Dilweg Expands Atlanta Footprint in a Big Way
- Aug 18, 2015
Centennial Tower, a 36-story, 652,092 square-foot, Class A office tower in downtown Atlanta, has changed hands from seller Jackson Corporate Real Estate to buyer The Dilweg Cos., of Durham, N.C., the latter announced Monday. The closing price on the building was $68.8 million, a Dilweg spokesperson told Commercial Property Executive.
The building is at 101 Marietta St., a block from Centennial Olympic Park. Built in 1975 and renovated in 1998, the tower is currently 75 percent occupied. Major tenants include Turner Broadcasting, Peer 1 Hosting, Oracle and the Atlanta Hawks.
Jay O’Meara and CBRE’s Institutional Properties team represented the seller, and CBRE will be managing and leasing the building for Dilweg.
“Overall we are very bullish on downtown Atlanta, and we believe Centennial Tower is well-positioned to capitalize on the area’s continued revitalization,” Anthony Dilweg, CEO of the Dilweg Cos., said in a prepared statement. “The Atlanta office market is booming right now. We have acquired more than 1.2 million square feet of value-add office space in the last week alone and are diligently looking to add to our Atlanta portfolio over the next 24 months.”
The company plans to invest more than $7 million to upgrade Centennial Tower’s operating systems, common areas and tenant amenities to reposition the property.
The purchase of Centennial Tower brings Dilweg’s Atlanta office holdings to more than 1.5 million square feet. Last week, in a joint venture with New York Life, the firm closed on Royal Centre, a 630,000-square-foot office portfolio in Alpharetta.
The Atlanta office market is a rosy one for owners right now, according to a second-quarter report from Marcus & Millichap, which notes that demand is rising as the metro area enjoys 3.5 percent growth in office-using employment, while developers remain cautious about spec construction. Office absorption this year is expected to be the best since the recession started in 2008, and rents are predicted to rise for the fourth straight year.
Overall office vacancy should slide by 120 basis points, to 16.4 percent, this year, continuing the momentum from last year, when it fell 110 bp. Class A rents have risen from 8.2 to 11.5 percent in the Central Perimeter and Buckhead submarkets.