and access to a free MARTA shuttle.

READ ALSO: ULI Special Report: What’s Ahead for CBDs

Tenants at the Class A office property include Finnegan, FordHarrison, Sage and Clyde & Co., according to CommercialEdge information. The building at 271 17th St. NW is less than 4 miles from downtown Atlanta, while Hartsfield-Jackson Atlanta International Airport is some 13 miles southwest. The location is also 2 miles from a 193,000-square-foot office property that was recently refinanced.

Cushman & Wakefield Vice Chair Aileen Almassy and Senior Director John Zintak represented the landlord. Savills Vice Chairs Bo Keatley, David Rubenstein and John Flack, along with Managing Director Michael Broome, brokered the deal on behalf of the tenant.

Atlanta’s office sector holds steady

Atlanta’s office vacancy rate clocked in at 17 percent in March, 120 basis points below the national average, according to the latest CommercialEdge office report. The metro’s listing rate stood at $31.54, lower than the $37.74 U.S. average.

Earlier this month, Westbridge and FCP signed a 45,000-square-foot leasing agreement at their campus in Atlanta’s West Midtown. Construction Papers will open a design center in early 2025 at the new location.

Other notable leasing deals in the market include Pond’s commitment to a 101,891-square-foot renewal at OA Development’s Peachtree Ridge in Norcross, Ga. The company has been a tenant at the location since 2005.

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Cushman & Wakefield has been selected as exclusive leasing broker in charge of Factory Shoals Distribution Center, a 117,306-square-foot industrial development in Austell, Ga. The landlord is Alliance Industrial Co. and the project is scheduled to be delivered in 2024’s third quarter.

The owner acquired the 10.8-acre development site in August 2023, for $1.9 million, according to Cobb County public records. During the same period Hancock Whitney Bank originated a $10.9 million construction loan with a maturity date in 2026, according to the same source. Cushman & Wakefield’s team of Senior Associate Connor Larkin, Executive Director James Phillpott, and Director Helen Cauthen will market the property for lease.

Factory Shoals Distribution Center will be at 7605 Factory Shoals S.W. and will consist of a rear-load industrial facility that will include 32-foot clear heights, ESFR sprinkler systems, two drive-in doors, 30 dock-high doors and a build-to-suit office component. Additional features include 103 vehicle parking spots, 44 trailer parking spots and a 2.6-acre industrial outdoor storage lot next to the facility, with an extra trailer parking space.

The industrial project will provide easy access to Interstate 20 and will be 6 miles from Fulton County Airport, 13 miles from Atlanta, 15 miles from Marietta, Ga., and within 20 miles of Hartsfield-Jackson Atlanta International Airport.

Atlanta’s pipeline so far

As of February, Atlanta had 5.7 million square feet of industrial space under construction, a recent CommercialEdge report shows. Across Southeastern metros, Atlanta was outpaced by Charlotte’s 13 million-square-foot pipeline, while Nashville’s figure stood at 3.2 million square feet.

Recently, electric vehicle manufacturer Rivian put on hold the construction of its $5 billion plant in Stanton Springs, Ga., in a neffort to cut costs. The 16 million-square-foot manufacturing plant was planned to take shape on an 1,800-acre site 40 miles from Atlanta.

The post Cushman & Wakefield to Lease 117 KSF Facility Near Atlanta appeared first on Commercial Property Executive.

OA Development has signed a 101,891-square-foot lease renewal at Peachtree Ridge, an approximately 160,000-square-foot office property in Norcross, Ga. The tenant is architecture, engineering and construction management company Pond, that has been a tenant at the location since 2005 and is now occupying 64 percent of the building.

Transwestern negotiated on behalf of the owner and it is also overseeing leasing services at the mid-rise. Other tenants at the property include Franzen and Salzano, P.C. and NovaNet Pro, CommercialEdge shows.

Peachtree Ridge is a seven-story, 159,962-square-foot office building at 3500 Parkway Lane that includes 24,000-square-foot floor plates, a conference room, a fitness center, a terrace level and 480 parking spots.

OA Development picked up the asset in 2017 for $18.2 million from seller FCA Partners, according to CommercialEdge. During the same period, the company also secured a $14.4 million loan originated by Ameris Bank, with a maturity date set for July 2025, according to the same source.

The owner completed a series of renovations at the property that resulted in an upgraded lobby, new lighting, refreshed finishes and contemporary artworks. Renovations were led by Merit Construction Co., while Vickers Design Group was in charge of redesigning the lobby. Renovations on the fitness center and conference room are expected to begin this year.

The 12.6-acre office building is situated within the center of Peachtree Corners, 11 miles from Alpharetta, Ga., 20 miles from downtown Atlanta, 23 miles from Marietta, Ga., and within 32 miles of Hartsfield-Jackson Atlanta International Airport.

Transwestern’s team of Senior Managing Directors Chip Roach negotiated on behalf of the ownership and is the leasing broker marketing the property.

Signs of improvement

Atlanta’s office vacancy rate showed signs of improvement through 2023, reaching 17.4 percent as of November—marking a significant drop from the 20 percent recorded at the beginning of last year, recent CommercialEdge data shows. In the first two months of 2024, Atlanta’s office vacancy rate continued to be below the national figure, with the February office vacancy rate set at 17.1 percent, while the national rate settled at 17.9 percent, according to a recent CommercialEdge report.

Earlier this month, Westbridge and FCP signed a 45,000-square-foot lease with Construction Resources at Westside Paper, a recently repurposed property totaling 226,889 square feet in Atlanta’s West Midtown. The partnership completed the redevelopment of the former paper manufacturing campus in 2022.

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Westbridge and FCP, the developers of a repurposed paper manufacturing campus in Atlanta’s West Midtown, have signed a lease with Construction Resources, which will open a design center there in early 2025.

Called Westside Paper, the recently redeveloped property totals 226,889 square feet, according to CommercialEdge data. The new tenant, which caters to residential builders and contractors, has agreed to occupy 45,000 square feet, the Atlanta Business Chronicle reported.

Local boutique real estate developer Westbridge and FCP, a privately held real estate investment company based in Chevy Chase, Md., partnered to redevelop the 70-year-old former paper manufacturing plant at 950 W. Marietta St. In addition to the adaptive reuse, the 15-acre site includes 65,000 square feet of new construction.

READ ALSO: Has the Return-to-Office Trend Peaked?

Completed in late 2022, Westside Paper is along the Atlanta BeltLine Northwest Spur, under construction as part of the multi-use trail and light rail transit system being built largely on former railroad rights-of-way around central Atlanta.

In addition to Construction Resources, the partners have recently announced a long-term lease by Proof of the Pudding, Atlanta’s largest caterer, for an event venue at Westside Paper.

Brad Pope of JLL represented Construction Resources, and Shelbi Bodner of Bridger Properties represented the owners.

Commercial Property Executive was unable to reach Westbridge for additional information.

Construction Resources was founded in 1970 in Decatur, Ga., as Atlanta Marble Manufacturing, selling cultured marble. After decades of in-house growth and diversification, along with a merger, the company took its current shape, as a provider of specialty building and design products, as well as installation and aftermarket services.

Atlanta’s troubled office market

Despite a growing economy and employment gains in the region, metro Atlanta’s office market rose to an overall 23.8 percent vacancy in the fourth quarter, according to a January report from Cushman & Wakefield. The CBD and suburban submarkets are about even in this respect.

Net absorption was negative in both the third and fourth quarters, though Cushman & Wakefield notes that fourth-quarter losses were worsened “by six suburban tenants vacating spaces 50,000 square feet or greater.”

There is at least one bright spot in the report, which is that the office construction pipeline seems ready to contract.

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Vision Properties has refinanced Wildwood Center, a 692,707-square-foot office building in Atlanta. Franklin BSP Realty Trust provided the $65 million, 5-year loan, CommercialEdge data shows, in one of the largest recapitalizations in the metro so far this quarter.

Vision had acquired the 11-story asset in August 2013 for $97.5 million, financing the purchase with a $30 million bridge loan from Wells Fargo Bank, according to the same source. That same month, the property became subject to a $73.1 million CMBS loan from Deutsche Bank, also originated by Wells Fargo.

The recently renovated Wildwood Center

The 1987-completed building has floorplates averaging 66,100 square feet, 11,000 square feet of retail space and more than 2,100 parking spaces. Vision is also adding 25,000 square feet of speculative suites on the top floor, which are scheduled for completion later this year. Other amenities include a new, 30,000-square-foot fitness center and bike storage.

In fact, the owner has implemented multiple capex programs over the past decade to revamp the Class A property. Upgrades feature a new tenant lounge, an 8,000-square-foot conference center, a café and collaborative seating in the main atrium and outdoor seating areas.

READ ALSO: Interest Rates Remain the Same. What Will 2024 Bring?

Tenants at the LEED-certified building include FSC Securities Corp., Freddie Mac and Ameriprise Financial, according to CommercialEdge information. The owner recently secured almost 263,000 square feet in new leases and renewals at the property, with JLL Executive Vice Presidents David Horne and Glenn Aspinwall, along with Vice President Alexis Easterling, spearheading the leasing efforts.

Located on 12 acres at 2300 Windy Ridge Parkway SE, in the Northwest submarket, Wildwood Center is 15 miles from downtown Atlanta. Hartsfield-Jackson Atlanta International Airport is 24 miles south, while Galleria 600, an office property where General Electric Co.’s planned spinoff signed a 77,000-square-foot lease, is less than 2 miles away.

Leasing activity continues to rise across Greater Atlanta, according to a recent CommercialEdge report. The metro’s vacancy rate clocked in at 17.1 percent as of February, down 330 basis points over the year and 80 basis points below the national average of 17.9 percent.

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Bixby Land Co. has recapitalized five industrial assets with a $200 million note through its newly established Bixby Industrial Fund 1. The proceeds will also allow for future investments. Accord Group Holdings served as financial advisor to Bixby in creating the fund, with negotiations having started in April last year.

Goldman Sachs Alternatives and Ares Management Real Estate Secondaries are equity investors in the newly established fund.

Two of the warehouses are located in Mira Loma, Calif., an Inland Empire submarket, while one is in Atlanta and two in Phoenix. The five-property portfolio measures more than 836,000 square feet. The facilities are fully leased to 10 tenants and carry a weighted average lease term of 2.4 years.

The Atlanta facility is the largest, encompassing 281,000 square feet. According to CommercialEdge data, Bixby acquired the asset in June 2019 in a portfolio transaction from Stream Realty. The warehouse features 54 dock-high loading doors, two drive-in doors, 185-foot truck courts and a 32-foot maximum clear heights.

Located at 7375 Graham Road, the distribution center is some 12 miles from Hartsfield-Jackson Atlanta International Airport and 20 miles from downtown Atlanta.

Focused on tier one and two markets

Bixby’s portfolio consists of more than 9.5 million square feet of industrial and logistics properties. The firm is focusing on acquiring assets between 50,000 and 350,000 square feet in tier-one and tier-two markets.

Earlier this year, the company sold two last-mile industrial assets in Phoenix. LaSalle Investment Management acquired the 155,144-square-foot Canal Crossing Logistics Center, while Link Logistics purchased the 336,038-square-foot warehouse dubbed Riverside @ 51.

The post Bixby Secures $200M Recap for 836 KSF Portfolio appeared first on Commercial Property Executive.

Toro Development Co. is moving forward with Medley, its mixed-use project to take shape in Johns Creek, Ga.

The firm paid $44 million for the 43-acre development parcel that includes a four-story office building, a demolished office site and parking spaces. Groundbreaking is slated for later this year.

Upon completion, the $350 million campus will feature 200,000 square feet of retail and restaurant space, alongside 110,000 square feet of office space and public greenspace. The property will also include 150 townhomes and 750 luxury apartments.  

A mixed-use campus in metro Atlanta

Announced in 2022, the project received the Johns Creek City Council’s approval early last year. Its first phase is anticipated to open in the third quarter of 2025.

Medley will rise at the intersection of Johns Creek Parkway and McGinnis Ferry Road, on the site of the former State Farm Insurance office park, and part of the city’s 192-acre Town Center. It was designed to be Johns Creek’s “third place”, an area for the community to gather outside of homes and offices. Downtown Atlanta is some 30 miles south.

The company plans to keep and renovate the existing office building that was previously owned by U.S. Realty Advisors, according to CommercialEdge data. Completed in 1999, it totals 135,367 square feet.

In addition, TDC will strip the building’s ground floor and convert it into retail and restaurant space. The development’s retail tenants are set to include Ford Fry’s Little Rey, CRÚ Food & Wine Bar, Fadó Irish Pub, Summit Coffee, Lily Sushi Bar, Knuckies Hoagies, Cookie Fix, Sugarcoat Beauty, BODY20 and AYA Medical Spa.   

READ ALSO: Getting Into the Heads of Retail Tenants

Mark Toro, John Kelley, Richard Munger, Vicky Boyce and Carla Cox are heading up the project’s construction. The development team also includes architecture firm Nelson Worldwide, alongside engineering firm Kimley-Horn and landscape architect Site Solutions.

Franklin Street’s Len Erickson and Kaitlyn Theriot are spearheading the retail leasing, while Stream Realty Partners’ Bryan Heller and Parker Welton are handling office leasing.

Atlanta’s mild office activity

The office market in Atlanta slowed last year with investment volume seeing a significant decline, according to CommercialEdge research. Yet, vacancy rates in the metro improved throughout 2023 and leasing activity picked up. As of November, approximately 3.1 million square feet of office space was under construction—accounting for 1.4 percent of total stock, a smaller figure than the national 1.7 percent.

Recently, Vero Capital and Prime Finance closed on equity recapitalization for a four-property office portfolio with one of the assets located in Alpharetta, Ga. The two-building Parkway at Avalon totals 197,000 square feet and is 26 miles from downtown Atlanta.

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Vero Capital, formerly known as Admiral Capital Group, along with Prime Finance, have closed on the equity recapitalization of a four-property office portfolio located across the Sun Belt.

The partnership gained access to more than $20 million of immediately available capital for leasing costs and capital improvements. Walker & Dunlop arranged a $108 million CMBS loan originated by Goldman Sachs and Argentic.

The ownership acquired the assets two years ago and signed more than 400,000 square feet in leasing agreements at the properties, also implementing various capex programs. Tenants across the portfolio include Samsung, Kimley-Horn and Associates and BAE Systems.

The almost 1 million-square-foot ensemble is located in Alpharetta, Ga., Plano, Texas, Raleigh, N.C., and Falls Church, Va. The portfolio boasts a weighted average lease term of 4.8 remaining years and a weighted average occupancy of 84.9 percent.

The two-building Parkway at Avalon measuring 197,000 square feet is one of the office assets recapitalized. The 15-acre Alpharetta campus came online between 2000 and 2001 and features a pair of six-story structures with 24,600-square-foot average floorplates and more than 800 parking spaces. Vero Capital acquired the asset from Velocis for $53 million, according to CommercialEdge information, with help from a line of credit originated by Column Financial.

Walker & Dunlop New York Capital Markets Managing Director Sean Reimer, Senior Managing Directors Aaron Appel, Keith Kurland, Jonathan Schwartz and Adam Schwartz, along with Senior Analyst Christopher de Raet arranged the deal.

Last year, Vero announced the $29 million overhaul of a 410,000-square-foot, two-building office complex in Scottsdale, Ariz. The company picked up the value-add property in 2021 from Velocis.

The post Vero Capital JV Lands Recap for Sun Belt Office Portfolio appeared first on Commercial Property Executive.

Electric vehicle manufacturer Rivian has put on hold the development of its $5 billion, 16 million-square-foot plant in Stanton Springs, Ga., according to Forbes, in an effort to cut costs. This move will save the company nearly $2.3 billion in capital expenditures, Bloomberg reported.

The project was set to take shape some 40 miles from Atlanta, on an 1,800-acre site located in the Morgan and Walton counties. The development team included Jacobs Inc. as engineer of record and Skidmore, Owings & Merrill the design architect. In late December, Rivian selected Clayco to construct the plant and the formal groundbreaking ceremony was set to early 2024.

READ ALSO: Industrial Momentum Slows Down

The California-based company first announced the project, considered at the time the largest industrial plant to be developed in Georgia, in 2021. The following year, Rivian secured a $1.5 billion package of state and local incentives, the biggest in the state’s history. In November 2023, The Joint Development Authority of Jasper, Morgan, Newton and Walton counties approved the resolutions to finalize the 50-year lease agreement, effectively kickstarting the construction phase.

Initial plans included the production of 400,000 electric vehicles per year and the employment of 7,500 workers. The production phase was expected to start in 2026, with the full buildout ready by 2030. Due to the current halt of development at the Georgia factory, Rivian plans to assemble the new EV models at its existing plant in Illinois.

EV manufacturing, still on the move

Meanwhile, several other similar projects have been advancing in the last few months. In November, Toyota made an $8 billion investment at its North Carolina EV battery manufacturing plant. This consolidated the company’s presence in the region, as the total investment amounted to $14 billion.

And, last month, Ascend Elements raised an additional $163 million in equity investments that will accelerate the development of a Kentucky manufacturing plant, valued at $1 billion. Similarly, Hankook Tire is continuing the 2.2 million-square-foot expansion at its plant in Clarksville, Tenn., tapping Clayco as general contractor for the $1.6 billion project.

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Berkeley Partners has sold a 141,481-square-foot, three-building industrial portfolio for $18.2 million in Norcross, Ga., within Atlanta’s submarket of Northlake Chamblee. JLL worked on behalf of the seller and procured the buyer, Unilev Capital. The portfolio is currently 86 percent occupied by 13 tenants.

Built between 1973 and 1978, the light industrial properties are at 6420-6476 Warren Drive and include 18-foot clear heights, a total 23 dock high doors, dock levelers, bumpers and loading doors, according to CommercialEdge. The tenant roster includes Zipp Auto Sales, Galiche Art Rugs and US-1 Van Lines of Georgia, Inc., among others, the same source shows.

The three buildings are adjacent to each other and allow for easy access to interstates 85 and 285, while also being 6 miles from Chamblee, Ga., 7 miles from DeKalb-Peachtree Airport, 17 miles from Atlanta and within 28 miles of Hartsfield-Jackson Atlanta International Airport.

The deal marks Unilev Capital’s expansion in the Southeast U.S., said the company’s Co-Founder & Principal, Raymond Levy, in prepared remarks. The buyer’s strategy is to continue to invest in multi-tenant, shallow-bay industrial assets, with plans to further expand its footprint in the Atlanta area, added the company’s Chief Financial Officer, Ian Konowitch.

The JLL Capital Markets that brokered the deal consists of Senior Managing Directors Matt Wirth, Dennis Mitchell and Britton Burdette, together with Directors Jim Freeman and Mitchell Townsend.

Atlanta’s ranks among top 10 for sales

Nationally, industrial investments totaled $52.1 billion in 2023, a figure that represented almost half of the volume recorded in 2022, a recent CommercialEdge report shows. Year-to-date through December, industrial deals in Atlanta amounted to $1.32 billion, placing the metro in the top 10 markets for sales volume. Across Southern metros, Dallas led with $3.4 billion, followed by Houston with $2.3 billion.

Significant deals closed in the metro last year include properties that were part of Investcorp’s $216 million acquisition. The company expanded its U.S. industrial footprint with a 1.6 million-square-foot purchase, with assets located in Atlanta, Boston, Central New Jersey, Allentown, Pa. and San Antonio, Texas.

The post Unilev Capital Starts Southeast Expansion With Atlanta Acquisition appeared first on Commercial Property Executive.

The seller purchased the asset back in 2008 for $5.5 million, the same source shows. Completed in 1987, the property features suites ranging from 5,000 to 12,000 square feet, 13 dock-high doors, 21-foot clear heights and approximately 168 parking spaces.

At the time of the sale, a total of nine tenants occupied 94 percent of 2395 Pleasantdale. The roster includes Delta Floors, Digiprint Ink, Duct-Max Supply, The Atlanta Office Furniture Store and Kornfield.

The property is in central Norcross, near Interstate 85, Route 23 and Interstate 285, which provide easy access across the Atlanta metropolitan area. Smith Haverty, partner at APG, said in prepared remarks that the market continues to experience tremendous growth.

APG’s industrial portfolio continues to grow, remaining an active participant within the industrial market. The company has deployed more than $135 million of capital since 2022, while also planning to invest $100 million of committed equity into existing distribution properties across different locations by the end of 2024.

In line with nationwide trends, the high cost of capital has led to Atlanta’s investment volume falling 56 percent year-to-date through November when compared to 2022, according to a recent CommercialEdge report. A few notable sales closed within the metro last year, including properties that were part of the $3.1 billion transaction between Blackstone and Prologis.

The post APG Buys 100 KSF Industrial Building in Atlanta appeared first on Commercial Property Executive.

CP Group began renovations on Bank of America Plaza, the metro’s tallest building. Image courtesy of CommercialEdge

During 2023, Atlanta’s office market has slowed down and continued to adapt to macro-economic conditions. Construction activity has remained afloat, but developers started building smaller, according to the latest CommercialEdge data. The number of new properties that broke ground in the first 11 months of the year equaled last year’s number within the same timeframe, but the total space amounted to less than half of last year’s square footage.

Investment volume in the metro registered a significant drop, with fewer properties changing hands at lower prices. However, leasing activity picked up, with a number of sizeable deals closed, as Atlanta’s vacancy rates continued to improve throughout the year.

Smaller office projects in Atlanta

At the end of November, some 3.1 million square feet of office space were under construction in Atlanta across 20 properties—accounting for 1.4 percent of total stock. The metro’s relative pipeline was smaller than the national figure of 1.7 percent and considerably lagging peer markets such as Austin (4.6 percent), Nashville (4.5 percent) and Charlotte (3.2 percent). It did however surpass Phoenix (0.6 percent), and Houston (1 percent).

Science Square Labs is part of the Science Square mixed-use development in Atlanta. Image courtesy of Trammell Crow

One of the largest developments in the metro is Trammell Crow’s Science Square Labs, a 368,136-square-foot lab and R&D building. The developers recently topped out part of the project, also securing its first tenant, Portal Innovations, which will occupy 33,136 square feet on the 13-story property’s 10th floor.

Construction started on eight properties totaling more than 905,000 square feet and representing 0.4 percent of existing stock, on par with the national rate of 0.5 percent. In the same period last year, the same number of projects broke ground, but with more than double the square footage, at 1,910,802 square feet.

One of the largest projects that started going vertical this year is 1072 W. Peachtree St., a 224,000-square-foot class A office building developed by a joint venture of Rockefeller Group, Taisei USA and Mitsubishi Estate New York. Construction also commenced on CP Group’s $50 million renovation of Bank of America Plaza, a 1.3-million-square-foot high-rise, which is also Atlanta’s tallest tower.

In terms of new deliveries, developers brought to market more than 1.9 million square feet of office space across 12 properties, accounting for 0.8 percent of stock and matching the national percentage. The volume of completions surpassed that of Phoenix (506,890 square feet), San Diego (519,964) and Nashville (748,031), but lagged other Sun Belt markets, such as Austin (2.7 million) and Dallas (3.8 million).

Investment volume drops in Atlanta

Forsyth Physicians Center was 80 percent leased at the time of the sale. Image courtesy of Anchor Health Properties

Year-to-date through November, Atlanta’s office investment volume totaled more than $480 million, with nearly 3.9 million square feet changing hands across 40 properties. The sales volume registered a significant drop, as during the same period last year some 18.9 million square feet traded for almost $3 billion.

The average price per square foot decreased by 23.6 percent year-over-year, clocking in at $157.2—below the national average of $192.8. The metro’s average price significantly lagged markets such as Austin ($316.4) and San Diego ($400.3), but surpassed Charlotte ($144.8) and Houston ($127).

Medical office buildings on the campus of Piedmont Fayette Hospital. Image courtesy of CBRE

The largest sale was Estein USA’s $175 million acquisition of Three Ravina Drive, an 813,748-square-foot building in the northern part of the metro. Another notable transaction was the sale of Forsyth Physicians Center, a 91,940-square-foot outpatient facility, that changed hands for $29.3 million. Anchor Health Properties is the new owner, which picked up the asset with the help of $20.5 million in debt financing from First Citizens Bank.

Remedy Medical Properties also teamed up with Kayne Anderson Capital Advisors to acquire a two-building medical office portfolio totaling 192,363 square feet in the Fayetteville suburb of Atlanta. The seller, Piedmont Healthcare is also the anchor tenant, occupying 63 percent of the space.

Atlanta vacancy rate improves

Atlanta’s office vacancy rate continued to improve through 2023, reaching 17.4 percent as of November and marking a significant drop from the 20 percent recorded in January. The rate was also below the national figure of 18.2 percent. Additionally, the metro fared better than its peers including Houston (25.4 percent), Austin (21.2 percent) and Phoenix (19.2 percent).

The Edison sits on 35 acres in the North Fulton submarket. Image courtesy of Stream Realty Partners

One of the largest leasing deals recorded in the metro this year was Morgan Stanley’s 100,000-square-foot lease extension at The Edison, bringing its total footprint at the campus to 216,000 square feet and fully occupying the property. The two-building complex is owned by Invesco Real Estate.

Another significant leasing deal in the metro was Piedmont Office Realty Trust‘s 13-year, 77,000-square-foot lease with tenant GE Vernova, at Galleria 600. The 432,000-square-foot tower is part of the larger Atlanta Galleria Office Park totaling 2.1 million square feet.

Coworking remains an opportunity

As of November, flexible office space in Atlanta totaled nearly 4.4 million square feet—accounting for 2.1 percent of Atlanta’s office stock. The metro had a larger share of coworking space than markets such as Dallas (1.7 percent), San Diego (1.9 percent), Austin (1.7 percent) and Charlotte (1.3 percent), only trailing Nashville and Raleigh-Durham, both clocking in at 2.7 percent.

Regus had the largest flexible office footprint in Atlanta, with more than 575,000 square feet across 26 properties. Other notable players in the sector include WeWork with 394,500 square feet and Industrious with 332,145 square feet. CP Group is also planning to significantly expand its coworking platform in Atlanta.

The post Atlanta’s Office Market Adapts to Change appeared first on Commercial Property Executive.

A rendering of DC BLOX’s new campus in Conyers, Ga. Image courtesy of DC BLOX

DC BLOX has purchased 72 acres of land for the construction of a two-building, 216-megawatt hyperscale-ready data center campus in the Atlanta suburb of Conyers, Ga.

The 750,000-square-foot project, designed to meet the Uptime Institute’s Tier 3 certification, will be built in two phases, with the first expected to deliver in the fourth quarter of 2025. An unnamed hyperscale client has signed on as the anchor tenant for the initial phase, and an additional 160,000 square feet of space will be available for lease to additional tenants.

According to DC BLOX, the development has been granted incentives from the Development Authority of Rockdale County via the Conyers Rockdale Economic Development Council. The facilities have been designed by Thomas & Hutton and Corgan, while Evans General Contractors will be in charge of the construction process. Bennett & Pless and DLB Associates will oversee structural and mechanical engineering.

The campus’ tech specs

Upon completion, the property will include one 30-megawatt facility and another capable of accommodating 80-megawatts of power. In total, the campus will be able to support a critical load of up to 150-megawatts, with energy supplied by Georgia Power.

READ ALSO: How Will AI Impact Data Center REIT Investment?

When completed, the campus will be connected to new dark fiber ring being built around metro Atlanta. The ring itself will link up with a 500-mile dark fiber route that extends to a cable landing station in Myrtle Beach, S.C. That project, which connects the future site with hubs in downtown Atlanta, Augusta, Ga., as well as Charleston, S.C., broke ground in October of 2022, and is expected to come online later this year.

On the inside, the facilities will include 26,000-square-foot data halls, each equipped with 10-megawatt power blocks. The buildings’ base temperature control solutions will incorporate N+2-redundant air-cooled chillers with magnetic bearings, as well as N+5-redundant vertically set fan coils lining the data halls themselves. Additionally, the spaces will be able to accommodate liquid cooling.

Adding to a data center hub

The project, which lies 24 miles outside of Atlanta, is the firm’s second development in the area, following last month’s groundbreaking of a $1.2 billion, 180-megawatt facility located in Lithia Springs, Ga.

Both projects are taking shape at a time when the Atlanta data center market has experienced considerable upticks in investment, development and leasing, owing in part to energy delivery limitations in Northern Virginia, as well as to the need to accommodate local operations from the likes of Apple, Alphabet and Microsoft. According to an October 2023 market update from Cushman & Wakefield, the city has 670 megawatts of space under construction, with an absorption of 121 megawatts. Presently, the market has 480 megawatts of space in operation, and a vacancy rate of 2.9 percent, one of the lowest in the country.

Within a week of DC BLOX’s groundbreaking on its Lithia Springs facility, DataBank announced the addition of 120 megawatts to the city’s pipeline, acquiring 95 acres of land for the construction of a 1 million-square-foot facility expected to come online in 2026.

The post DC BLOX to Build 750 KSF Data Center Campus in Atlanta Suburb appeared first on Commercial Property Executive.

Groundbreaking ceremony for Andersen Corp.’s manufacturing facility in Locust Grove, Ga. Image courtesy of Andersen Corp.

Door and window manufacturer Andersen Corp. has begun construction on a new $420 million, 638,000-square-foot manufacturing and distribution facility in Locust Grove, Ga., for its Renewal by Andersen division.

Construction is expected to be completed in late 2024, with operations beginning in 2025. Clayco is the project’s general contractor.

Locust Grove is in Henry County and about 35 miles south-southeast of Atlanta along Interstate 75. In a prepared statement, Locust Grove Mayor Robert Price referenced the value of a planned I-75 interchange roughly 3 miles north of Locust Grove.

READ ALSO: Are Suburban Office-to-Industrial Conversions Feasible?

The project is being built at The Cubes at Locust Grove and will be Renewal by Andersen’s first manufacturing facility in Georgia, joining an Andersen Logistics distribution center in Douglasville, Ga.

Rendering of Andersen Corp.’s manufacturing facility in Locust Grove, Ga. Image courtesy of Andersen Corp.

Andersen Corp. is one of North America’s largest window and door manufacturers and along with its subsidiaries operates more than 20 manufacturing and distribution facilities. Renewal by Andersen is Andersen Corp.’s full-service window replacement division, which manufactures, sells and installs replacement windows across North America.

Calming market

In June, NVH Korea signed a lease for a 234,000-square-foot building at Scannell Properties’ Gardner Logistics Park in Locust Grove. The company is headquartered in Ulsan, South Korea, and manufactures a diverse range of automotive components, including battery parts for Hyundai and Kia electric vehicles; parts for controlling automotive noise, vibration and heat; and floor mats, cargo mats and cargo trays.

The metro Atlanta industrial space market is seeing demand moderating from pandemic peaks, with leasing and net absorption both declining substantially year-over-year, according to a third-quarter report from CBRE.

Rendering of Andersen Corp.’s manufacturing facility in Locust Grove, Ga. Image courtesy of Andersen Corp.

Another factor is a record-setting 12.7 million square feet of deliveries in the third quarter, essentially all of it speculative. Not surprisingly, average vacancy rose to 5.8 percent, the highest level in almost three years.

The Southeast I-75 submarket has seen nearly 4.3 million square feet of net absorption year-to-date, on an inventory of 71.5 million square feet, resulting in a 5.0 percent total vacancy. Space under construction totals 5.2 million square feet, CBRE reports.

The post Andersen Starts Construction on $420M Manufacturing Facility appeared first on Commercial Property Executive.

LogistiCenter at Bright Star will total 181,000 square feet across two buildings. Image courtesy of Dermody Properties

Dermody Properties is getting ready to develop LogistiCenter at Bright Star, a 181,000-square-foot industrial campus in Douglasville, Ga., in the Interstate 20 West Atlanta submarket. Construction of the two-building property will start in early 2024 and completion is expected in the second quarter of 2025.

The developer acquired the land in September for $1.8 million, public records show. Hughes Commercial Real Estate Associate Mason Marsteller represented the buyer.

The rear-load facilities will be divisible by up to three tenants and take shape according to LEED standards. Building 1 will encompass 113,400 square feet, while Building 2 will comprise 68,040 square feet.

Both warehouses will feature 70-foot truck courts, 32-foot clear heights, 60-foot speed bays and two drive-in doors. Plans also call for 28 dock-high doors, 10 dock levelers and 90 vehicle parking spots at Building 1, along with 26 dock doors, eight dock levelers and 50 parking spaces at Building 2.

Rising on the north and south side of the Bright Star Connector, the facilities will provide access to Interstate 20. Interstate 285 will be some 17 miles away, while downtown Atlanta and Hartsfield-Jackson Atlanta International Airport will be within a 23-mile radius.

Dermody Properties currently owns five industrial properties in the Southeast market, amounting to more than 1 million square feet. Earlier this year, the firm purchased a 312,000-square-foot logistics facility in Garden City, Ga.

The post Dermody Properties to Develop Atlanta-Area Industrial Campus appeared first on Commercial Property Executive.

DataBank’s ATL5 facility will comprise two multi-story data centers ready for hyperscale deployments. Rendering courtesy of DataBank

DataBank is expanding its presence in Atlanta with a new, 120-megawatt data center. The developer has acquired 95 acres of land in Lithia Springs, Ga., where it will build a 1 million-square-foot facility. The first of the two planned buildings is expected to come online by 2026, DataBank CEO Raul Martynek confirmed for Commercial Property Executive.

Slated to also include a 180-megawatt substation from Georgia Power, this new data center will be the company’s fifth and largest in the Atlanta market. DataBank cited increased demand for AI/ML applications as the reason for this expansion.

READ ALSO: AI Drives Explosive Growth in Data Center Demand

DataBank will construct ATL5 to meet demand for new hyperscale cloud and other enterprise clients. The company will leverage its Universal Data Hall Design, which involves first and foremost accommodating these high-performance computing needs. Key features of this design include a layered building approach that allows for flexibility in terms of infrastructure, capacity for high density deployments, as well as different cooling methods for each data hall, depending on client demands.

“Considering AI/ML workloads require significantly more power and cooling than traditional workloads, many existing data centers may need to be reconfigured. In fact, HPC workloads consume as much as 10 times the power than conventional ones. With more power needs, come greater cooling needs as well. Thus, HPC-ready data centers have a more demanding infrastructure requirement,” Martynek told CPE. “There are not remotely enough data centers with such capabilities currently, so many more will need to be built to meet such demand,” he added.

Plentiful land and power contribute to Atlanta’s booming market

DataBank’s fifth facility in Atlanta will be its largest so far, at roughly 1 million square feet. Rendering courtesy of DataBank

DataBank has been active in the Atlanta market since 2018, when it developed ATL1 in partnership with Georgia Tech. Since then, it has expanded by acquiring two data centers in 2021. The firm also owns another 18 acres of land in Lithia Springs, where it is building the ATL4 facility, which has been fully pre-leased.

DataBank currently operates just under 300,000 square feet of data center space in the market, providing 55.1 megawatts of critical load across its existing facilities.

According to Martynek, Atlanta has plentiful land and a friendly business climate, enabling the growth of the data center sector in the region. Other advantages include the availability of long-haul fiber and good overall connectivity. “Atlanta has some of the lowest utility rates in the country for a major metropolitan area,” Martynek mentioned.

Several other companies have recently made commitments to the Atlanta market. DC BLOX broke ground on a $1.2 billion data center, also in Lithia Springs, while Microsoft acquired 350 acres for a $1 billion campus in Rome, Ga.

As of June, Atlanta had 235.6 megawatts under construction, a recent CBRE report shows. The market’s 7.4 percent vacancy rate indicates a healthy amount of absorption, with most of the new development preleased to hyperscalers. Taking into consideration planned facilities as well, the pipeline amounted to more than 2 gigawatts, according to the same source.

The post DataBank to Develop 120 MW Atlanta Facility appeared first on Commercial Property Executive.

The landlord owns five office buildings within Atlanta Galleria Office Park. Image courtesy of Piedmont Office Realty Trust Inc.

GE Vernova, General Electric Co.’s planned spinoff, has signed a 77,000-square-foot lease at Galleria 600, a 432,000-square-foot Class A office building in Atlanta’s Galleria submarket. The tenant committed to the tower through 2036. Piedmont Office Realty Trust Inc. owns a total of five buildings within the Atlanta Galleria Office Park, including Galleria 600.

GE Vernova will join other tenants at the property such as DHR Global, Crawford Investment Counsel, Futurity First Insurance Group and Warbird Consulting Partners, CommercialEdge data shows.

With this commitment, the office complex reached 800,000 square feet of new leases signed since 2020, including 10 new corporate offices or regional relocations, said Piedmont’s Executive Vice President for The Southeast Region, Alex Valente, in prepared statements. He also noted that GE Vernova’s deal also brought the 2.1 million-square-foot complex to 90 percent occupancy. JLL’s team of Jeff Bellamy, Claire Ross and Adam Viente are the leasing agents for the five office buildings.

READ ALSO: FTI Experts’ Hub: Brace Yourselves for a Full Return to the Office by 2028

Locates at 600 Galleria Parkway, the 19-story office building includes 25,721-square-foot floor plates, eight passenger elevators, 3,000 square feet of retail space, a fitness center and 1,502 vehicle parking spots, according to CommercialEdge data. The owner picked up the property in 2019 in a $218 million deal from State Teachers Retirement System of Ohio, the same source reveals.

Piedmont Office Realty Trust, Inc.’s other properties include the 415,000-square-foot Galleria 100, the 431,614-square-foot Galleria 200, the 432,934-square-foot Galleria 300 and the 432,000-square-foot Galleria 400. Amenities at Atlanta Galleria Office Park include a 10,000-square-foot fitness center, hospitality-inspired lobbies, conference facilities, food and beverage services and outdoor collaboration spaces.

Office leasing in metro Atlanta

The 20-acre campus is close to interstates 75 and 285, while being connected to Truist Park and The Battery through a pedestrian bridge. The property is 10 miles from Marietta, Ga., 12 miles from downtown Atlanta and within 21 miles of Hartsfield-Jackson Atlanta International Airport.

One of the recent high-profile leases in the area was Morgan Stanley’s 100,000-square-foot extension at The Edison, a two-building office campus in Alpharetta, Ga. The company expanded its original 116,000-square-foot lease, now fully occupying the Class A office campus.

In July, JLL became the exclusive leasing agent for The Proscenium, a Class A office tower totaling 521,000 square feet in Atlanta. The 24-story building is owned by Manulife Investment Management.

The post Piedmont Secures Lease at Atlanta Office Campus appeared first on Commercial Property Executive.

DC BLOX’s upcoming facility will utilize waterless cooling and target a power usage effectiveness of 1.3 at full load. Rendering courtesy of DC BLOX

DC BLOX has broken ground on a new data center in Lithia Springs, Ga. The company will invest $1.2 billion in a two-story, 180-megawatt facility dubbed Project River. First customer move-ins are expected in 2025’s third quarter.

Evans General Contractors will construct the facility on a 55-acre parcel. The development team also includes design partners DLB Associates, Corgan, Thomas & Hutton and Bennett & Pless, all of which have worked before with DC BLOX and Evans. The owner also worked with Elevate Douglas Economic Partnership to secure tax abatements for the project.

READ ALSO: Data Center Leasing Picks Up

Set to operate at a power usage effectiveness of 1.3 at full load, the facility will be a waterless design. “By avoiding traditional water usage and employing cutting-edge cooling methods, we are taking steps to enhance the reliability and longevity of our IT equipment while reducing energy consumption spent on cooling, making our data center operations highly sustainable and cost-effective. We have implemented provisions for liquid cooling in the future, as we look to the future of larger cooling demands for AI and HPC,” a DC BLOX spokesperson told Commercial Property Executive.

Ready for high-density AI/ML applications

Project River will encompass 12 data halls totaling 750,000 square feet of gross space across two buildings. Each data hall is planned to measure 26,500 square feet and have 10-megawatt power blocks, amounting to 318,000 square feet of raised floor space and 120 megawatts of critical IT power. The campus is designed to meet demands for hyperscale, AI and ML applications, with densities at roughly 375 watts per square foot.

DC BLOX’s cable landing station in Myrtle Beach, S.C. can host up to five subsea cables, along with colocation space. Photo courtesy of DC BLOX

The company spokesperson told CPE that such applications “place higher demands on data centers due to the significantly higher density of power required to run AI infrastructure. Ensuring that enough power has been reserved and committed for future builds is an important consideration for any company deploying high power dense workloads like AI/ML in a data center.”

Taking shape alongside North River Road, DC BLOX’s new facility will also be directly connected via dark fiber to the Myrtle Beach, S.C., landing station. The company broke ground on the 500-mile route in October last year—the first high-capacity fiber path connecting hubs in Atlanta, Augusta, Ga., and Myrtle Beach. The cable is expected to be fully operational later this year, while the landing station has been already brought online.

Explosive growth of Atlanta’s data center market

Atlanta is a primary data center market that had 235.6 megawatts under construction at the end of June, according to CBRE research. Land banking acquisitions reached over 2,000 acres, which led to a rise in prices, the same source shows.

The DC BLOX spokesperson told CPE that Atlanta emerged as a preferred location for major tech companies and hyperscale users—such as Google, Microsoft, Meta and Amazon—due to the affordability of land and availability of power.

Earlier this year, Georgia Power, the state’s largest utility provider, has successfully brought online a new nuclear facility, which, according to CBRE, has more than 1 gigawatts dedicated for data center use.

Several other big names are currently building data centers in the region. DC BLOX’s Project River is next to Microsoft’s 300-acre, 1 million-square-foot facility—which was announced in August 2021 and is expected to come online this year. DataBank has also acquired 95 acres of land in Lithia Springs, where it will construct a 180-megawatt data center also targeting AI and ML users.

The post DC BLOX Breaks Ground on $1.2B Atlanta Data Center appeared first on Commercial Property Executive.

Completed in 1996, the Georgia facility previously traded just two years ago. Image courtesy of JLL Capital Markets

Stockbridge Capital Group has sold BlueLinx Atlanta IOS, a 585,637-square-foot low-coverage/IOS distribution facility in Lawrenceville, Ga., for $40 million. JLL Capital Markets brokered the transaction, working on behalf of the seller and procuring the buyer, institutional investors advised by J.P. Morgan Global Alternatives.

Stockbridge had purchased the facility in 2021 from Brennan Investment Group for $31.8 million, according to CommercialEdge data. Prudential Financial provided a $19 million acquisition loan at the time, the same source shows.

Completed in 1996, the BlueLinx property is 64.7 acres and encompasses around 55 usable acres and approximately 4.5 additional ones, which can be used for potential future expansion. The single-story building on the site features 28-foot clear heights, insulated ceilings, active CSX rail spur, eight dock-high doors, 42 grade-level drive-in bays, climate control, a fully paved yard, ample storage sheds and approximately 200 parking spaces.

BlueLinx is located at 200 Hosea Road in Gwinnett County, roughly 34 miles from downtown Atlanta. The facility is near Route 29, providing access to Interstate 85.

Senior Managing Directors Dennis Mitchell, Matt Wirth and Britton Burdette, and Directors Mitchell Townsend and Jim Freeman led the JLL Capital Markets Investment Sales and Advisory team which arranged the deal.

Stockbridge also recently paid $87 million for a Class A industrial property in North Las Vegas, Nev., totaling 442,780 square feet. JLL and Cushman & Wakefield brokered the transaction.

The post Stockbridge Sells Atlanta Asset for $40M appeared first on Commercial Property Executive.

Marketplace at Buckhead is anchored by Kroger. Image courtesy of Sterling Organization

Sterling Organization has acquired a 102,864-square-foot grocery-anchored shopping center, formerly known as Cherokee Plaza, in Atlanta.

Sterling acquired the asset at 3871-3895 Peachtree Road NE on behalf of its stabilized grocery-anchored shopping center fund, Sterling United Properties II LP (SUP II). Marketplace at Buckhead is the 14th property in the $267 million equity fund.

The center is anchored by an 81,718-square-foot Kroger grocery store and is also home to Starbucks, Jersey Mike’s Subs and Salon Lofts. The demographics of the surrounding are sound. The population base within a 3-mile radius is about 146,000 residents, with an average household income of more than $175,000.

READ ALSO: Navigating the Retail Financing Landscape

In a prepared statement, Jordan Fried, principal of Sterling Organization, called Marketplace at Buckhead a trophy asset, based on a prime location “with very strong underlying property fundamentals” and being “fully leased to a lineup of tenants offering necessity goods and services….”

Retail resurgence

Despite economic uncertainty, population growth is fueling metro Atlanta’s retail space market, especially for necessity retailers, according to a second-quarter report from Marcus & Millichap.

Consistent net absorption above deliveries has pushed vacancy to a record low of 4.1 percent. Further, construction is lagging, which is helping to drive double-digit rent increases.

Though investment activity has been slowed by the tighter lending market, Marcus & Millichap says, “impressive fundamentals are proving engaging to a number of investors. In recent weeks, many properties are selling at or near the initial asking price, suggesting that buyer/seller expectations are falling increasingly in line.”

This past January, Branch Properties acquired a 14-acre site in Gainesville, Ga., in the Atlanta suburbs, to develop Limestone Marketplace, an approximately 76,800-square-foot project anchored by a 55,000-square-foot Publix Super Market.

The post Sterling Organization Buys Atlanta Shopping Center appeared first on Commercial Property Executive.

Northside Medical Snellville is the first medical office building in the county that is not part of a hospital campus. Image courtesy of Northside Hospital

Northside Hospital, in partnership with Realty Trust Group, has opened Northside Medical Snellville, a 45,000-square-foot medical office building in Snellville, Ga.

First announced last year, the project is part of The Grove at Towne Center, a $100 million mixed-use development in downtown Snellville, that also includes residential and retail portions. Northside Hospital came on board as part of the second phase and, according to prepared statements from Debbie Bilbro CEO of Northside Hospital Gwinnett and Northside Hospital Duluth, this is the first medical office building in the county that is not on a hospital campus.

The Class A medical center offers services such as orthopedics, women’s imaging, general surgery, physical therapy and a multispecialty surgery center. A 7,500-square-foot medical retail building is adjacent to the property.

Located at 2306 Wisteria Drive, Northside Medical Snellville is close to the intersection of U.S routes 78 and 124, also being roughly 26 miles east of downtown Atlanta. Piedmont Eastside Medical Center is less than 2 miles away. Other medical facilities in the surrounding area include Snellville Family Dental, Georgia Dermatology Partners, Northside Snellville Primary Care and Georgia Ambulatory Surgery Center, among others.

Northside Hospital Gwinnett, in partnership with Physicians Realty Trust and Realty Trust Group, broke ground in July on Northside Medical Buford, a 100,000-square-foot medical office property in Lawrenceville, Ga. Slated for completion in the summer of 2024, the building topped out in September. Northside is also continuing the work at its 15-story patient tower at Northside Hospital Gwinnett, with planned completion in 2025.

The post Northside JV Opens Atlanta-Area MOB appeared first on Commercial Property Executive.

Westmoreland Mall in in Greensburg, Pa., another CBL Properties-owned asset. Image courtesy of CBL Properties

CBL Properties and Horizon Group Properties have obtained a $79.3 million loan for the refinancing of The Outlet Shoppes at Atlanta, a 404,906-square-foot retail center in Woodstock, Ga. The non-recourse, 10-year note bears a fixed interest-only rate of 7.85 percent and replaces two loans totaling $69.5 million, set to mature this November.

In 2019, CBL sold a 15 percent interest in The Outlet Shoppes at Atlanta to Horizon for $20.8 million. After the transaction, both companies owned a 50 percent stake in the property. The net proceeds were used to reduce outstanding balances on CBL’s line of credit.

An Atlanta-area retail center

Designed by Adams + Associates Architecture, The Outlet Shoppes at Atlanta came online in two phases on a 38.5-acre site. The co-developers broke ground on the 371,906-square-foot first phase in 2012, while the construction of the 33,000-square-foot second phase began in 2015.

The property’s tenant roster includes more than 100 brand stores such as Saks Fifth Avenue OFF 5th, Kate Spade New York, Michael Kors, Coach, Nike, Cole Haan, Tommy Hilfiger, Adidas, Fossil, Gap, Levi’s and Tesla.

Located at 915 Ridgewalk Parkway, The Outlet Shoppes at Atlanta is roughly 25 miles north of downtown Atlanta. The retail center is right off Interstate 575, in an area where the daily traffic count reaches more than 94,000 vehicles.

In recent months, Atlanta’s retail sector has benefited from the metro’s substantial residential growth. However, the construction activity slowed down in the second quarter of this year when compared to 2022’s second quarter, according to a Marcus & Millichap report. Development remained under the 2 million-square-foot mark, while deliveries scheduled for the next two years total less than 500,000 square feet.

The post CBL Properties JV Lands $79M for Atlanta-Area Refi appeared first on Commercial Property Executive.

The Union City Logistics Center was announced alongside another Atlanta industrial project, the Adairsville Logistics Center. Image by AJS Studios courtesy of Stream Realty Partners

AEW Capital Management and Stream Realty Partners have completed the Union City Logistics Center, a 360,180-square-foot facility in Atlanta. The joint venture originally broke ground on the project in September of last year.

Union City Logistics Center is a front-load facility that features 68 dock-high doors, two drive-in ramps, 130-foot to 240-foot truck courts and 36-foot clear heights. Included in the building is a 2,373-square-foot potential office space, LED lighting, ESFR sprinklers, 119 trailer parking spots and 137 car parking spaces.

Situated at 4811 Flat Shoals Road, the logistics center is in Atlanta’s Airport submarket, the second-largest industrial submarket in the city. Located along the Interstate 85 South corridor, the property is within proximity of major thoroughfares including I-285, I-20 and I-75. Some 80 percent of the nation’s population is within a two-day driving distance.

Future tenants are within 4 miles of the Fairburn CSX Intermodal Terminal, for railway transportation, and 11 miles from the Hartsfield-Jackson International Airport. The property is located in Fulton County, home to some 71,000 industrial employees and Atlanta’s largest industrial labor force.

Evans General Contractors served as the project’s general contractor. Virginia Crabtree, senior vice president of construction at Stream Atlanta, and Isaac Weeks, vice president, oversaw development. Stream will provide leasing services, led by Vice Presidents Scott Jones and Nick Peacher, for the warehouse, along with property management.

Stream’s projects

The Union City Logistics Center development was announced alongside another Atlanta project set to be developed by AEW and Stream, the Adairsville Logistics Center. Situated in the Northwest submarket, the 408,240-square-foot facility features 36-foot clear heights, 66 dock doors and two drive-in bays. Stream’s Jones and Peacher are the project’s leasing brokers.

Stream has also recently completed a 1 million-square-foot logistics center in Houston. The Portside Logistics Center is a two-building, Class AA development with a 760,000 square-foot-cross dock asset and a 260,000 square-foot front-load property.

The post Stream, AEW Complete 360 KSF Atlanta Asset appeared first on Commercial Property Executive.

Barrett Summit spans 180,000 square feet. Image courtesy of Lincoln Property Co.

Tioga Capital has secured a 27,000-square-foot lease with infrastructure contractor Plateau Excavation, at Barrett Summit, a three-building, 180,000-square-foot creative office property in Kennesaw, Ga.

Lincoln Property Co. Vice Presidents Matt Fergus and Seabie Hickson oversee leasing at the property and secured the tenant. NAI Brannen Goddard’s Managing Director David Dixon represented Plateau Excavation in the agreement.

The owner purchased the property in 2022 for $11 million and financed the acquisition with a $14.8 million loan from Georgia Banking Co., according to CommercialEdge.

Barrett Summit has floorplans ranging from 25,000 to 40,000 square feet and features 912 parking spaces. Other tenants at the property include Old Republic Aerospace and Excel Electrical Technologies, CommercialEdge data shows. Ownership has recently implemented various upgrades to the properties.

Located at 1990 Vaughn Road NW, the 14.6-acre property is close to Highway 41 and Interstate 75, some 5 miles from Marietta and roughly 24 miles from Atlanta. It is also adjacent to the Cobb County International Airport and near the Town Center at Cobb shopping center.

As of August, Atlanta’s office vacancy rate stood at 18.7 percent, above the national rate of 17.5 percent, a recent CommercialEdge report shows. The average listing rate in the metro was $31.01, according to the same source.

One of the largest recent leases in the metro area was Morgan Stanley’s 100,000-square-foot expansion in Alpharetta, Ga., bringing the firm’s footprint to a total of 216,000 square feet.

The post Tioga Capital Secures 27 KSF Lease in Atlanta appeared first on Commercial Property Executive.

Investcorp has expanded its U.S. industrial holdings with the acquisition of a 31-property portfolio totaling approximately 1.6 million square feet across five major markets for $216 million, Commercial Property Executive can first report. With this latest investment, the company’s national industrial footprint has grown to more than 600 buildings across 42 million square feet valued at approximately $4.8 billion.

The properties, which are 94 percent occupied, are located in the Atlanta, Boston, Central New Jersey, Allentown, Pa., and San Antonio, Texas, markets. The company notes the properties are in well-established locations with strong demand for infill industrial projects and markets that have major population bases, diversified economies and consistent rent growth.

Investcorp declined a request from CPE to identify the seller of the portfolio or provide further details on the assets acquired.

The firm’s latest acquisition is a testament to its confidence in tailwinds that are shaping the industrial sector, Michael Moriarty, principal & head of commercial acquisitions at Investcorp, said in a prepared statement. Moriarty added that opportunities for scale and diversification still remain in the industrial market.

Herb Myers, co-head of real estate for North America at Investcorp, stated that the continued expansion of e-commerce, coupled with the need for diversified supply chains, has created significant opportunities for investments in factories and warehouses across the U.S.

Investcorp’s focus on industrial investments

A global investment manager specializing in alternative investments including real estate, Investcorp has acquired more than 1,300 properties for a total value of approximately $25 billion since 1996. The firm’s U.S. real estate strategy focuses primarily on the industrial and residential sectors and its portfolio reflects that thesis, with 98 percent of assets held in those property types.

One of the firm’s larger industrial deals occurred in February 2022, when it acquired a portfolio of 64 assets in seven major U.S. metros, totaling about 5.6 million square feet, for $640 million. That transaction grew Investcorp’s U.S. industrial real estate holdings to more than 425 buildings across 32 million square feet valued at approximately $3.5 billion.

More recently, an affiliate of Investcorp partnered with BKM Capital Partners in March to acquire a seven-property, 740,000-square-foot light industrial portfolio in the Las Vegas market from Terry York Properties in an off-market transaction valued at approximately $157.8 million. The portfolio, which had 21 buildings across four locations, was 98 percent leased at the time of the sale.

The post EXCLUSIVE: Investcorp Pays $216M for Industrial Portfolio appeared first on Commercial Property Executive.

3550 Engineering Drive recently secured a long-term tenant. Image courtesy of CommercialEdge.

RealCo has purchased 3550 Engineering Drive, a 101,094-square-foot office building in Norcross, Ga., within the Peachtree Corners submarket of Atlanta. JLL and Northmarq negotiated the deal on behalf of the buyer.

OnPace Partners represented the seller, HTZ Investments, which acquired the property in 2018 for $8 million, according to CommercialEdge data.

The Class A office building recently secured FLEETCOR as tenant. The company signed an 11-year leasing agreement for 25,244 square feet, bringing the asset’s occupancy to more than 58 percent. Other tenants at 3550 Engineering Drive include Nichols, Cauley & Associates and McMichael Taylor Gray, CommercialEdge data shows.

The four-story property features 26,108-square-foot floorplates, two passenger elevators, a glass exterior, common-area amenities and 396 vehicle parking spots, according to the same source.

Built in 1998, the office building is on 6.6 acres, adjacent to the future Peachtree Corners Technology Park and trail, which upon completion is slated to connect the city through a multi-use trail system. The property is also 2 miles from The Forum, 21 miles from downtown Atlanta, 24 miles from Marietta, Ga., and within 31 miles of Hartsfield-Jackson Atlanta International Airport.

JLL’s Executive Vice President Paul Hanna, together with Northmarq’s Vice President Katie Elliott arranged the transaction on behalf of the buyer. The seller was represented by OnPace Partners’ team of Tom Shafer, John Hinson and Chase Mathews.

Early this year, JLL brokered a major office deal in the market, assisting State Street in selling a three-building property within Atlanta’s Perimeter Summit. The brokerage company also procured the buyer, which paid $247.5 million for the Class A buildings.

The post RealCo Picks Up Atlanta-Area Office Asset appeared first on Commercial Property Executive.

8West came online in 2020. Image courtesy of CommercialEdge

The Atlantic Cos. has secured a $59 million loan for 8West, a 193,000-square-foot office building in Atlanta. The lender is Morning Calm Office Finance, a recently formed $500 million joint venture between Morning Calm Management and a global investment manager. Eastdil Secured negotiated the deal, as reported by Commercial Observer.

The financing also includes a mezzanine component, that was initially meant to be covered by MCOF. Proceeds retire a maturing $37.3 million construction loan that was provided by a private lender in 2018, according to CommercialEdge data. The property’s previous debt also included a two-year, $70.5 million bridge loan provided by Rubenstein Partners in 2021.

Completed in 2020, the Class A creative office building rises nine stories and features open floorplates averaging 22,500 square feet. Amenities include a fitness center, a rooftop deck, a catering kitchen, collaborative spaces and conference facilities. One of the property’s major tenants is Ford Motor Co., which leased 24,000 square feet for its Atlanta Research and Innovation Center in 2022.

Located at 889 Howell Mill Road in West Midtown Atlanta, the property is roughly 2 miles from the city’s downtown. It is also adjacent to the Georgia Institute of Technology and its campus.

Navigating the financing environment

MCOF aims to provide financing to office owners over the next two years as the economic environment has created a particularly severe capital void. Construction financing specifically has become harder to come by, and with more difficult terms if obtained. Lenders seem to be mainly looking for borrowers with the possibility of securing permanent financing.

But MCOF is not the only real estate lending venture that has Morning Calm Management as founding partner. In May, the Boca Raton, Fla.-based firm joined forces with Axar Capital Management for the creation of a joint lending platform targeting the middle-market CRE.

The post Atlantic Cos. Lands $59M Refi for Atlanta Asset appeared first on Commercial Property Executive.

Science Square Labs is part of the Science Square mixed-use development in Atlanta. Image courtesy of Trammell Crow Co.

Trammell Crow Co. and development partner Georgia Advanced Technology Ventures, an affiliate of the Georgia Institute of Technology, have both topped out part of the first phase of their Science Square project in Atlanta and signed its first tenant, Trammell Crow announced on Monday, Aug 21.

The building, called Science Square Labs, is part of the Science Square mixed-use development in Atlanta, adjacent to Georgia Tech’s campus. The 18-acre master-planned district will eventually offer commercial lab/R&D space and residential units.

The first tenant is Portal Innovations, a life sciences venture development engine, which is taking 33,136 square feet on the 13-story building’s 10th floor. In a prepared statement, Katherine Lynch, a principal with TCC Atlanta, explained that Portal’s space will include wet and dry labs, private offices, and collaborative space, including an outdoor terrace.

READ ALSO: Where to Find Office Investment Opportunity Now

Science Square Labs is a purpose-built, 368,258-square-foot building designed to accommodate state-of-the-art lab and clean-room space. It will also feature two food-and-beverage spaces and such amenities as a fitness center, conference space and an indoor/outdoor tenant lounge with a catering kitchen, which can be reserved for special events and opens to an outdoor amenity deck, complete with skyline views.

TCC is also delivering six pre-built, fully furnished “graduator” speculative lab/office suites for growing life science companies at Science Square Labs. The project team is seeking LEED Gold and WELL certifications, and the building will feature a 38,000-square-foot solar panel array atop the parking garage, installed by Cherry Street Energy.

CBRE’s Eric Ross represented the landlord in the lease negotiations; the tenant was represented by Dan Lyne and James Otto, also of CBRE.

Besides the lab facility designed by Perkins & Will, the first phase of Science Square includes a 280-unit residential building designed by RJT+R. Both are being constructed by Brasfield & Gorrie and are scheduled to deliver in the first quarter of 2024.

People and money

Atlanta has one of the nation’s fastest-growing labor pools for life science, annually graduating around 2,000 college students in the biological and biomedical sciences as of 2020, according to an April report from CBRE.

That has been backed up by substantial NIH funding—$708 million in 2022—and by both institutional funding and venture capital. The city has seen 20 percent job growth in the life sciences from 2019 to mid-2022, ranking Atlanta 10th nationally.

Last summer, Chicago’s Harrison Street partnered with Portman Holdings to invest in Coda, a 21-story tech-related mixed-use building adjacent to the Georgia Institute of Technology in Atlanta.

The post Trammell Crow Signs 1st Tenant for Life Science District appeared first on Commercial Property Executive.

Sharon Greens last traded in 2007. Image courtesy of ShopOne

ShopOne Centers REIT Inc., Pantheon and a global institutional investor have purchased Sharon Greens, a 98,224-square-foot shopping center in Cumming, Ga., in metro Atlanta.

SITE Centers sold the property for $17.4 million, according to public records. Sharon Greens last traded in 2007, when SITE acquired the asset for $17.9 million, according to CommercialEdge data.

Completed in 2001, the neighborhood shopping center comprises three buildings on a 15.4-acre site. Anchored by Kroger, Sharon Greens was 100 percent leased at the time of the sale. The property’s tenant roster includes Chase Bank, The UPS Store, Pet Supplies Plus, Heartland Dental Care, Goodwill, Kumon Math & Reading Center, State Farm, Great Clips, Papa John’s and Sushi Sama.

Sharon Greens is located at 1595 Peachtree Parkway, in the Forsyth County. The property’s location near the intersection of Peachtree Parkway and Sharon Road provides direct access to downtown Atlanta. The shopping center is located in an area that has a traffic count of approximately 60,000 vehicles daily. Sharon Greens is surrounded by 61,489 residents within a 3-mile radius, with an average household income that exceeds $200,000.

The acquisition of Sharon Greens marks the joint venture’s third grocery-anchored shopping center in Atlanta and the 13th asset of its kind in the partnership’s portfolio. Earlier this year, Pantheon and ShopOne purchased Bethesda Walk, a 68,271-square-foot retail center in Lawrenceville, Ga. The joint venture has also recently entered the Massachusetts retail market, with the acquisition of Heritage Park Plaza, a 117,337-square-foot shopping center in East Longmeadow, Mass.

The post ShopOne, Pantheon JV Buys Atlanta-Area Shopping Center appeared first on Commercial Property Executive.

Bank of America Plaza is one of the tallest buildings in the Southeast. Image courtesy of CommercialEdge

CP Group has started its $50 million renovation plan of Bank of America Plaza, a 1.3 million-square-foot office tower in Atlanta. The owner, through a joint venture with funds managed by HPS Investments Partners, picked up the office property in 2022, from seller Shorenstein Properties.

Holder Construction is the contractor, with Gensler in charge of the building’s redesign. CBRE will be providing leasing services. The renovation project is looking to reconnect Atlanta’s iconic skyscraper to street activity, said Gensler’s Co-Managing Director Kevin Songer, in prepared statements. The metro’s tallest building, the upgraded tower will be rebranded as “The South Star”.

Located at 600 Peachtree St. NE, the 55-story, Class A+ office building’s floorplates range between 23,500 and 25,547 square feet. The property includes retail space, 24 passenger elevators, an on-site conference center, a fitness center and 1,282 covered parking spots, according to CommercialEdge.

Reimagining Atlanta’s tallest building

The renovations will result in an upgraded 20,000-square-foot lobby, that will revive Kevin Roche’s original Art Deco design, a coffee bar, a common-area workspace for tenants and guests and an art gallery. CP Group is also planning for an on-site restaurant and a tenant lounge on the 55th floor.

Gensler’s reimagined lobby of Bank of America Plaza. Image courtesy of CP Group

The owner recently added 13 office spec suites totaling 100,000 square feet to the property, as part of its worCPlaces, a flexible workplace program, launched in August 2022.

Located on nearly 4 acres, Bank of America Plaza is close to Interstate 85 and Atlanta’s Tech Square, while being 12 miles from Hartsfield-Jackson International Airport and within 18 miles of Marietta, Ga.

The current tenant roster includes Bank of America’s financial center, CapTech Consulting, U.S. General Services Administration, The Ducos Law Firm and Benesch, among others. CBRE’s Executive Vice President Jeff Keppen and Senior Vice President Nicole Goldsmith are the leasing brokers in charge.

Earlier this month, CP Group secured five new tenants at Paces West, an 18-story, 640,000-square-foot office building in Atlanta.

The post CP Group Kicks Off $50M Revamp of Atlanta’s Tallest Tower appeared first on Commercial Property Executive.

Village Shoppes of East Cherokee in Woodstock, Ga. Image courtesy of First National Realty Partners

First National Realty Partners has expanded its portfolio of shopping centers in the Atlanta area with the acquisition of Village Shoppes of East Cherokee in Woodstock, Ga., and Cherokee Commons in Acworth, Ga.

According to CommercialEdge data, the seller of both retail centers was Bandera Ventures, represented in the transactions by CBRE’s Matt Karempelis.

Bandera Ventures acquired the Village Shoppes of East Cherokee property for $19.8 million in August 2021, and Cherokee Commons for $11.3 million in April 2021, according to the same source.

READ ALSO: The Big City Rebound and Its CRE Implications

Cherokee Commons. Image courtesy of First National Realty Partners

The 123,783-square-foot Village Shoppes of East Cherokee is anchored by supermarket chain Publix, which occupies 44,840 square feet. Publix has been a tenant since 2003 and has since been joined by other retailers including Dollar Tree, Workout Anytime, Huntington Learning Center and Subway. Located at 6234 Holly Springs Parkway in Woodstock, Ga., the shopping center has five available suites.

Seven miles away, the 103,835-square-foot Cherokee Commons is anchored by supermarket and department store chain Kroger, under a 66,918-square-foot lease. Kroger has been a tenant at the shopping center since 1986 and has expanded its footprint at Cherokee Commons several times during its more than 30 years of tenancy. The shopping center is located at 6199 Highway 92 in Acworth, Ga. Its other tenants include Pet Supplies Plus, CosmoProf, Fit Body Boot Camp and Jackson Hewitt, and has three available spaces.

Coast-to-coast shopping centers

For First National, these two shopping center acquisitions bolster the firm’s retail presence in metro Atlanta. First National is looking to continue growing its portfolio of open-air retail properties, focusing on grocery-anchored shopping centers across primary and secondary U.S. markets with strong demographics.

First National’s portfolio of retail properties stretches from Suisun City, Calif., to Plaistow, N.H. Earlier this year, First National acquired a 359,484-square-foot retail center in Waldorf, Md., which is anchored by Safeway. In December, the firm also expanded its presence in Alabama with the acquisition of the 304,935-square-foot Cullman Shopping Center, which is anchored by a 45,600-square-foot Publix Food Store.

The post First National Acquires Metro Atlanta Shopping Centers appeared first on Commercial Property Executive.

Medical office buildings on the Piedmont Fayette Hospital campus. Image courtesy of CBRE

Remedy Medical Properties, in partnership with Kayne Anderson Capital Advisors, has acquired two medical office buildings totaling 192,363 square feet in Fayetteville, Ga. The joint venture purchased the buildings from Piedmont Healthcare through a 70-year ground lease with a 15-year extension option, public records show. CBRE represented the seller.

In January, the partnership also acquired a 13-property medical office portfolio spanning eight states. Montecito Medical Real Estate sold the assets for $131 million.

On the Piedmont Fayette Hospital campus

The portfolio comprises two buildings of 97,164 square feet and 100,800 square feet, respectively, built between 1996 and 2006 on approximately 5 acres on the Piedmont Fayette Hospital campus. The Class A, five-story facilities feature controlled access, five passenger elevators, 544 parking spots and share parking with the hospital as well, without a specific number of spaces allotted.

Piedmont Healthcare is the properties’ anchor tenant, occupying 63 percent of the space; the nonprofit  has recently renewed its 15-year lease at both buildings. The portfolio was 97 percent leased at the time of sale to a mix of regional tenants, including Nephrology Consultants of Georgia and Women’s Specialists of Fayette, among others. Medical services provided include surgery, oncology, cardiology, orthopaedics, as well as pulmonary and critical care.

Located at 1265 and 1267 Highway 54, with exposure to West Lanier Avenue, the medical office buildings are 30 miles south of downtown Atlanta. Other medical providers in the surrounding area include Peachtree Medical Center, Piedmont Urgent Care, Synergy Primary Care and Southern Crescent Medical Clinic.

The CBRE team representing the seller included Vice Chairman Lee Asher, Senior Vice President Zack Holderman, First Vice President Jordan Selbiger, Senior Director Trent Jemmett and Director Cole Reethof.

The post Remedy, Kayne Anderson Buy Atlanta MOB Portfolio appeared first on Commercial Property Executive.

The Edison. Image courtesy of Stream Realty Partners

Morgan Stanley has signed a 100,000-square-foot lease extension at The Edison, a two-building office complex in Alpharetta, Ga. The financial services company expanded its original, 116,000-square-foot lease, fully occupying the Class A office campus.

Stream Realty Partners’ team of Managing Directors Peter McGuone and Bryan Heller negotiated on behalf of the landlord, Invesco Real Estate, while JLL represented the tenant. The owner picked up the property in 2020 from seller TPA Group, according to CommercialEdge.

Built between 2018 and 2020, the office complex consists of a pair of two-story buildings located at 1 and 3 Edison Drive, and includes two passenger elevators, 27,000-square-foot floorplates and a total of 1,078 vehicle parking spots, according to the same source. The property also features 10,000 square feet of amenity space, on-site café, a clubhouse, a fitness center, a conference center and outdoor meeting spaces.

Situated on an approximately 35 acres in the North Fulton submarket, the campus is close to Georgia State Route 400. The property is 3 miles from downtown Alpharetta, 27 miles from downtown Atlanta, 30 miles from Marietta and within 38 miles of Hartsfield–Jackson Atlanta International Airport.

Office leasing improves in Atlanta

Atlanta’s office vacancy rate improved in April, a recent CommercialEdge market update shows. The market started the year at 20.0 percent vacancy. The metro showed signs of improvement in March, when it’s vacancy lowered to 19.8 percent, further decreasing slightly in April, to reached 19.7 percent. That same month, JPMorgan Chase & Co. expanded its Atlanta footprint with a 40,000-square-foot deal at Monarch Tower.

Earlier this year, The Transportation Security Administration signed a 44,000-square-foot office lease at 1500 Centre in Atlanta’s East Point suburb. The 97,969-square-foot, Class A property is situated within Camp Creek Business Center.

The post Morgan Stanley Inks 100 KSF Expansion at Atlanta-Area Complex appeared first on Commercial Property Executive.

Paces West. Image courtesy of CP Group

Five new tenants at CP Group’s 18-story, 640,000-square-foot Paces West office building in Atlanta have signed leases at the Vinings property, including three for space in the company’s new move-in ready workCPlaces spec suites.

CP Group, which has owned the property at 2727 Paces Ferry Road SE since June 2019, is set to deliver six new spec suites, also known as Spec Places, by the end of the year including three for incoming tenants. The newly signed tenants are:

• Ellie Health, a wellness services provider that was represented by Sam Zelony of Windsor Realty, signed a lease for a 3,129-square-foot spec suite.
• Midea Group, a global high-technology company that was represented by Matt Barnes of Savills, signed a lease for a 3,618-square-foot spec suite.
• Johnson Service Group, a staffing and consulting firm represented by Kush Mirani of CBRE, leased a 5,394-square-foot spec suite.
• Barry Wehmiller Design Group, an engineering, architecture, construction, system integration and consulting firm, leased 2,953 square feet of space and was represented by Frank Cannon of CBRE.
• GA Medicare 101, an insurance company that was represented by Kevin Hermetz of Ackerman & Co., leased 3,094 square feet of space.

Jeff Bellamy and Adam Viente from JLL represented the landlord in each transaction.

READ ALSO: Navigating NYC’s New Office Landscape

Paces West is situated 2 miles from I-75 and has immediate access to I-285. The building is a short drive to Truist Park, home of the Atlanta Braves, and the Cobb Energy Performing Arts Centre. It is also within walking distance to numerous hotels, restaurants and a boutique shopping center. Property amenities include a fitness center with locker rooms, showers and yoga rooms; a café and coffee shop; on-site banking; dry cleaning; car wash service; two conference rooms and 24-hour manned security.

Flex space program

CP Group, the second-largest office landlord in Atlanta, rolled out the first flexible office spaces in August 2022 at its Lakeside Office Park and One and Two Ravinia in the city. The spec suite program was announced in late 2021 and designed in collaboration with Gensler, later joined by ASD | Sky. Earlier this month, the Boca Raton, Fla.,-based company announced it plans to complete 340,000 square feet of the flexible office suites this year across its portfolio. Atlanta office properties that are part of the program include 5600 Glenridge and the Bank of America Plaza, the 55-story, 1.3 million-square-foot office tower in Midtown Atlanta, acquired by CP Group in March 2022, Cumberland Center II and 3225 Cumberland, both in the Cumberland/Galleria submarket.

The customized suites are designed to meet the needs of companies seeking move-in, yet scalable office environments for evolving teams. The workCPlaces brand has three types of spaces that are aimed at small to medium-size tenants and enterprise-level businesses. In addition to Spec Places, the move-in ready pre-built office suites, the other offerings are Flex Places, individual suites with shared amenities, intended for high-growth companies, and Cowork Places, scalable coworking office space for small, growing teams.

Brendan McGee, director of worCPlaces at CP Group, said in a prepared statement the company is seeing high demand for customizable and adaptable environments by employers seeking environments that can accommodate their immediate, fast-evolving needs and long-term business goals. He said the leasing momentum in a market like Atlanta has nearly outpaced the company’s ability to construct the custom spec suites.

The post CP Group Inks 5 New Leases at Atlanta Tower appeared first on Commercial Property Executive.

The Proscenium lobby. Image courtesy of JLL

Manulife Investment Management has appointed JLL as leasing agent for The Proscenium, a 521,000-square-foot, Class A office tower in Atlanta. The firm’s Executive Vice President David Horne and Managing Director Jeff Taylor will handle marketing and leasing procedures on behalf of the landlord.

Completed in 2000, the building rises 24 stories in Midtown and features 25,000-square-foot floorplates. The property also encompasses a 10-level parking garage with EV charging stations and a capacity of two spaces per 1,000 rentable square feet. Current tenants include BakerHostetler, American Management Association and Columbia Property Trust,  CommercialEdge data shows.

Amenities at the building comprise a fitness center, multi-room conference facilities, a sundry shop, a refreshments bar and an outdoor gathering space, as well as a barbershop. Starting in early 2024, the landlord plans to implement multiple capital improvements to upgrade exteriors, the lobby and amenity spaces.

Located at 1170 Peachtree St. NE, the building is adjacent to the Colony Square shopping mall and the Atlanta Botanical Garden. It is also close to Interstate 85 and some 3 miles north of downtown Atlanta.

The total square footage of new leasing deals in Atlanta that closed in 2023’s first quarter surpassed the one preceding it, according to JLL, as constrained supply continues to propel the flight-to-quality trend. Vacancy rates have continued to improve in the metro, reaching 19.7 percent as of April, according to CommercialEdge research.

The post Manulife Taps JLL to Lease Atlanta Tower appeared first on Commercial Property Executive.

Forsyth Physicians Center. Image courtesy of Anchor Health Properties

Anchor Health Properties, in a joint venture with an institutional equity partner, has acquired Forsyth Physicians Center, a 91,940-square-foot medical office building in Cumming, Ga. Richmond Honan sold the Class A property, according to CommercialEdge information. First Citizens Bank provided the buyer with $20.5 million in debt financing.

The facility was 80 percent leased at the time of sale. Colliers Atlanta represented Anchor Health, while CBRE assisted the seller.

The acquisition marks Anchor Health’s second significant purchase in the Atlanta market in the last few months, adding to its Georgia portfolio of nearly 1 million square feet. The firm’s first investment in the metro involved a 43,730-square-foot medical office building in Lawrenceville.

A Class A medical office asset in metro Atlanta

Richmond Honan developed the property in 2016, financing its construction with a $15 million loan provided by United Community Bank, CommercialEdge data shows. The development team also included Lyman Davidson Dooley Inc. and Pencor Construction. The three-story building was 95 percent preleased at the time of its 2017 completion.

Forsyth Physicians Center provides various medical services, such as imaging, physical rehabilitation, surgery, cancer screening procedures and ORL procedures, among others. The tenant roster includes Resurgens Orthopaedics, GI North and North Atlanta Ear, Nose, Throat, and Allergy.

The facility occupies a 13-acre site at 4150 Deputy Bill Cantrell Memorial Road, adjacent to Northside Hospital Forsyth, some 40 miles Northeast of Atlanta. Other medical providers in the surrounding area include Village Medical – Morrow, Piedmont Urgent Care and Goodman Dermatology.

Executive Vice President Michael Lipton and Senior Vice President Andrew Walker with Colliers Atlanta negotiated on behalf of the buyer. Vice Chairman Lee Asher and First Vice President Jordan Selbiger with CBRE assisted the seller.

Anchor Health portfolio expansion in 2023

Anchor Health currently has $3.2 billion invested in stabilized healthcare facilities and 9 million square feet of medical office space under management. In the first half of 2023, the firm entered the Columbus health-care real estate market with the acquisition of a medical office building in Grove City, Ohio.

Two other purchases were made this spring, when the company expanded its Florida footprint with a 34,681-square-foot medical office in Sebastian, Fla., and then acquired Renewal Medical Center, a Class B facility in Lone Tree, Colo.

The post Anchor Health Expands Atlanta Footprint appeared first on Commercial Property Executive.

Spec Places in Bank of America Plaza, Atlanta. Image courtesy of CP Group

CP Group, of Boca Raton, Fla., plans to complete 340,000 square feet of its “worCPlaces” brand flexible office suites this year, the company announced on Monday, July 17.

Designed in collaboration with Gensler, the worCPlaces program was launched in late 2021, in response to market demand during the pandemic for flexible, modern workspaces.

The brand consists of three types of spaces designed to meet the needs of both small to medium-size tenants and enterprise-level businesses.

• Cowork Places, scalable coworking office space for small, growing teams
• Flex Places, individual suites with shared amenities, intended for high-growth companies
• Spec Places, traditional move-in-ready pre-built office suites

Tenants today urgently need customizable yet turnkey work environments that are fully amenitized for their staff, Brendan McGee, director of worCPlaces at CP Group, said in a prepared statement.

READ ALSO: Remote Work Shapes Office Sector

All worCPlaces suites offer flexible lease terms of two to 10 years. Tenants can have personalized company branding on their suite entrance, as well as hybrid meeting spaces, flexible workstations, dedicated break and copy/storage space, enterprise grade-internet and printing, and other in-suite amenities designed for flexibility and easy move-ins.

CP Group is underway on multiple worCPlaces offerings, all scheduled for delivery this year or early next year.

• Paces West in Atlanta offers seven Spec Places ranging from 3,000 to 7,000 square feet delivering next month, with two preleased.
• Bank of America Plaza in Atlanta is near completion on 100,000 square feet of Spec Places, totaling 13 suites of 4,000 to 25,000 square feet, two of which are preleased.
• 5600 Glenridge in Atlanta will have a full floor of Spec Places ranging from 3,000 to 4,000 square feet to be delivered by the end of the summer; one is preleased.
• Two Town Center in Boca Raton, Fla., has already leased up a full floor (of five spec suites) before its completion, recently completed another full floor of spec suites ranging from 1,700 to 3,200 square feet, and plans to build out another one or two floors of Spec Places by the end of this year.
• Boca Raton Innovation Campus in Boca Raton is underway on more than 30,000 square feet of Spec Places ranging from 1,700 to 3,200 square feet, as well as 16,000 square feet of Flex Places, to be delivered by 2024.

More choices

Before and through the pandemic, alongside the uncertainties of hybrid work, the coworking sector continues to expand, both in terms of total space offerings and the number of players, which include some of the commercial real estate industry’s most established companies.

The offerings have also become more sophisticated. For example, Sarah Travers, CEO of Boston-based Workbar, described different “neighborhoods” within a coworking space. A study neighborhood mimics a library, while a commons neighborhood is geared toward team collaboration.

The post CP Group Eyes Major Flex Office Expansion appeared first on Commercial Property Executive.

Flexential’s campus in Douglasville, Ga. Photo courtesy of Flexential

Flexential has broken ground on new developments in Portland, Ore., and Atlanta. The company plans to expand its FlexAnywhere service platform, adding data centers totaling 110 megawatts in the two markets. The firm expects to bring a total of 40.5 megawatts online this year.

Flexential has two projects underway in the Atlanta metro, both at the company’s Douglasville, Ga., campus. Douglasville-1, which broke ground in the fourth quarter of last year and will add 22.5 megawatts across 205,000 square feet of raised floor space, will come online later this year.

Earlier this year, the company started work on Douglasville-2, which will be constructed in several phases and add 36 megawatts across 240,000 square feet of raised floor space.

Atlanta has long been the gateway for all network traffic traversing the Southeast, making data centers a strong sector within the metro. “As an economic- and business-friendly metro, it has a large talent pool and high density of universities, attracting businesses of all sizes,” Flexential Senior Vice President of Platform Product Management Sherri Harrell told Commercial Property Executive.

“Geographically, the metro remains a strong location for mission-critical enterprise workloads in the Southeast that desire less volatile weather, as opposed to Florida, for example, which is prone to weather disruptions,” said Harrell. Atlanta is also an alternative to North Virginia, which also has some power constraints.

Flexential is also building two data centers in the Portland metro, both in Hillsboro, Ore. The company broke ground on Hillsboro-4 last year, announcing plans to construct its fifth facility on its campus there—together, Hillsboro-4 and a newer facility, Hillsboro-5, will bring a total of 54 megawatts online.

The 18-megawatt Hillsboro-4 data center is nearing completion and will be available for clients in the fall of this year. Shell construction started on Hillsboro-5 early this year. That project will deliver an additional 36 megawatts across 240,000 square feet of raised floor space.

Both data centers are on Flexential’s campus in Hillsboro and will leverage the market’s rich network connectivity. “Strong demand in the market has been driven by a combination of tax advantages for businesses, along with dense networking options,” Harrell told CPE. Hillsboro is the main Network Access Point of the Northwest, home to two subsea cable landing stations, further granting access to the Asia-Pacific region.

A new generation of data center design

All four new facilities will be constructed to Flexential’s latest standards of sustainable design. The data centers will operate at a power usage efficiency of 1.4 and will have zero water usage efficiency, requirements that need to be met to qualify for the company’s Green Finance Framework, for which it obtained a $2.1 billion securitization in 2021.

Flexential also plans to take advantage of the growth of artificial intelligence tools. “Our fifth-generation design is optimized to support the rapidly growing power and density requirements of AI and GPU-driven high performance compute deployments,” said Harrell.

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Breaking ground ceremony of Northside Medical Bufford. Image courtesy of Northside Hospital

Northside Hospital Gwinnett, in partnership with Physicians Realty Trust and Realty Trust Group, has officially broken ground on Northside Medical Buford, a 100,000-square-foot medical office building in Lawrenceville, Ga.

Northside Hospital acquired the development land in 2020 for $10 million, according to Gwinnett County records. The project will come online in the summer of 2024.

Upon completion, the medical office building, which is already fully leased, will provide a wide array of services such as imaging, primary care, cardiology, medical oncology, orthopedics and urgent care. The facility is taking shape at 2800 Buford Drive, across The Exchange at Gwinnett and near Coolray Field, providing direct access to Interstate 85. Downtown Atlanta is 35 miles southwest.

Northside Medical Buford is one of the firm’s latest projects in Georgia. Northside is currently building a 15-story patient tower at the Northside Hospital Gwinnett campus and recently opened a medical office building on-site, with plans to open a few other medical facilities in Phase II of The Grove at Towne Center in Snellville, Ga.

Atlanta had 23 medical office buildings in the planned and prospective stages of development as of July, set to add approximately 3.4 million square feet to the existing inventory, according to CommercialEdge data.

The post Northside JV Breaks Ground on Atlanta-Area MOB appeared first on Commercial Property Executive.

Image by Kruck20/iStockphoto.com

The Atlanta office market carried calmly on in the first four months of the year, despite the various economic headwinds that troubled the sector on several levels. While sales dropped in both prices and volume, office construction activity remained robust and leasing picked up pace. Here are the most relevant figures behind the metro’s evolution, according to CommercialEdge data.

Office construction remains afloat

Nearly 3.4 million square feet of office space were under construction in Atlanta at the end of April, representing 1.7 percent of total stock. The percentage was slightly smaller than the one recorded on a national level, where office developments accounted, on average, for 1.8 percent of stock. The index lagged the ones recorded in Austin (6.7 percent), Charlotte (3.8 percent) and Dallas (1.9 percent), but surpassed Phoenix (0.7 percent of stock).

READ ALSO: Top 5 Markets for Office Construction in the South

One of the largest projects underway was Spring Quarter in Atlanta. Taking shape around the historic HM Patterson Home & Gardens, the mixed-use development will add 525,000 square feet of office space to the metro’s inventory. Developed by Portman Holdings, the property will also comprise 370 apartments and retail space at full build-out.

Correll Pavilion. Image courtesy of Grady Health System

In terms of new supply, some 670,000 square feet of office space have entered the metro’s inventory year-to-date as of April. The largest addition was Correll Pavilion, the new 600,000-square-foot outpatient facility of Grady Health System that also includes 220,000 square feet of medical office space. The 10-story building at 80 Gilmer St. SE was developed by a team that included Skanska, H.J. Russell & Co. and HOK.

As for traditional office space, the most sizeable new building came online in January at 950 W. Marietta St., as part of the Westside Paper mixed-use development. The four-story property comprises 207,300 square feet of rentable office space. A joint venture between Third & Urban and FCP is the developer of the 15-acre, adaptive-reuse project that will feature up to 350 apartments and 1 million square feet of commercial space when complete.

Leasing activity slowly improves

Atlanta’s office vacancy rate continued to improve in April, reaching 19.7 percent. The index started the year at 20.0 percent, grew to 20.5 percent in February and showed the first sign of rebound in March, when it clocked in at 19.8 percent. The indicator lagged the one recorded in Austin (22.0 percent) but surpassed the ones of Charlotte (11.8 percent), Dallas (17.2 percent) and Phoenix (18.3 percent).

READ ALSO: 6 Things to Know About ‘Good Guy’ Guaranties

Similar to other important markets across the U.S., the metro’s office leasing activity saw several downsizes combined with a rise in subleases. In one of the largest deals to have closed in the first four months of the year, Deloitte signed a 95,000-square-foot lease at Promenade Tower, a 774,610-square-foot office building owned by Cousins in Atlanta’s Midtown. The lease is less than half the space the company occupied at 191 Peachtree in Downtown for more than 10 years.

2002 Summit Blvd. Image courtesy of CommercialEdge

In another sizeable transaction, Zaxby’s committed to 51,493 square feet at 2002 Summit Blvd. in the Central Perimeter submarket. The 423,195-square-foot office building is part of the Perimeter Summit campus, an 83-acre master-planned development comprising roughly 1.7 million square feet of office space.

American Express was also the subject of a significant leasing deal. In March, the financial services firm signed a 48,000-square-foot lease at Midtown Union, the neighborhood’s newest office building. Developed by Granite Properties and MetLife Investment Management, the 644,046-square-foot tower came online in 2022. Invesco anchors the property, having committed to nearly 300,000 square feet last year.

Coworking, on the rise in Atlanta’s office market

As flexible office space has become more and more popular in recent years, so did Atlanta’s coworking sector. In April, the metro had nearly 4.2 million square feet of shared office space, representing 2.1 percent of its total rentable inventory and marking a 20-basis-point improvement since the beginning of the year. The A surpassed all other important peer markets such as Charlotte (1.2 percent of rentable office space), Phoenix (1.5 percent) and Dallas (1.5 percent), but also Austin (1.8 percent).

Regus was the largest coworking operator in Atlanta as of April, having nearly 784,700 square feet of shared office space in its inventory. WeWork ranked second, with some 503,400 square feet, while Industrious occupied the third position, with nearly 299,000 square feet.

Fewer sales at lower prices

Only 604,500 square feet traded across the metro year-to-date as of April for a combined $65.8 million; in the same period of 2022, the transaction volume had reached some 4.4 million square feet and sales totaled $865 million.

READ ALSO: How Much Are Office REITs Weighing Down the Sector?

The median sale price per square foot of the period was $137, well below the national average of $196 and down 56.6 percent year-over-year. The metro also lagged all its peers, being surpassed by Charlotte ($177 per square foot), Phoenix ($237 per square foot), Dallas ($294 per square foot) and Austin ($389 per square foot).

The largest sale involved an 80,000-square-foot medical office building in Suwanee. Woodside Health acquired Research Court in March from Crossgate Partners. The buyer paid $12.1 million for the Class B asset, financing the acquisition with a $9.8 million loan from Independent Bank. The property previously traded in 2020 for $10 million.

The post Calm Waters for Atlanta’s Office Market appeared first on Commercial Property Executive.

Gardner Logistics Park. Image courtesy of Cushman & Wakefield

Acoustic and thermal management company NVH Korea has signed a 234,000-square-foot lease at Scannell Properties’ Gardner Logistics Park in Locust Grove, Ga. Cushman & Wakefield brokered the lease for the landlord.

NVH Korea is set to occupy the entirety of Building 2, located at 381 Davis Lake Road. Last year, Scannell also signed a lease with an undisclosed transport and logistics company to occupy more than 1 million square feet in Building 1 of the campus.

READ ALSO: Industrial Leasing Trends for 2023

As previously reported by Commercial Property Executive, the property currently houses several tenants, including Home Depot, which has leased 675,600 square feet in a Phase I building. Love’s Travel Stops occupies 205,200 square feet in a Phase II built-to-suit structure. Additionally, Radial Inc. has made a commitment to occupy 760,608 square feet in another first-phase warehouse, establishing its second fulfillment center in the Greater Atlanta region.

At full build-out, Gardner Logistics Park should encompass approximately 4 million square feet and consist of six Class A buildings. The park, which started being built in 2018, will offer access to Interstate 75 via two main entry points, situated along U.S. Route 23 and Market Place Boulevard, as well as U.S. Highway 42.

Cushman & Wakefield Director James Phillpott, Senior Directors Ray Stache and Lisa Pittman, along with Senior Associate Helen Cauthen handled the lease negotiations on behalf of Scannell. The leasing efforts for all three phases of the industrial park have been under the supervision of the Cushman & Wakefield team.

Atlanta’s industrial sector holds strong

Cushman & Wakefield research indicates that despite a decrease in total leasing, industrial demand remained stable in metro Atlanta during the first quarter of the year. Following a good performance in 2021 and 2022, leasing figures returned closer to historic levels. Nonetheless, Atlanta stood out among most metropolitan areas in the country by surpassing 5 million square feet of new leasing activity in the quarter.

Moreover, the direct vacancy rate in the market stood at 3.6 percent, significantly lower than the pre-COVID-19 average of 9.6 percent, according to the same source. Direct asking rates for warehouse/distribution facilities recorded a quarter-over-quarter increase of 2.6 percent, reaching $6.41 per square foot.

The post Scannell Signs 234 KSF Tenant in Atlanta Area appeared first on Commercial Property Executive.

2020 E. Park Drive. Image courtesy of Ackerman & Co.

Ackerman & Co. has purchased a 212,232-square-foot Class A industrial facility in Conyers, Ga., from developer Dayton Street Partners. The property, which was completed in late 2022, is located in the Atlanta metro’s Rockdale submarket. The project was financed by a $10 million construction loan originated by Byline Bank, according to CommercialEdge data.

Located at 2020 E. Park Drive, the rear-load distribution facility includes 32-foot clear heights, loading doors, two drive-in dock doors, 41 trailer parking spots and more than 200 vehicle parking spots. Akerman & Co. Senior Vice Presidents Chris Miller and Brett Buckner will handle leasing, with contracts available from 50,000 square feet upward.

Situated on approximately 23 acres, the industrial asset is close to Interstate 20, 10 miles from Covington, Ga., and is 28 miles from downtown Atlanta and within 31 miles of Hartsfield-Jackson Atlanta International Airport. Located along the I-20 East Corridor, the property provides easy access across metro Atlanta and to the ports of Charleston and Savannah.

Recent notable deals in metro Atlanta include KKR’s acquisition of a 700,000-square-foot Class A facility in Palmetto, Ga., and Taurus Investment Holdings’ purchase of a five-building industrial portfolio in Atlanta, along the I-20 West corridor.

The post Ackerman & Co. Picks Up Industrial Asset Near Atlanta appeared first on Commercial Property Executive.

9485 Highway 42 N. Image courtesy of JLL Capital Markets

EverWest Real Estate Investors has acquired a two-building distribution center totaling 271,294 square feet in Rex, Ga. Public records show the asset traded for $30.4 million. InLight Real Estate Partners sold the property with the assistance of JLL.

The industrial campus came online earlier this year. Both buildings feature 32-foot clearance, a rear-load configuration, a total of 72 dock-high doors and four drive-in doors, as well as parking space with a capacity for 316 vehicles.

READ ALSO: Expanding Into Industrial: Diversifying for Long-Term Success

Situated on a 21-acre lot at 9485 Highway 42 N., the campus is some 18 miles from downtown Atlanta. The property is less than 1 mile from Interstate 675, granting connectivity to interstates 75 and 285, as well as to Hartfield-Jackson International Airport.

JLL Senior Managing Directors Britton Burdette, Dennis Mitchell and Matt Wirth, together with Directors Mitchell Townsend and Jim Freeman, led the Capital Markets team that arranged the deal. The JLL Industrial Brokerage team of Executive Managing Director Stephen Bridges and Senior Associate Kimani Mustafa also participated.

Earlier this year, Burdette, Mitchell, Wirth and Townsend were part of the JLL team representing Dossche Holdings in the disposition of a three-building industrial portfolio, totaling 522,410 square feet, in Dalton, Ga. They also assisted Everwest in selling a five-property Atlanta industrial portfolio for $50 million in April.

The post EverWest Buys Atlanta-Area Distribution Center appeared first on Commercial Property Executive.

Great Valley Commerce Center. Image courtesy of MDH Partners

MDH Partners, of Atlanta, has closed on $90 million in financing from Wells Fargo Bank N.A., expanding an existing $93 million loan MDH has used in making its recent acquisitions of the 603,389-square-foot South Belt Central Building 4 in Houston and the 973,218-square-foot Great Valley Commerce Center near Atlanta.

South Belt Central Building 4 was completed earlier this year by Investment & Development Ventures, of Houston, according to CommercialEdge.

The loan is part of MDH’s Fund II, which builds on $750 million of equity to create $2 billion in acquisition power. The fund includes a mix of large university endowments and foundations and was raised in just two months.

It had originally closed in April 2021 and was expanded from $575 million in October 2022. The fund is 80 percent invested in dozens of industrial acquisitions and new developments across the country.

READ ALSO: East Coast Ports Challenge West Coast Mainstays

Chris Drew and Maxx Carney of JLL Miami represented MDH Partners in the deal. Melissa Frawley and Steve Hinkle of Wells Fargo led the loan origination. In a prepared statement, Frawley referenced a long-time relationship between MDH and Wells Fargo.

Nationally, industrial leasing in the first quarter fell 16.3 percent from the prior quarter, according to JLL’s Industrial Outlook. Overall, vacancy has increased over the same period by 40 basis points, to 3.8 percent.

Year-over-year, absorption in the first quarter saw a 47 percent decline as 58.6 million square feet was absorbed, JLL reported.

Forward thinking

So far this year, MDH Partners has acquired nearly 5 million square feet of industrial assets throughout the U.S.

In April, the company purchased Fort Worth Logistics Hub Building 1, a 670,914-square-foot industrial building in Fort Worth, Texas, from VanTrust Real Estate for $67.5 million.

And in February, MDH entered into a forward purchase agreement to acquire Loop 375 Industrial, an approximately 555,000-square-foot campus set for completion in the third quarter. The seller is developer NIT Industrial. Interestingly, MDH had provided NIT with a construction loan for the project, through MDH Fund II; the loan is coterminous with a senior loan originated through Veritex Community Bank.

The post MDH Partners Lands $90M Loan for Industrial Acquisitions appeared first on Commercial Property Executive.

Palmetto Distribution Center. Image courtesy of Lee & Associates

Global investment firm KKR has acquired two newly constructed properties – an industrial park in Phoenix and a warehouse in the Atlanta market – in separate transactions for approximately $250 million.

The purchases were made through KKR Real Estate Partners Americas III, KKR’s Americas’ opportunistic equity real estate fund. The fund was closed in October 2021 with $4.3 billion dedicated to opportunistic real estate investments, primarily in the United States. Last May, KKR said the fund would also be used for ground-up industrial assets. The company’s wholly owned U.S. industrial real estate platform, Alpha Industrial Properties, was at that time developing four projects and had four more in development for a total of 1.8 million square feet in markets including Atlanta, Dallas, Denver and Orlando, Fla.

Across all its funds in the U.S., KKR has committed or acquired approximately $7.5 billion of logistics assets in the industrial sector since 2018 and currently owns more than 48 million square feet of industrial real estate in major U.S. metropolitan areas.

Expanding Footprints

The Arizona property at South 99^th Avenue and Buckeye Road in Tolleson consists of three Class A buildings totaling approximately 1.3 million square feet and is located in Phoenix’s Southwest Valley industrial market. Known as Go 99 South, the industrial park is situated near major transportation nodes including Interstate Highway 10 and Arizona State Route 101. KKR did not disclose the seller.

Other KKR industrial assets in the Phoenix region including 101 at Van Buren, a two-building, 633,321-square-foot Class A logistics property in Avondale, Ariz., that the firm acquired in August for nearly $92 million from Crow Holdings Capital, according to CommercialEdge.

The approximately 700,000-square-foot Class A warehouse in Georgia is located in Palmetto, an Atlanta industrial submarket, and is in close proximity to the CSX Fairburn Intermodal Terminal in Fairburn, Ga., and the Hartsfield-Jackson Atlanta International Airport. CommercialEdge data states the 56.6-acre property is at 7965 Bowen Road and was developed by Becknell Industrial. Known as the Palmetto Distribution Center, the building was completed in 2022. Becknell received a $26.1 million loan from BMO Harris Bank in August 2021 for the building, according to CommercialEdge data. The same source reports that the property is subject to a 13-year unsubordinated net ground lease held by the Development Authority of Fulton County through Dec. 31, 2024.

Lee & Associates, which represented Becknell in marketing the site, stated at the time of the land purchase in August 2021 the distribution facility would be a cross-docked building with a 40-foot minimum clear height, ample care and on-site trailer parking, ESFR sprinkler systems, LED lighting with motion sensors and sufficient dock packages.

Ben Brudney, a director in KKR’s real estate group, said in a prepared statement the firm was pleased to be expanding its industrial footprint in both markets, which continue to have attractive growth fundamentals including positive demographic and onshoring manufacturing trends. Brudney added they are seeing resilient demand for high-quality, well- located industrial products and they believe that despite near-term supply headwinds, industrial supply and demand fundamentals will remain attractive in the medium to long term.

The post KKR Pays $250M for Two Industrial Properties in Phoenix, Atlanta appeared first on Commercial Property Executive.

Dick’s Sporting Goods at Canton Market. Image courtesy of CBRE

Acadia Realty Trust has secured $36 million in refinancing for Canton Marketplace, a regional power center in Canton, Ga. CBRE arranged the loan, provided by Voya Investment Management.

Built in 2008, the 335,445-square-foot property comprises five single-story buildings on some 29 acres. At the time of the refinancing, Canton Marketplace was 95 percent occupied. Acadia Realty Trust acquired the asset in August 2021 for $50.7 million, according to CommercialEdge.

Situated at 1810 Cumming Highway, 40 miles north of downtown Atlanta and just off Interstate 575, the property houses 40 tenants. The center is anchored by a Dick’s Sporting Goods, T.J. Maxx, PetSmart and pOpshelf. Lowe’s and Super Target shadow-anchor the property.

Mike Ryan, Brian Linnihan, Richard Henry and JP Cordeiro of CBRE Capital Markets’ Debt and Structured Finance team in Atlanta represented the landlord in the refinancing.

Metro Atlanta’s retail strength

A number of factors are playing into the current trend of robust retail demand in Atlanta and the larger Southeast. The area has seen a high amount of migration coupled with low taxes, a high quality of living and a number of universities. Considering the challenges that are lending towards a decline in retail inventory, this demand is only anticipated to get stronger, Robert Fransen, president & managing partner with Coro Realty previously told CPE.

Considering the stiff competition for retail space in Atlanta, the area has already seen various transactions this year. In April, Nuveen Real Estate acquired a 74,370-square-foot, grocery-anchored shopping center in Atlanta’s Buckhead neighborhood. The company considers the Atlanta metro as a priority market.

Also this year, a retail center some 25 miles west of downtown Atlanta, changed hands in a $19.7 million transaction. The DouglasVille Town Center comprises 272,785 square feet on more than 33 acres.

The post Acadia Realty Trust Lands Refi for Atlanta-Area Retail Center appeared first on Commercial Property Executive.

11350 Johns Creek Parkway. Image courtesy of Colliers

Boston Scientific Corp. has signed a long-term lease for a life science manufacturing and supply chain facility to be constructed in Johns Creek, Ga., in the Atlanta area. A joint venture between US Realty Advisors and Bain Capital is the landlord, while Pure Development serves as development partner. CBRE represented the tenant and Colliers worked on behalf of the landlord.

The 206,686-square-foot building will be constructed on a lot currently occupied by a State Farm campus which was constructed in 1991 and spans 339,862 square feet, according to CommercialEdge data. The existing structure will be demolished and development costs are estimated at $62.5 million, according to a prior release issued by Governor Brian Kemp.

Located at 11350 Johns Creek Parkway, the 45-acre site is close to Highway 41 and roughly 30 miles north of Atlanta. Numerous retail, dining and fitness options are located within walking distance of the property. Emory Johns Creek Hospital is also situated about 1 mile away.

A budding life science market

Colliers Executive Vice President Jessica Doyle, along with Senior Vice President Deming Fish, facilitated the transaction, representing the landlord. US Realty Advisors President David Grazioli stated in prepared remarks that the development represents an initial step toward creating a larger city center in Johns Creek.

Doyle also mentioned that the life sciences industry is expected to keep growing in the state of Georgia. Last year, Trammell Crow Co. broke ground on a 13-story tower in Atlanta which will include 364,750 square feet of lab and office space, along with 280 residential units. It represents the first phase of Science Square, an 18-acre master-planned district to include multiple lab and R&D developments.

The post Boston Scientific Inks 207 KSF Prelease in Atlanta appeared first on Commercial Property Executive.

Horizon Pointe – Building 100. Image courtesy of CommercialEdge

McCollister’s Transportation Group is moving its Atlanta-area base from Norcross, Ga., to Suwanee, Ga. The company will occupy the entire 168,584-square-foot Building 100 of Horizon Pointe Park, which is owned by Clarion Partners, according to CommercialEdge data. NAI along with Lee & Associates represented the tenant.

The front-load building in Suwanee features 32-foot clear heights, 60-foot loading bays, 33 dock doors and 16 levelers, along with 87 parking spaces and ESFR sprinkler systems. The facility came online in 2016 on a 15-acre site, CommercialEdge information also shows.

Located at 530 Horizon Drive, the building is 1.2 miles from Interstate 85. It is roughly 40 miles northeast of Atlanta and 44 miles from Hartsfield-Jackson Atlanta International Airport.

Lee & Associates Executive Vice President & Principal Joseph Mullican along with NAI President Scott Mertz brokered the lease on behalf of McCollister’s. Mullican stated in prepared remarks that the assignment has taken more than two years, being held back by supply and demand issues and specific building criteria.

While commercial real estate is feeling some heat due to rising interest rates and economic uncertainty, industrial remains an outlier due to its strong fundamentals. The sector continues to register high demand and rates keep growing, the average national rent being up 7.1 percent year-over-year as of March. Metro Atlanta outpaced the U.S. in rent growth, at 7.3 percent year-over-year.

The post Clarion Secures Full-Building Atlanta Lease appeared first on Commercial Property Executive.

Rendering of Clayton Technology Center. Image courtesy of Transwestern Investment Group

Transwestern Investment Group, through its Transwestern Strategic Partners Fund III, has purchased 29 acres of land for the development of Clayton Technology Center, a 265,775-square-foot Class A industrial project in Ellenwood, Ga. Construction is expected to start in the fourth quarter of this year, while completion is anticipated in the third quarter of 2024.

The company closed Transwestern Strategic Partners Fund III in October 2022 with $325 million in commitments. The fund, marking Transwestern’s biggest fundraise to date, will focus on value-add development and investment opportunities in key U.S. markets.

READ ALSO: Industrial Sector Fundamentals Remain Solid

Earlier this year, Transwestern moved forward with another one of its developments: the company completed Bayport 146 Distribution Center in Seabrook, Texas. The 454,600-square-foot cross-dock industrial facility came online after nearly two years of construction.

A future industrial development near Atlanta

Clayton Technology Center’s development team includes Transwestern Development Co., with Conlan Co. serving as general contractor. CBRE’s Senior Vice President Todd Barton and First Vice President Joanna Blaesing will provide leasing services.

The distribution center will take shape at 5490 Highway 42 and will include 36-foot clear heights, ESFR sprinkler systems, 60 dock doors, 245 vehicle parking spaces and 37 trailer parking spaces. Situated 10 miles from Hartsfield-Jackson International Airport, the development site also provides easy access to interstates 75, 675 and 285. Downtown Atlanta is some 13 miles northwest.

More than 9.5 million square feet of industrial space were under construction in metro Atlanta as of May, according to CommercialEdge information. Nearly 36.5 million square feet pertain to planned and prospective projects.

One of the current developments, a five-building light industrial park totaling 700,000 square feet, is coming online 6 miles from the future Clayton Technology Center. Conlan serves as general contractor for that project as well.

The post Transwestern to Build Atlanta-Area Distribution Center appeared first on Commercial Property Executive.

Great Valley Commerce Center Building 1. Image courtesy of MDH Partners

MDH Partners, of Atlanta, has acquired a 1.4 million-square-foot industrial portfolio consisting of two fully leased, newly completed Class A buildings, in the Atlanta and Memphis, Tenn., metro areas.

Senior Managing Director/Acquisitions Joe DeHaven served as the acquisition lead for MDH Partners. Dennis Mitchell of JLL represented the seller, Core5 Industrial Partners.

Great Valley Commerce Center Building 1 is a 973,218-square-foot industrial facility in the Atlanta suburb of White, Ga. Great Valley Commerce Center is situated on 68 acres at 200 Logistics Parkway Northeast, in the I-75 North submarket of Atlanta and close to I-75 and U.S. 411.

READ ALSO: Top 5 Markets for Industrial Construction in the South

Completed in 2022, Building 1 features 500 parking spaces, 220 trailer spaces, 190-foot deep truck courts, ESFR sprinklers and 40-foot clear heights. It’s fully leased to materials handling and logistics company Vanderlande, the market’s largest OEM supplier of logistics process automation for airports. The tenant plans to consolidate several of its Atlanta-area facilities at this property.

Great Valley Commerce Center Building 1. Image courtesy of MDH Partners

Desoto Logistics Center is a 445,138-square-foot industrial building southeast of Memphis, in Olive Branch, Miss. The 32.3-acre site is at 8150 Nail Road E. Desoto Logistics Center too was delivered in 2022.

The property features cross-dock functionality with 274 parking spaces, 61 trailer spaces, 185-foot truck courts, ESFR sprinklers and 36-foot clear heights. The location is less than one mile from Highway 78, less than 10 miles from I-269 and I-55, and close to Memphis International Airport and the FedEx World Hub.

Desoto Logistics Center is fully leased to Barrett Distribution Centers, a third-party logistics and direct-to-consumer fulfillment service provider.

Acquisition mode

Atlanta’s industrial market saw 3.2 million square feet of absorption in the first quarter, which ended at an overall vacancy of 4.5 percent, according to JLL research cited by MDH.

The Memphis industrial market saw about 727,000 square feet of absorption in the first quarter, bringing the sector to 5.8 percent vacancy, according to the same source.

Earlier this spring, MDH acquired Fort Worth Logistics Hub Building 1, in Fort Worth, Texas, from VanTrust Real Estate. The 670,914-square-foot industrial building sold for $67.5 million.

And in February, MDH picked up an industrial property in El Paso, Texas, before its completion by developer NIT Industrial. Loop 375 Industrial is a 36-acre, approximately 555,000-square-foot campus on Joe Battle Road. Upon completion, the development will feature two rear-load warehouses and a larger cross-dock facility.

The post MDH Partners Acquires 1.4 MSF Industrial Portfolio appeared first on Commercial Property Executive.

Libby Sims Patrick, CEO & Founding Principal, Sims Patrick Studio. Image courtesy of Sims Patrick Studio

Libby Sims Patrick is a firm believer that architecture is a form of visual storytelling. Throughout her 30-year career, she has always strived to create authentic spaces and integrate narratives into her projects.

After spending a decade with other architecture firms, Libby Sims Patrick built up her company from scratch in 2000, and is currently the CEO & founding principal of her boutique firm based in Atlanta. Sims Patrick Studio specializes in commercial real estate design, focusing on projects in the hospitality and retail industries, but its creative team has also taken on residential, office and mixed-use developments.

Commercial Property Executive asked Sims Patrick to reflect upon her professional background and weigh in on what’s new in commercial real estate design, particularly in the retail sector.

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Please tell us more about what led you to create Sims Patrick Studio and the principles behind it. 

Maisie’s Marketplace, a cafe within Belleview Inn in Belleair, Fla. Image courtesy of Sims Patrick Studio

Sims Patrick: Considering all I learned throughout my career, I wanted to create a collaborative environment that focused on foregrounding storytelling in design. It has always been a strong philosophy of mine, and by extension the firm’s, to make sure we are intentional with our designs—what story are we telling, how are we improving the built environment via this narrative—and applying this philosophy to all styles of interior design. We have been fortunate throughout our 20 years in business to work with clients that have unique visions and exciting stories to tell.

You managed to grow Sims Patrick Studio from a humble and small beginning to a respected and well-known boutique design studio. What were the most important lessons you learned along the way?

Sims Patrick: The crucial lessons I have learned have been about the importance of collaboration and respect amongst teams, especially when it comes to being a woman in the industry. We prioritize fostering a healthy, cooperative work environment for our staff, and I go out of my way to encourage work-life balance. Additionally, I have learned the importance of relationships—great relationships are as important as great design, and that applies not only to external client relationships, but to internal team relationships as well.

I am also especially passionate about education and mentoring. I am lucky to be at a stage in my career where I can use the experience I’ve gained over the years and pass that wisdom along to help empower young professionals.

What are some of the most pressing challenges women in leadership roles face today in the CRE industry?

Sims Patrick: In all sectors, women must work extra hard to be taken seriously, which has always been an overarching issue in the industry. Throughout my career, especially early on when I often found myself as the only woman in the room, I learned quickly how stereotyping can affect how women are treated in the office and on job sites, and this continues to be a pressing challenge today. We also need to make sure, especially on the CRE side, that women are equally considered as partners on projects.

How much has the design industry evolved in the past three years, in your opinion?

Sims Patrick: Over the past few years, sustainability has definitely come a long way, particularly on the vendor side of things. There is more to choose from, and the offerings are beautiful as well as durable. Being able to specify sustainable items is important to us but is impossible to do by ourselves, so it’s been rewarding to be able to see our vendor partners focus on being environmentally friendly in both their products and processes.

Additionally, the big push we saw surrounding indoor-outdoor spaces and biophilia during the pandemic isn’t going anywhere. Customers still crave fresh air and a connection to nature and that, in turn, affects the direction of our work.

Three years later, the design industry as a whole is still playing catch up from COVID-19. This means we are still working with expedited schedules. We’re always behind, even before we get started! One benefit of this is that it has helped designers across the board keep their priorities straight and keep project processes more focused.

Finally, we have been seeing some exciting growth and development in smaller markets on a national level. Designers, and as a result the consumer, are discovering the beauty of the U.S. again, and the special things that are happening in our smaller towns.

Retail space inside Grand Hotel Autograph Marriott in Point Clear, Ala. Image courtesy of Sims Patrick Studio

Tell us a bit about some retail projects you are currently working on. What makes them stand out?

Sims Patrick: We have a lot of exciting things in the pipeline at the moment—coastal resorts, urban-based experiences, and projects based on estates. In general, our work continues to prioritize the storytelling aspect of design. That has been the throughline of the retail work we have done in the past and the projects we are doing today.

How can design be used to thoughtfully blend retailers’ needs with customers’ expectations in such spaces?

Sims Patrick: When it comes to retail, consumers are definitely still interested in that ‘Instagrammable’ moment. Shoppers will leave their homes to shop brick and mortar in order to have a once-in-a-lifetime, in-person experience that they can share on social media.

From a hospitality perspective, guests’ expectations are always evolving, especially in the last few years as travel priorities have greatly shifted. People are looking for a totally immersive and unique experience that is worth their investment. This expectation absolutely extends to the on-site retail offerings, which should feel like a cohesive extension of the overall experience. Designers need to make sure they are being thoughtful when they approach their concepts, offering one-of-a-kind boutique experiences in their stores.

The post When Storytelling Is at the Forefront of Design appeared first on Commercial Property Executive.

The Interlock. Image courtesy of CommercialEdge

Armada Hoffler has expanded its presence in the Atlanta area. In an off-market transaction, the company paid $215 million for the office and retail components of The Interlock’s Phase One, a 9-acre, mixed-use development in West Midtown, to SJC Ventures.

Expected to close during the second quarter of 2023, the deal involved $100 million in fixed-rate financing and the conversion of Armada Hoffler’s existing mezzanine loan into equity, as well as the issuance of limited partnership interest units to the sponsor developer.

READ ALSO: How Office Stakeholders Are Coping With Maturing Loans, Looming Defaults

The Interlock acquisition resembles another Armada Hoffler purchase. In December 2021, the company paid $246 million for the majority stake in a 23-story mixed-use property in Baltimore. The company’s investment in the Exelon building was in line with its strategy of focusing on acquiring prime mixed-use real estate assets.

An Atlanta mixed-use development

The first phase of The Interlock came online in 2021 at 1115 Howell Mill Road NW, with Armada Hoffler serving as its general contractor. The $750 million project comprises 311,000 square feet of office and retail space and a 835-space garage, as well as residential space and a hotel. The property also features a 38,000-square-foot rooftop area that’s home to a full-service restaurant, indoor bar, outdoor bar, event pavilion and a 1,200-square-foot resort-style pool.

The commercial space was 89 percent leased at the time of sale, with another six percent under lease. The roster includes Georgia Tech and WeWork, but also the nation’s first Puttshack, among others.

SJC is still working on the project’s 275,000-square-foot Phase Two, slated to encompass 186,000 square feet of office space, 92,000 square feet of retail space (including a 42,000-square-foot Publix grocery store) and a 682-bed student housing tower. Completion is expected next year.

For Armada Hoffler, The Interlock acquisition significantly expands its Atlanta-area footprint. The firm’s local portfolio also includes the 223-unit Gainesville Apartments and Southern Post, a 4.3-acre mixed-use development transforming the former site of Roswell Plaza into a live-work-play destination.

The post Armada Hoffler Invests $215M in Atlanta Mixed-Use Project appeared first on Commercial Property Executive.

Robert Fransen, President & Managing Partner, Coro Realty. Image courtesy of Coro Realty

With its expanding population and business-friendly environment, the Southeast has been a magnet for investors in the past decade. Today, the region’s retail market seems to be as robust and dynamic as ever.

“Retail demand is booming,” according to Robert Fransen, president & managing partner with Coro Realty, a real estate investment and management company that concentrates in the southeastern U.S. Currently, the company owns and operates 36 retail properties, with 25 of them in the Atlanta metro area.

To scratch beneath the surface, Commercial Property Executive asked Fransen to talk about the trends he’s seeing in the sector and expand on the types of retail assets that are likely to do well in a recession.

READ ALSO:  5 States That Are Corporate Relocation Magnets

What are the top trends in the Southeastern retail market today? Do you expect any of them to define the sector for years to come?

Fransen: Continued migration to the Southeast will continue to drive regional growth. The combination of quality universities, low cost of living, pro-business governments, low taxes and pleasant climate make it an attractive place for individual and corporate relocations. This will remain a long-term trend.

In addition, retail inventory will continue to decline. Rising interest, high construction costs, and pre-leasing challenges will constrain development. It will continue, but increased supply will likely be outstripped by negative absorption from the redevelopment of malls and power centers to lower-density or non-retail uses.

The Brookwood’s Botica Patio in Atlanta, one of the properties that Coro Realty operates. Image courtesy of Coro Realty

Grocery-anchored, well-located, neighborhood centers will remain the most coveted retail product types. High street retail will grow as cities densify and streets are activated with urban retail. Malls will likely continue to struggle. In the Southeast, where the climate is less of an issue, enclosed malls cannot compete on price, convenience or appeal with open-air retail. Power centers will remain hit-and-miss, depending on location and tenant mix.

To what extent has the pandemic-induced migration altered your retail investment strategy?  

Fransen: The pandemic has not altered Coro Realty’s strategy. We avoided retail uses that competed with e-commerce by focusing on grocers, drug stores, food and beverage, convenience and service retail and medical offices. Those uses bounced back well from the pandemic.

The pandemic accelerated the adoption of e-commerce as an alternative to brick-and-mortar retail. Computers, office supplies and apparel were struggling before the pandemic. The pandemic ended the slow death of certain retailers in those categories, leaving behind the best in class. Nonetheless, unless retailers have omnichannel distribution plans, products that can be purchased online will continue to lag retail sales that do not compete with e-commerce.

What type of businesses are most interested in retail spaces across the Southeast today?

Burkitt Commons in Nolensville, Tenn., a 36,000-square-foot retail asset that Coro Realty operates. Image courtesy of Coro Realty

Fransen: Retail demand is booming. Almost every retail category is growing. Restaurants want to add locations, grocers are increasing store counts, discounters are growing rapidly. Everyone is looking to expand—for now. We expect a slowdown in the U.S. economy to taper those trends as retailers reassess their growth plans.

Please tell us more about the improvements that you’ve implemented at your retail properties in the past few years to meet the dynamic needs of retail tenants. 

Fransen: Coro Realty has focused on three principal areas: a tenant mix that leads to cross-sales, creating a sense of place that offers more than shopping and controlling operating expenses.

Landlords and tenants need to provide customers with reasons to shop in person. Tenant mix is one key reason. If a parent can drop their child at a tutor, get a haircut and have dinner afterward in the same place, that makes a retail center convenient.

Atmosphere is another reason. Things such as attractive landscaping, ample seating, lighting, public art and convenient parking make for a desirable atmosphere.

Lastly, inflation continues to hurt margins. In most retail, operating expenses are passed through to tenants in CTI reimbursements. There are limits to what retailers can absorb. Successful landlords will view the landlord-tenant relationship as a partnership and help tenants control expenses. Profitable tenants pay their bills on time.

How is the retail market in Atlanta performing? Are there any specific challenges here when compared to other metros you operate in?

Midtown Place Shopping Center in Atlanta, a 143,717-square-foot property managed by Coro Realty. Image courtesy of Coro Realty

Fransen: Coro’s retail operations have never been better. Retailers surviving the pandemic improved their operations, improved their distribution channels and repositioned themselves. That, coupled with the stimulus poured into the U.S. economy from 2020 to 2022, led to a remarkable retail rebound. Our portfolio-wide vacancy rate is roughly 4 percent and rent delinquency is negligible.

Atlanta’s retail landscape is very strong, but it faces the same challenges as other southeastern cities. The biggest is the lack of quality mass transit, which inhibits urbanization. The sprawl was an issue pre-pandemic. The adoption of work-from-home took that issue off the table for a while, as fewer people commuted. As the U.S. enters a recession, unemployment rises and employers regain more influence over the employer-employee relationship, companies are likely to bring more employees back to the office—at least three days per week. This will raise sprawl, congestion, and pollution as significant development issues.

What are you most worried about when it comes to the retail industry’s near- and medium-term prospects: the rise of e-commerce, the overall deteriorating economic conditions or the increased competition for well-located retail assets?

Fransen: There is always a risk of being outflanked by new supply. Someone may build a nicer property. In general, though, oversupply is more unlikely than decreased demand. Construction costs rise fast but fall slowly. Add in rising interest rates, and the new construction will need rents exceeding most in-place rents.

READ ALSO: Retail Real Estate Shows Broad Resilience

With rising prices continuing to drive many shoppers to lower-cost online options, how do you expect brick-and-mortar retail businesses to be impacted in the long term?

Fransen: E-commerce should worry retail landlords. Large retailers have omnichannel distribution and can leverage their distribution channels to make e-commerce and physical stores work together. Unfortunately, landlords do not make money from large retailers. They make it from local, mom-and-pop tenants. The large retailers are just the anchors landlords need to get local tenants. Bookstores, candle companies, shoe stores and even malls are dying because of e-commerce and bloated operating expenses. Power centers sell at material discounts to comparable-quality grocery-anchored centers because of concerns about e-commerce. Retail, in general, will be fine but certain players will struggle.

How difficult is it today to finance new retail acquisitions or redevelopments? 

Signal Mill in Chattanooga, Tenn., a 44,764-square-foot adaptive reuse of an early 1900’s textile mill, managed by Coro Realty. Image courtesy of Coro Realty

Fransen: Financing today is materially more challenging than a year ago. Leverage is lower, interest rates are substantially higher. Non-financial terms—recourse, debt service coverage ratios etc.—are tougher. The CMBS market has seized up. Due to rate volatility, borrowers are worried about the inability to lock a CMBS loan’s interest rate until closing, by which time they have spent considerable sums on earnest money and pursuit costs. CMBS originators are worried about an inability to sell the loans into the public markets. Life companies are extending fewer CRE loans and are doing so at lower leverage. Banks are lending less because they are receiving fewer loan repayments. Debt funds and credit unions have filled some of the gaps, but debt funds are expensive and credit unions struggle with larger loans.

Commercial real estate is likely to see significant de-leveraging. That means more equity will be needed. Equity is more expensive than debt, so retail asset values will continue to decline. It is a buyers’ market.

How do you expect the impending recession to impact the Southeast retail market?

Fransen: In a recession, people reduce expenses. The amount of people visiting restaurants remains high, but many restaurants report that per-ticket charges are declining. People are skipping the second glass of wine or dessert. This trend is likely to impact all classes of retail, with the retail market having been overheated. An occasional slowdown is healthy for the economy and a near-term correction is preferable to a long-term crash.

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