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The Inside Scoop on the People & Places that Shape Atlanta Real Estate | |
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Industrial All Stars
Lisa Ward and Bryan Blasingame of IDI.
One big thing 2010 had going its way: it wasn't 2009. Life didn't necessarily return to normal - and it certainly didn't reach the highs of four or five years ago - but Atlanta's industrial market gained positive momentum after a brutal previous 18 months.
IDI got a head start at the end of 2009 with its 744,000-square-foot lease with Colgate-Palmolive at Westpoint in Lithia Springs, and then really kicked it into gear in the first quarter of 2010 with a 1.1 million-square-foot build-to-suit for Clorox at Southcreek in Fairburn. Brad Pope and Mike Chambers of NAI Brannen Goddard represented Colgate-Palmolive, while CresaPartners represented Clorox. Counting Colgate, which occupied its Westpoint space in 2010, IDI leased more than 2.4 million square feet of industrial space in the past year.
For IDI, it was simply a matter of weathering the storm and having pad-ready sites ready to go once corporate tenants again began scouring the market. IDI VP Lisa Ward estimates that the developer still has the most pad ready sites in the state between its holdings in Savannah, Macon and metro Atlanta, with 500 of its 800 available acres pad ready.
"If you don't have pad ready sites, it's difficult to meet their timelines, and it's hard for them to conceptualize the project," said Lisa Ward, vice president of leasing at IDI.
While it was a good year to be IDI, it was also a good year to be Cushman & Wakefield's Ray Stache. C&W's Team Stache handled its share of blockbusters, including Phillips-Van Heusen's 851,349-square-foot lease at AEW's Liberty Distribution Center - where Resource Real Estate Partners Nathan Pramik represented ownership - and Kraft Foods' 960,000-square-foot build-to-suit at Majestic Airport Center III, where Stan Conway and Carr Carothers represented Majestic Realty. Kraft signed its deal with Majestic at the end of 2009 and moved into its new distribution center in the third quarter of 2010. A few blockbusters titillated the market throughout the year, but the bread-and-butter deals also made a bit of a comeback as tenants started thinking more long-term, DCT VP and Regional Director Todd Carter tells us. DCT closed the year with more than bread-and-butter, though, signing Caterpillar to a seven-year lease for 188,601 square feet at 115 Greenwood Industrial Parkway two days before Christmas, brining DCT's new transactions for 2010 to approximately 870,000 square feet. Jones Lang LaSalle's Bob Robers represented Caterpillar.
"All in all, it moved the portfolio in the right direction," Carter said of the end-of-the-year deals. "We're encouraged by what we saw in the second half, and I think people will be pleasantly surprised in the first six months (of 2011)."
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Out of Towners
From left to right: Casey Farmer, Ben Stafford, John Drake and Larry Callahan; Seated: Don Tirrell - All with Pattillo Industrial Real Estate.
Seefried Properties and Pattillo Industrial Real Estate more than held their own locally, but made big news in 2010 with corporate clients Amazon and Boeing, respectively.
At midyear, Pattillo announced an agreement to develop Boeing's 250,000-square-foot interiors fabrication facility for the Boeing 787 Dreamliner at Palmetto Commerce Park in North Charleston, S.C. Overall, the entire Dreamliner program represents a multi-billion investment and 3,800 new jobs for the Charleston region. Pattillo's Peter Anderson ran the Boeing deal.
Seefried closed out the year with one of the biggest development coups in the U.S. with 2 million square feet of build-to-suit development for Amazon in Chattanooga. The two, 1 million-square-foot distribution centers in Hamilton County and Bradley County, Tenn., represent a $139 million investment, 1,400 full-time jobs and 2,000 seasonal jobs. |
The Buyers and Sellers
Chris Riley, Frank Fallon and Brian Budnick of CB Richard Ellis.
Industrial investment sales, too, gained momentum and more than doubled up 2009, with 25 transactions in metro Atlanta totaling approximately $300 million, according to CB Richard Ellis. Institutional investors and REITs stepped back into the market, especially with top-shelf core properties.
AEW's acquisition of Liberty Distribution Center, where it then leased the entire building to Phillips-Van Heusen, is one such example, as is DCT Industrial Trust's acquisition of the 710,000-square-foot 500 Business Center Drive and the 570,000-square-foot 201 King Mill Court, both in Henry County.
CB Richard Ellis represented Dividend Capital Total Realty in one of area's biggest sales of the year, a Goodyear portfolio that included two buildings totaling 1.3 million square feet in Henry County. A joint venture between Fortress and Cardinal Industrial acquired the six-building, 4.7 million-square-foot portfolio for more than $170 million. IDI and its investment partners, too, had their share of success with portfolio sales in 2010, selling more than 5 million square feet of industrial property across the U.S. for approximately $320 million.
Value-added transactions never quite materialized as expected in 2010, but Sealy & Co. did acquire Braselton Distribution Center's note from Regions Bank, foreclose on the property and then lease 56 percent of the 440,000-square-foot building to Kichler Lighting. Additionally, MDH Partners bought three buildings totaling 540,000 square feet, including a $12 per-square-foot acquisition for a 210,000-square-foot building in Acworth that MDH then leased to JVC.
Gradually improving debt markets and institutional investors' hunger for core industrial product point to a better 2011, CBRE Vice Chairman Frank Fallon said.
"The equity capital will still be looking for core industrial, and we're hopeful the debt markets continue to chase deals," Fallon said. "We're very optimistic that industrial will be a preferred product type for institution investors. The outlook is good as far as available capital."
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