KBS REIT III Acquires Atlanta Office Building for $132.5M
- Aug 28, 2014
KBS Real Estate Investment Trust III has acquired 171 17th St., a 21-story, trophy-quality office building in Atlanta for $132.5 million plus closing costs from JP Morgan.
The property was 89-percent leased at the time of the closing.
“Currently Atlanta is No. 4 in the nation in terms of job growth and there is very limited new supply in the market,” Marc DeLuca, KBS’s eastern regional president, told Commercial Property Executive. “What made it appealing was the 24/7 environment in this market and the basis we were able to get in at.”
The building is a 509,237-square-foot property that was the world’s first LEED Silver Core & Shell certified high-rise building. It is located in the Midtown submarket of Atlanta.
“This was not a commodity asset. We are looking for assets that are in a 24/7 environments and offer appeal to millennials,” DeLuca said. “This property is part of the larger Atlantic Station mixed-use project which offers a vibrant live-work environment.”
Atlantic Station comprises 5.6 million square-feet over 138 acres and includes 20 restaurants, 50 retailers, a luxury boutique hotel, a movie theatre, 2,700 upscale residential units and three Class-A office buildings.
The building has high-end finishes, trophy-quality construction and an expansive lobby and amenities include an on-site café, conference center and shuttle service. According to DeLuca, plans are underway for renovations in some key areas.
“We are launching a spec suite campaign towards the current vacant space,” DeLuca said. “We are also expanding the conference center and plan to make some nice upgrades to the existing cafe.”
Atlanta is an area KBS is well versed in. KBS-affiliated companies own two other office properties in the city: the 188,509-square-foot Northridge Center I & II and 138,068-square-foot Overlook I.
Overall, KBS affiliated companies have completed transactional activity of more than $30 billion via 14 separate accounts, six commingled funds, five sovereign wealth funds and five non-traded REITs.