The campus is adjacent to a similar complex containing 471,871 sf in 12 buildings, also purchased in a JV with Sealy. The property is currently 88% occupied and will be jointly owned and managed, Winthrop stated in a release.
The purchase price includes assumed debt consisting of an existing $37-million first mortgage at 6.1% interest, maturing in November 2016, but does not include acquired cash reserves, according to Winthrop, which owns several other office properties within the Atlanta metropolitan area. Company executives did not return calls from GlobeSt.com for additional information.
Sealy, based in Shreveport, LA, with offices in Southwestern and Southeastern cities, oversees day-to-day operations of the JV while Winthrop's initial percentage ownership in the new venture is 68%. Winthrop states that the new venture is projected to yield an initial return on equity of approximately 11%.
Atlanta's Northwest office submarket totals 23.5 million sf of inventory and appears to be in good shape lately, according to Jones Lang LaSalle's second-quarter research report. Direct vacancy has increased only slightly yet remains just under 17% at midyear, while average asking rents have inched upward to $20.52 per sf, a relative bargain compared to the neighboring Buckhead and Central Perimeter submarkets.
Northwest also benefits somewhat from a lack of new office construction, although the Shailendra Group plans to start a 200,000-sf, class A building later this year at 2555 Cumberland Parkway in Vinings. A few significant leases were signed in the submarket during the second quarter, with PBS&J and Superior Essex taking up 75,000 sf each, according to JLL.
"Absorption and leasing activity in the next several quarters will most likely be sluggish, yet several tenants with large space requirements remain concentrated in the Northwest submarket," the firm's report stated. It mentions that Solvay Pharmaceuticals and Matria Health Care are both in the market seeking at least 100,000 sf of office space.
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