A Dallas-based investor has added another office asset in Atlanta’s North Fulton submarket to its portfolio.
Velocis, a private equity real estate manager, said it acquired the two-building Parkway 400 office complex in Alpharetta for an undisclosed price. Parkway 400 comprises 194,664 square feet of office space in a six-story and adjacent two-story building.
Situated at GA. 400 and Old Milton Pky., Parkway 400 is across the street from Avalon, a mixed-use development whose office space has set a new standard for Class A office rents that scratch at $40 per square foot.
Velocis entered the metro Atlanta market in 2013 when it paid $14.5 million for Royal Centre One, a 153,797-square-foot office building in the Royal 400 office park, also in Alpharetta. The transaction comes as investors and cash-flushed funds look to the suburbs due to the lack of core properties on the sales market.
This interest is prompting owners to consider bringing their suburban office assets to market relatively quickly after acquiring them. For instance, New York Life Insurance Real Estate Investors and Charlotte-based The Dilweg Cos. just hired Cushman & Wakefield to market its portfolio of Royal Centre Two, Three and Four, the other three assets in Royal 400 where Velocis owns Royal Centre One.
Opus South Corp. developed the Royal 400 office park in the late 1990s into 2000. Its buildings offered floorplates of 50,000 square feet, the largest available in the submarket at the time.
New York Life and Dilweg acquired the three-building set totaling 626,506 square feet at Royal 400 in 2015 for $85.25 million, or approximately $136 per square foot. Kevin Maher, corporate vice president of external communications at New York Life, confirmed that the insurance company is selling the portfolio.
Cushman & Wakefield currently is in the marketing and bidding phase with Royal Centre Two, Three and Four, according to a spokeswoman on behalf of David Meline, an executive director in Cushman’s capital markets group.
Velocis’ well-performing investment in Royal Centre One left the investor seeking additional properties in Atlanta’s affluent North Fulton suburbs. “Due to the success we’ve enjoyed at Royal Centre One, our other property in the market, we felt very comfortable making another investment in the North Fulton submarket,” Velocis principal Jim Yoder said. “While close in proximity, Parkway 400 and Royal Centre One offer tenants two distinct environments.”
Velocis has tapped Colliers International to provide property management and leasing at Parkway 400.
Parkway 400 was developed in 2000 by a partnership between State Farm subsidiary AmberJack Ltd. and The Myrick Co., a longtime local metro Atlanta firm. At the time, CoStar Advisor Services predicted a period of prosperity for the Ga. 400 corridor. “As long as we have strong job growth in Atlanta, North Fulton will continue to do well,” CoStar said.