In May 2016, Adventus acquired 1000 Parkwood, a Class A 10-story office building located in the prestigious Cumberland/Galleria submarket of Atlanta, Georgia.
Located in the Cumberland/Galleria submarket of Atlanta, Georgia, 1000 Parkwood has 212,705 square feet of leasable space, and was acquired for US $38.9 million, or US $183/sf, significantly below its estimated replacement cost of US $350/sf. The property is 92% leased with an average lease term of 4.7 years. Based on a 3-year average net operating income, the property was acquired at a cap rate of 7.5%.
Debt financing for the property was initiated by JPMorgan who provided US $25.3 million of non-recourse first mortgage financing on a 10 year basis at a fixed interest rate of 4.55% and no principal payment amortization for the first 3 years.
“1000 Parkwood marks our second acquisition this year in the Atlanta suburban office market,” commented Rod Johnston, President and CEO of Adventus. “The property has an exceptional location, serviced by two major interstate highways, and is visibly located in the rapidly evolving Cumberland/Galleria submarket.”
“This acquisition follows our disciplined approach to deploying capital, in order to strategically grow our investment portfolio and create unitholder value. We have expanded our presence in Atlanta to over 525,000 square feet of Class A office property, further strengthening our geographic diversification. We expect 1000 Parkwood to generate returns well in excess of its cost of capital, and be immediately accretive to our unitholders.”
Mr. Johnston continued, “We continue to see Atlanta as an exceptional opportunity for yield and growth given its diverse and robust economy. Strong office market performance has been driven by population and job growth, which has increased annually for the last five years, outpacing new supply in the suburban office market.”