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Case Study

Atlanta deal of the year 2010

Challenge

Jones Lang LaSalle was hired to sell 3344 Peachtree, a 50-story mixed-use Class A office Property located in Atlanta’s desirable Buckhead submarket.  While marketing the property, 3344 Peachtree was 93% leased tenants such as Barclays, Littler Mendelson, Jones Lang LaSalle, Weinberg Wheeler, SPANX and Fifth Third Bank.  At the time of the sale, occupancy had increased to 97%.  As the commercial condominium component of a mixed-use master condominium structure, there were several operational/underwriting challenges.  In addition, while the opportunity appealed to foreign buyers, the condominium structure excluded many from considering.
 
Solution

  • The team created an offering memorandum which was distributed to a select group of investors, ranging from domestic to international investors, highlighting the rare opportunity to purchase a trophy asset with investment-grade tenants in a secondary market. 
  • The asset was positioned as having a pending increased occupancy, creating a value opportunity, as well as an incomparable location in Atlanta’s highest profile community within walking distance to over 2,000 hotel rooms, 1 million square feet of retail space, and over 30 restaurants.
  • The marketing team capitalized on the submarket’s gaining momentum with positive absorption returning to the market, as Buckhead continued to maintain the highest rental rates in the city, and attract tenants from other submarkets.

Results 

  • Numerous offering memorandums were disseminated and nearly two dozen potential investors toured the property.
  • Interest in the property was from a variety of foreign and domestic investors, including private investors, pension funds and REITs.
  • The Property was ultimately purchased by Parkway Properties, a publicly traded REIT, closing January 21, 2011.
  • The transaction closed at a 6.8% cap rate for a sale price of $167,250,000, or $346 psf.

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