Property Types Office
Aug 21, 2008
By: Barbra Murray, Contributing Editor
One Live Oak, a 199,000-square-foot office property in Atlanta, has just been snapped up by Grubb & Ellis Realty Investors L.L.C., which made the purchase on behalf of tenant-in-common investors. Crescent Real Estate Equities was the seller, having shelled out $31 million to acquire the property from TMW Real Estate Group in late 2004.
Located at 3475 Lenox Rd., One Live Oak sits on two acres within Atlanta's prestigious Buckhead-Lenox submarket. The 10-story structure was developed in 1981 and upgraded to the tune of nearly $1.3 million in 2004. In addition to Class A office space, the property encompasses a small amount of ground-level retail space that is currently occupied by a restaurant, and an adjacent seven-level parking facility. The tenant roster includes the Securities and Exchange Commission, the University of Georgia Real Estate Foundation Inc. and Corporate Offices Georgia LLA.
Buckhead, which has the highest Class A rental rate of all the Atlanta submarkets at $28.83 per square foot, has a relatively steep vacancy rate of 18.6 percent, according to a second quarter report by real estate services firm Grubb & Ellis Co. "There were a couple of significant move-outs that occurred, and there has been a glut of new construction with no pre-lease commitments, so that's what's making the vacancy rate look a little higher than usual," Andrea Franklin, senior research analyst for Grubb & Ellis, told CPN. "Buckhead has more construction than any other market right now. But there are rumors out there about leases in the pipeline and I think that over the next two or three quarters, the vacancy rate will level out."
While the office market in Buckhead is not exactly teeming with leasing activity, investors remain interested. Earlier this month CB Richard Ellis Investors acquired the 533,000-square-foot Northcreek Office Park on behalf of its Strategic Partners U.S. 5 Fund and in July, Wells Real Estate Investment Trust II grabbed the 955,000-square-foot Lindbergh Center in a sale-leaseback transaction with telecommunications giant AT&T. Developers have not turned their backs on Buckhead either. In March, a joint venture involving Crescent Resources L.L.C. and Manulife Financial kicked off construction of the $175 million, 486,000-square-foot Phipps Tower.
Santa Ana, Calif.-headquartered Grubb & Ellis Realty Investors, the real estate investment and asset management arm of real estate services firm Grubb & Ellis Co., manages a portfolio valued at over $6.5 billion across 30 states, in conjunction with its affiliates. Acting on behalf of program investors, the company has completed acquisition and disposition transactions totaling approximately $10.8 billion over the last decade. Stock of Grubb & Ellis Realty Investors' parent company opened at $3.52 today.
Based in Fort Worth, Texas, Crescent owns and manages a portfolio of more than 40 office properties accounting for an aggregate 20 million square feet in leading markets across the country. The company merged with Morgan Stanley Real Estate one year ago.
By: Barbra Murray, Contributing Editor
One Live Oak, a 199,000-square-foot office property in Atlanta, has just been snapped up by Grubb & Ellis Realty Investors L.L.C., which made the purchase on behalf of tenant-in-common investors. Crescent Real Estate Equities was the seller, having shelled out $31 million to acquire the property from TMW Real Estate Group in late 2004.
Located at 3475 Lenox Rd., One Live Oak sits on two acres within Atlanta's prestigious Buckhead-Lenox submarket. The 10-story structure was developed in 1981 and upgraded to the tune of nearly $1.3 million in 2004. In addition to Class A office space, the property encompasses a small amount of ground-level retail space that is currently occupied by a restaurant, and an adjacent seven-level parking facility. The tenant roster includes the Securities and Exchange Commission, the University of Georgia Real Estate Foundation Inc. and Corporate Offices Georgia LLA.
Buckhead, which has the highest Class A rental rate of all the Atlanta submarkets at $28.83 per square foot, has a relatively steep vacancy rate of 18.6 percent, according to a second quarter report by real estate services firm Grubb & Ellis Co. "There were a couple of significant move-outs that occurred, and there has been a glut of new construction with no pre-lease commitments, so that's what's making the vacancy rate look a little higher than usual," Andrea Franklin, senior research analyst for Grubb & Ellis, told CPN. "Buckhead has more construction than any other market right now. But there are rumors out there about leases in the pipeline and I think that over the next two or three quarters, the vacancy rate will level out."
While the office market in Buckhead is not exactly teeming with leasing activity, investors remain interested. Earlier this month CB Richard Ellis Investors acquired the 533,000-square-foot Northcreek Office Park on behalf of its Strategic Partners U.S. 5 Fund and in July, Wells Real Estate Investment Trust II grabbed the 955,000-square-foot Lindbergh Center in a sale-leaseback transaction with telecommunications giant AT&T. Developers have not turned their backs on Buckhead either. In March, a joint venture involving Crescent Resources L.L.C. and Manulife Financial kicked off construction of the $175 million, 486,000-square-foot Phipps Tower.
Santa Ana, Calif.-headquartered Grubb & Ellis Realty Investors, the real estate investment and asset management arm of real estate services firm Grubb & Ellis Co., manages a portfolio valued at over $6.5 billion across 30 states, in conjunction with its affiliates. Acting on behalf of program investors, the company has completed acquisition and disposition transactions totaling approximately $10.8 billion over the last decade. Stock of Grubb & Ellis Realty Investors' parent company opened at $3.52 today.
Based in Fort Worth, Texas, Crescent owns and manages a portfolio of more than 40 office properties accounting for an aggregate 20 million square feet in leading markets across the country. The company merged with Morgan Stanley Real Estate one year ago.
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