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Billion Dollar Dilemma
Mike Gray of Panattoni.
Panattoni Development Co.'s Mike Gray and Greg Thurman are part of a dilemma, and it's a good one to have, especially after enduring the past two years. The dilemma? How to put more than a billion dollars to work.
Panattoni's joint venture with the California State Teachers Retirement System (CalSTRS) infuses the Sacramento-based developer with $1.15 billion for industrial and other commercial development and acquisitions. The PanCal JV gives CalSTRS the opportunity to invest in stabilized, core properties, and align itself with a strong engine for capital deployment. Approximately half of Panattoni's 5 million-square-foot local portfolio is part of the deal.
"We've essentially recapitalized the company," Gray said. "It's a huge arrow in our capital quiver, and a great strategic move for the company that will enable it to gain market share and grow as we emerge from these challenging times.
"Institutional capital is truly driving the build-to-suit development right now," Gray added. "The cowboy developer days of taking ownership risk are over for the foreseeable future."
Like most industrial developers these days, PanCal is especially focused on build-to-suits. Gray is tracking nine build-to-suit opportunities across the Southeast - vs. two at this point last year - and Panattoni also is developing a 287,000-square-foot build-to-suit in Sanford, N.C., for Caterpillar. Gray's not anticipating much, if any, speculative industrial development this year, but expectations do involve a steadily improving market.
"We're seeing a bump in activity all over the Southeast, and we're also starting to see some of these big, empty shells disappear," Gray said. "I'm very encouraged."
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The Big Hurt
Looking up at the Hurt Building.
It's no coincidence that Downtown's Hurt Building has picked up a steady stream of deals. Stream Realty Partners and Colliers, working with building owner Harbor Group International, have secured 37,000 square feet in leasing deals at the Downtown landmark that's nearly a century old and LEED Gold.
Stream's Ben Hautt, Simon Arpiarian and Kyle Luby represent Harbor Group and have closed leases with Grady Health System and Sustainable Atlanta, both new tenants at the Hurt Building, as well as the Beltline Partnership and 360 Atlanta. Colliers' Coleman Morris also represented ownership in leasing the former Capital Grill space to Southern Hospitality Group, which opened The Venetian Room restaurant and event space at the building. Bryant Cornett of Ackerman & Co. represented Grady Health System, while Ackerman's Hunter Carmichael represented Sustainable Atlanta. The Shumacher Group's Irving Jacobson represented Southern Hospitality Group.
"We're seeing a lot of traffic in terms of people kicking tires and looking to upgrade their image," Arpiarian said. "It's a beautiful building that no one could replicate now." |
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Building Momentum
Elliott Grand, Jeff Keppen, Chris Port and Katherine Lynch of CB Richard Ellis.
For Chris Port and Jeff Keppen's team at CB Richard Ellis, closing out 2010 with 320,000 square feet of agency leasing was the best way to build momentum for 2011.
Closings in the last two months involved 35,000-square-feet in leasing at DRA's Peachtree Building, including a renewal with Ashe, Rafuse & Hill, represented by Jay Dowlen of CBRE; 85,000 square feet at CB Richard Ellis Strategic Partners' Northcreek building, including leases with Prime Engineering, represented by Craig Goldberg and Bill Kilborn of CBRE, and HTNB, which was represented by Dave Kilborn of Grubb & Ellis; 20,000 square feet of leasing at Eola Capital's Two Ravinia, including a deal with Berkley Specialty Underwriting, which was represented by Carter's Dale Lewis; and 150,000 square feet in leasing at CB Richard Ellis Investors' Atlanta Plaza, including new transactions with Fannie Mae, SAS and the Securities and Exchange Commission, which leased 58,369 square feet and was represented by Dowlen.
Keppen and Port now look at an interesting challenge for 2011, marketing large blocks of office space at properties such as The Towers at Wildwood Plaza, Atlanta Plaza and Peachtree Center's North Tower.
"We finished the year with great momentum, and we're already seeing it spill into 2011," Keppen said. "2010 was a year of knocking it out with singles and doubles, and there seems to be traction with some of the bigger deals going into 2011."
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Rooster Coast to Coast
Rooster sighting in Oregon.
We're not sure if we're dealing with a flock of incarcerated birds locked up unjustly or chicken gratis, our favorite dish, but, either way, we're considering launching the Portland Rooster after this sighting in Oregon. It's time to extend our cross-country wingspan from coast to coast!
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