How a Suburban Office Beat the Market
TA Associates has sold the Greenway Pointe office buildings to Exeter Property Group for 100 bps below market cap rates in a rare trade of a Columbia Gateway property. (Office properties come up for sale there as often as Faberge eggs or Pee Wee Herman memorabilia.)
Cassidy Turley’s Jon Carpenter—who with colleague Graham Savage repped the seller—tells us 7164, 7168, and 7172 Columbia Gateway Dr sold for $16.1M, or $137/SF. The total 118k SF is 100% leased, and the buyer got in at a low basis, he says. The nine tenants signed three and four years ago at the bottom of the market and the average lease has six years to go. So Exeter will have to hold until at least 2020 to reap the benefits of lease rollover and rental rate growth, Jon says. (This is a lesson in patience and a reminder that 2020 is only six years away.) Still, it'll receive a nice cash flow in the meantime.
The deal also is a shot in the arm for Gateway, Columbia’s tried-and-true corporate heartland, while Columbia Town Center gives its neighbor a run for its money via a master-planned, mixed-use transformation. Jon tells us investor interest in area suburban office properties is increasing, and Exeter beat out 11 other bidders for the property, in which Cardinal Health is the largest tenant with 40k SF and The Columbia Bank and the Foundation Fighting Blindness follow with 20k SF each.