3000 Northwoods Parkway; 5000 Peachtree Industrial Boulevard; 3000 Business Park Drive Norcross, Georgia

Background:

  • Fee simple property acquisition of three Class B office parks comprising of 10 buildings and 368,000 square feet located in suburban Atlanta, GA.
  • Occupancy at the time of acquisition was 63%.

Timing

  • May 2004

Financials:

  • $18.7 million purchase price, approximately $51 per square foot, with a total capitalization of $21.0 million.

Strategy:

  • Lease vacancies and renew existing tenants at market rental rates.
  • Take advantage of recovering office markets in the area.
  • Reposition parks for individual sale to maximize proceeds.
  • Make upgrades to the property to enhance curb appeal.
  • Sell property within 3-5 years subject to the strength of the capital markets.

Execution:

  • The three office parks stabilized at 80% occupancy.
  • The business parks were sold separately between 2006-2008 for a total of $25.6 million. IRR was in excess of 18%, with an equity multiple of 1.76x.