Franklin Street Buys Office Tower in Atlanta
- Apr 10, 2015
Franklin Street Properties, Corp., a Wakefield, Mass., office REIT, has boosted its Atlanta holdings with the purchase of Two Ravinia Drive, a 17-story, Class A office building and attached parking garage, for $78 million.
The REIT did not identify the seller but the Atlanta Business Chronicle reported Orlando-based Parkway Properties was the asset’s owner. Parkway had acquired Two Ravinia Drive in 2011 as part of a $462 million portfolio deal with Eola Capital L.L.C.
FSP plans to spend about $4.8 million in capital improvements at the 442,130-square-foot, multi-tenant office building in the Central Perimeter submarket. The building is currently 80.5 percent leased, with rents about 25 percent below the market asking rates, according to a news release.
The REIT already owns the adjacent tower, One Ravinia Drive. The acquisition increases FSP’s holdings in Atlanta to 1.8 million square feet. In addition to Atlanta, its other core markets are Dallas, Denver, Houston and Minneapolis. It seeks value-oriented investments with strong current income and long-term growth and appreciation potential.
“We are excited to increase our office property ownership presence in Atlanta, one of our five core investment markets,” George Carter, FSP president & CEO said in a prepared statement. “Our growing presence in the Central Perimeter submarket reflects our commitment to dense, amenity-rich, infill locations in high growth markets.”
Carter noted that both One and Two Ravinia Drive are within walking distance to MARTA’s Dunwoody rail and bus station. He called the Central Perimeter submarket a “dynamic office environment,” and cited the abundance of nearby hospitality, dining and retail options, including the Perimeter Mall.
FSP said it is paying for the acquisition with proceeds from non-core dispositions and borrowings under its revolving credit facility. Earlier this week, FSP sold an approximately 153,028-square-foot office property in Eden Prairie, Minn., to Dougherty Real Estate Advisors for gross proceeds of about $28 million. The Eden Bluff Corporate Center I property was fully leased.
In recent months, Parkway has been buying and selling properties in the Southeast. On Jan.8, the REIT purchased One Buckhead Plaza, a 20-story, 462,000-square-foot, Class A office building in the Buckhead submarket of Atlanta, for $157 million, according to Parkway SEC filings. Also in January, Parkway sold 525 North Tryon, a 406,000-square-foot office tower in downtown Charlotte, N.C., for $60 million to Grubb Properties and New York Life Real Estate Investors, the real estate investment branch of New York Life Insurance Co.