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Real Estate Bisnow
January 14, 2012 
Branch Takes A City Walk

Here's a solution for an ailing Sandy Springs mixed-use project: Tear down some of that retail to make way for Class-A apartments. (Haven't you always wondered what it would be like to live in The Gap.)
BRANCH properties nick telesca city walk reo sandy springs multifamily apartments
Branch Properties (its Nick Telesca above) just picked up City Walk in Sandy Springs, a 168k SF Kroger-anchored retail center off Hammond Drive and Roswell Road for $24.5M from a special servicer-managed REO sale. In turn, Branch plans to raze about 40k SF of the center to make way for a 300-unit luxury apartment complex, Nick says. Picking it up from an REO, Nick says Branch paid half its peak 2007 price to a group of Korean investors, or at a 6.75% cap. If all goes well in pre-planning and talks with the City of Sandy Springs, Nick says the firm could break ground by next year on the apartments.
PM Realty (Deerfield3)
branch properties city walk sandy springs reo
Now at a little more than 70% leased, Nick says Branch “fully expected to uncover a lot of problems in our due diligence because the property had been mismanaged.” Instead, what he found was the surviving tenants “actually had strong underlying business.” This isn’t the first time Branch is taking this tactic: It also purchased the 136k SF Kroger-anchored North Decatur Square, where it’s now demolishing 25k SF to expand the grocery store (give those peas some room to breathe). Nick says many of these retail projects—developed during the boom last decade—were “ill conceived” and offered too much retail space.
branch properties merchant's festival marietta johnson ferry roswell road value-add
Branch also picked up Merchant’s Festival, a three-building 53,600 SF Target-anchored shopping center at Johnson Ferry and Roswell roads in Marietta for an undisclosed sum. Branch’s 2013 focus: Acquiring Southeastern value-add retail projects. It’s already purchased $90M in five deals this past year, and Nick says it’s pursuing another $55M in deals so far. “We think the opportunity going forward is really in that value-add space,” noting that multifamily—from an acquisitions standpoint—is “a little overheated.” Nick tells us, “as a company and as a strategy, we’d like to refocus on retail right now.”

stream realty matt dileo russell dye nicolai schwarzkopf industrial rents leases dra advisors chep 5886 fulton industrial maxwell chase technologies renewal
Finally, industrial tenants are making longer commitments (settling down with the right building is actually a good thing). That’s according to Stream Realty’s Matt Dileo (center, with Russell Dye and Nicolai Schwarzkopf), who is seeing tenants at its portfolio of properties in Atlanta now looking to secure space for up to 10 years, instead of three- to five-year deals. And this helps landlords, given that rents—while still market rate—have “more bumps” during the life of a 10-year lease. After grabbing the leasing and management of the 1M SF DRA Advisors portfolio here, Matt says his team has secured some 400k SF in deals, including a 265k SF lease with Chep at 5886 Fulton Industrial and a 50k SF renewal with Maxwell Chase Technologies.
stream realty dan buyers mcwhirter simon arpiarian solvay pharmaceutical 793 sawyer road marietta wellstar hq
Speaking of Stream, the firm partnered with Brookwood Investment Group to sell the former Solvay Pharmaceutical facility at 793 Sawyer Rd in Marietta to WellStar Health System, which will use the 112k SF office building as its new HQ. Price was undisclosed. Stream’s Simon Arpiarian and McWhirter Realty Partners’ Dan Buyers brokered the transaction.

PM Realty Group got the leasing and management assignment for Ten Peachtree Place, the 20-story, 260k SF Midtown tower that is home to AGL’s HQ. This comes months after Cousins sold the tower to Prudential Real Estate Investors for more than $60M. It’s a price paid for AGL’s lease, which renewed there in 2011 for a 15-year term.

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