Koger's per-sf price eclipses the $224-per-sf price Manulife Financial of Toronto paid Trammell Crow Co. and Real Estate Capital Partners in last week's $118 million sale of the 23-story, 527,000-sf Proscenium office building at 1170 Peachtree St., as GlobeSt.com reported. Both buildings are two years old. Atlantic Center Plaza is 86% leased; Proscenium, 80%.
Pope and Land, which developed Atlantic Center Plaza in 2001, will manage and lease the property. A closing date for the sale transaction wasn't announced.
"Today's acquisition of a class A building compliments our philosophy of investing in strategic properties with suburban-infill characteristics," says Koger CEO Thomas J. Crocker in a prepared statement. "We are leveraging our Atlanta platform, one of our core markets, with the purchase of another institutional quality asset in one of the city's strongest submarkets."
Koger has "confidence in the long-term viability of the Atlanta market and believes it can bring additional value to the asset," Crocker adds.
Under the contract's terms, Koger will assume two three-year variable rate secured loans which total about 74% of the purchase price. The weighted average interest rate on the two loans will be Libor, plus 211 basis points. Koger plans to fund the balance of the purchase price through a stock offering, using the company's secured line of credit or a combination of the two options, Crocker says.
In doing the deal, Crocker is confident the 86% leasing level will be stable since about 78% of the existing leases expire after 2011. A national law firm which occupies about 229,000 sf, or about 46% of the rentable space, has a lease that does not expire until October 2013.
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