If you're shopping for an office building today, the choices are either ?trophy or trauma.? That's the opinion of Eastdil?s managing director Mike McDonald on what the current capital markets are for office buildings in Atlanta. The properties that are being sought are either the stabilized trophies or distressed assets. |
| The good news from Mike and others is there's a lot more product out there. ?We've been very busy this year. I think the market is going to get busier,? Mike says. While there are no definitive statistics out there, experts say there is a new flood of product coming to market— and more importantly, the capital looking to buy it. CBRE's Justin Parsonnet says he sees about 2M SF of office hitting the streets and more on the way. But the product trading so far is distressed assets— like Campanile?s sale to Dewberry Capital, which closed this week for around $36M—or solid trophy assets with a strong rent roll—like Centergy One. ?Stabilized assets are getting really strong pricing right now due to pent-up investor demand,? says Cushman & Wakefield's David Meline. With sellers becoming more realistic on pricing, improving fundamentals, cap rates and the prospect of no new product being developed, this is the best buyer?s market in 30 years, says Bull Realty head Michael Bull. |
We snapped this pic of Michael at Bricktop?s in Buckhead where we sat down to break bread and discuss the current state of the market. ?I think it's going to be slow construction for a long time and that's going to bring rents up,? he says. A recent report by Marcus & Millichap noted this trend, stating that there was a 5% increase in sales during Q2 nationally as REITs and institutional investors became more active. |
TROPHY OR TRAUMA
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Related Topics:
Bull Realty
, Centergy One
, David Meline
, Dewberry Capital
, Justin Parsonnet
, Michael Bull
, Mike McDonald
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