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Industrial REIT Picks Alpharetta For Atlanta Debut

EastGroup Properties CEO Marshall Loeb

A Mississippi industrial REIT has made its Atlanta acquisition debut in Alpharetta, with eventual intent to reach “critical mass” in the metro area.

EastGroup Properties has purchased three industrial buildings up Georgia 400: 5770 and 5790 Shiloh Road, as well as 5940 Cabot Pkwy., a more than 238k SF portfolio fully leased to a variety of tenants, including Japanese pharma company Shionogi and EIS Inc., from Colony Northstar for an undisclosed sum, said CBRE's Chris Riley, who brokered the sale along with his team.

EastGroup CEO Marshall Loeb chatted about the purchase and the firm's Atlanta entry on a call with investment analysts earlier this month, but didn't identify the assets.

“What appealed to us about Atlanta is, it's a major U.S. industrial market. It really fits within our map. It's a major Sun Belt market, and we thought, given the size of the market, I won't say it's easy, but with some patience and some optimism, we could reach critical mass there in time,” Loeb said, adding that Atlanta is similar in strategy to what EastGroup did in Dallas.

“The other appeal of Atlanta to us, besides that we could get to critical mass,” he said, is "it's recovered a little bit later in the cycle compared to some other markets. So we think Atlanta is maybe at a slightly earlier inning than ... I’d say California or some other markets."

While the metro area's industrial market took a rent hit during the Great Recession, Loeb added “rents are higher today than they were 10 years ago.” Loeb said Atlanta's population growth, from 2.5 million the last time EastGroup considered investing in the area to 6 million today, is an appealing factor.

"Rents rose 7% last year in Atlanta as the market. So that's why we’re excited," he said. "I think it's going to be a good path of future growth for us. We’ll be patient there, but a market that size, there's always activity and we've figured, we think we've figured out exactly where we more or less want to be over time there.”