A fund sponsored by Atlanta-based real estate investment and management company Jamestown L.P. is raising $55 million to buy urban properties across the Southeast.
Jamestown said in a filing with the U.S. Securities & Exchange Commission the new fund is targeting a wide array of properties featuring office, retail, apartments, for-sale residential units, and hotels. The fund, Jamestown Invest 1 LLC, will acquire projects in cities including Atlanta, Raleigh, N.C., and Charleston, S.C. Jamestown has seeded the fund with new targeted investments.
In October, Jamestown paid $34.5 million for the Southern Dairies campus, which stands next to Ponce City Market on North Avenue. The Southern Dairies property is a five-building creative office project and part of the city’s historic Old Fourth Ward area.
Southern Dairies also stands next to the Atlanta Beltline Eastside Trail, one of the most popular public spaces in Atlanta with over 2.5 million pedestrians using the pathway last year.
In a filing with the Securities and Exchange Commission, Jamestown described a stunning amount of activity along the Beltline, saying, “There are 88 developments either completed or in progress, representing 12,136 new residential units and 1.5 million square feet of commercial developments."
The Beltline is expected to be a catalyst for up to $20 billion in economic development by the time the project is completed.
Jamestown also identified four other acquisitions in Atlanta for the new fund: 1357 Collier Road, 1483 Chattahoochee Avenue, 1401 Hills Place and 1435 Hills Place, referring to the properties as the “Upper Westside Portfolio.” In September, Jamestown paid just under $15 million combined for 1357 Collier Road and 1483 Chattahoochee Ave., according to Fulton property records.
"Atlanta’s Upper Westside ... has experienced an influx of creative users in recent years, many relocating ... for quality showroom space at a relative value compared to similar space in nearby Buckhead and Peachtree Hills,” Jamestown said in the filing.
Jamestown said the Upper Westside Portfolio is 60% occupied. It plans to carry out capital improvements and lease-up the properties. It may also evaluate converting space in the buildings for restaurants and creative offices.
The investments are underwritten with an anticipated 3% to 5% annual stabilized distribution yield, according to the filing.
In Atlanta, Jamestown is known for projects such as the transformation of the former Sears, Roebuck & Co. building on Ponce de Leon Avenue into Ponce City Market. That project has filled the city’s most expensive loft office space, featuring gross rents over $50 a foot, with multiple tech and media companies. Jamestown has more than $10.2 billion in assets under management. Its funds are backed with the investments of nearly 80,000 individual German investors, along with U.S. and global institutional investors.
Jamestown Invest 1 will also include U.S. individual investors for the first time.
Five to know
Every week, this column gives you five important numbers that show what's happening in Atlanta real estate.
35,192 square feet - The amount of space CareerBuilder is putting on the market for sublease at Buckhead's Two Live Oak Building. The company did not immediately respond to an email from Atlanta Business Chronicle. In 2015, the online job portal said it would move jobs into the 13-story Two Live Oak tower, which stands across from Lenox Square. Its Buckead location served as its sales office. Stream Realty reported the sublease.
784,481 square feet — What Atlanta's office market has absorbed so far this year. It underscores the strongest level of office demand since 2016. Source: Transwestern.
1.4% — The increase in the price of one-bedroom apartments in Atlanta last month. One bedrooms cost $1,430 to rent. Of the top 100 cities surveyed, Atlanta ranked as the 21st most expensive city, just behind Portland and Chicago. Source: Zumper
12.6 % — Office rent growth fueled by Atlanta's high tech jobs sector, from the second quarter of 2017 versus the second quarter of 2019. San Francisco saw a 17.5 % increase during that period, Portland 15.8%, Silicon Valley 15% and Charlotte, 13.9%. Source: CBRE
$80 — The average concession package per square foot that Atlanta law firms receive when they sign a new lease for office space. The average was based on leases signed between 2015 and 2019. Source: Newmark Knight Frank
Battle for talent
Radiation detection giant Mirion Technologies is moving 120 jobs from the Atlanta suburbs into the city.
Mirion is relocating from Smyrna to be closer to Georgia Tech and the housing and entertainment of West Midtown. The company will lease almost 32,000 square feet in a new development that converted more than 50-year-old warehouses into office, flex and showroom space.
Known as Inland Tract, the adaptive reuse project stands along Menlo Drive at Huff Road. West Midtown, a former industrial area, continues to evolve into an attractive destination for companies seeking an alternative to traditional office space and greater access to new luxury apartments, restaurants and entertainment. Georgia Tech is also a powerful catalyst for the area’s revitalization.
Matthew Maddox, a vice president with Mirion Technologies, said the company liked proximity to the Tech campus and the creative environment where employees can enjoy their office space and be productive.
Mirion joins other companies in the battle for talent that have decided to move into urban districts, with housing and amenities in walking or biking distance. Mirion is relocating its division for health, physics and radiation monitoring systems from a project in Smyrna called Highlands Overlook.
Its new space in West Midtown will include a 6,000-square-foot lab. Inland Tract was developed in a partnership between two real estate companies, Granite Properties and Third & Urban.
Mirion is relocating from Smyrna to Inland Tract in West Midtown.
“Today’s employees want to be in an energetic and vibrant environment,” John Robbins, a senior managing director with Granite Properties, told Atlanta Business Chronicle. “This isn’t a fad,” he said. “The momentum of this trend is sustained.”
Pierce Lancaster, managing partner with Third & Urban, said companies such as Mirion want to occupy spaces that help their teams collaborate and recruit top talent.
Mirion Technologies offers radiation detection, measurement, analysis and monitoring products. Its customers include the military, homeland security, hospitals, and universities. The company was formed almost 15 years ago. It has over a dozen facilities in North America, Europe and Asia.
Granite and Third & Urban also announced the completion of both Inland Tract and a sister project in West Midtown called Complex. It features retail, showroom and creative loft office space.
Complex is located at 1175 Chattahoochee Ave.
Granite Properties and Third & Urban formed a partnership to develop Complex, a new adaptive reuse project.
Both Inland Tract and Complex are now 75% leased.
Kronberg Wall was the architect, and Derucki Construction was the general contractor.
Other notable recent leases at both projects include:
- Rocket Farm Restaurants It will occupy 13,165 square feet at Complex, which includes a training facility for its 40 employees. Ford Fry, chef and owner of Rocket Farm Restaurants, said the company got its start on the Westside and has three restaurants in the area. "With this move, we’re able to double our space, offer a training facility for our staff and provide them with an inspiring space to work,” he said.
- Kitchen United, a shared-kitchen concept that recently raised $40 million. It will occupy 15,005 square feet of flex space at Inland Tract.
- Wellborn & Wallace, an Atlanta law firm specializing in Internet law, intellectual property and commercial litigation. It will occupy 5,000 square feet at Inland Tract.
The new leases total nearly 74,000 square feet at both Inland Tract and Complex.
Mirion Technologies was represented by Michael Tucker, Rob Patton and Scotland Wright of Scotland Wright Associates.
Rocket Farms was represented by Ben Rosenberg at Vantage Realty Partners. Kitchen United was represented by Kay Davis and Luke Allen at Newmark Knight Frank. Wellborn & Wallace was represented by Jeff Pollock at Pollock Commercial.
Commercial real estate brokerage Wilson Hull & Neal is overseeing the leasing of both Inland Tract and Complex.
Tucker revitalization
A developer is proposing to revitalize 24 acres on a long-vacant industrial property in Tucker with a new grocery store, restaurants, patio seating and pedestrian walkways.
Branch Acquisition Co. wants to rezone the property at 4560 Hugh Howell Road and Mountain Industrial Boulevard, a former Sears distribution center. It also needs the city to grant variances for the project.
The property would be demolished and redeveloped to follow a model of other community shopping centers in the company’s portfolio. For example, Branch’s Peachtree Battle development has over 50 tenants including Publix, Another Broken Egg Cafe, Holeman and Finch Bottle Shop, and Zoës Kitchen.
The proposed Tucker redevelopment would rise on a portion of site where Atlanta developer Stephen Macauley once pitched a $280 million sound stage complex. A little over two years ago, the Tucker City Council voted down the studio proposal.
Branch plans to include up to 10 buildings filled with commercial space, woven together with gathering areas and linked to a new multi-use trail.The planned redevelopment also complements long-term hopes for attracting more companies and adding modern amenities to the Mountain Industrial area, according to a project summary submitted to the city of Tucker.
“All of the amenities are conveniently located so that nearby employees and members of the public can enjoy lunch on a patio, or in a restaurant, walk or bike on the multi-use trail, or shop on the way to or from work,” according to the proposal.
Cities across suburban Atlanta, including Peachtree Corners, Alpharetta and Sandy Springs, are embracing the opportunity to redevelop aging commercial areas into new mixed-use town centers and link those projects to regional multi-use trails.
The idea shares some parallels with the Atlanta Beltline, the revitalization of a former railroad corridor encircling the city.
In the suburbs, Alpharetta may have seen the most success with the model so far. Projects such as Avalon and the downtown city center have drawn hundreds of millions in new investment combined from the likes of CBRE Global and PGIM Real Estate.
Vinings landmark
A 7-story office building just north of the city that for years has attracted companies with its impressive views of the Atlanta skyline has sold just over $20 million.
Atlanta Property Group bought Overlook I, a 140,000-square-foot building that gets its name for its location on a hill in Vinings known as Mount Wilkinson. Atlanta Property Group paid about $22 million, or $157 per square foot, according to sources familiar with the transaction.
It may not be as sexy as a trophy tower in Midtown, but Overlook I was acquired at a low basis, remains stable at 87 percent leased, and has an anchor tenant locked up for several more years, said Paradies Lagardère, a company that operates stores in airports, hotels and other locations.
Atlanta Property Group will put about $2.2 million toward renovations at Overlook I. Shep Dinos, managing partner with Atlanta Property Group, said his company bought the building at an attractive basis, and the investment presents “compelling risk-adjusted returns.”
It’s worth noting that developing a similar building to Overlook I in Vinings today would cost almost $400 per foot. Atlanta Property Group has been an active investor in the Vinings area for several years, Dinos said.
The seller of Overlook I was real estate investor Albany Road Partners. Jay O’Meara of CBRE represented Albany Road in the transaction.
A new home for tech in the suburbs?
A proposed $90 million technology and warehouse development is being designed to attract brand-name companies that could bring hundreds of jobs to Forsyth County.
McDonald Development Co. has applied to rezone 118 acres at Georgia 400, Highway 9 and Bethelview Road for a project that includes up to 907,550 square feet of technology, office and distribution space, according to plans submitted to the county.
The project would include six buildings that are expected to house employers providing up to 750 jobs, according to the filing. It also features 88 condos, along with retail space. McDonald Development says it already owns over 725,000 square feet of class A buildings in Forsyth County that are leased to companies, including Honda Finance, Scientific Games Corp. (Nasdaq: SGMS) and Phillips Electronics.
The new mixed-use project along Georgia 400 “is designed for technology and service company industries to locate their office, warehouse and light assembly operations,” the filing said. The buildings will be designed to attract “image conscious” businesses such as “Siemens, Honda, Porsche, etc.,” according to the filing.
The project continues the addition of large mixed-use projects along Georgia 400. Farther south, Halcyon, a 135-acre mixed-use project in Forsyth County, is rising at McFarland Parkway. The $370 million project will include up to 480,000 square feet of office and retail space, two hotels and 690 residential units. It will also connect to the Big Creek Greenway.
