By Tudor Scolca
HFF has secured a $16.2 million loan on behalf of Origin Investments for the acquisition of Ellsworth, a loft office property in Atlanta’s West Midtown neighborhood. Stream Realty Partners sold the asset for $22.9 million.
Managing Director Gregg Shapiro, with HFF’s debt placement team, secured the five-year, floating-rate loan through Wells Fargo Bank. Ellsworth is located at 1460 and 1510 Ellsworth Industrial Blvd. and comprises three buildings.
The first two properties were originally industrial buildings constructed in 1954 and 1964. Stream Realty acquired the assets in 2014 and converted the industrial space to loft offices in 2015. The new buildings consist of 31,340 and 49,637 square feet of creative office space. The third, a 9,840-square-foot building, was developed last year specifically to accommodate restaurants Bacchanalia and Star Provisions Market & Café.
According to Origin, loft office space represents 1.3 percent of Atlanta’s total office inventory, but absorption is at an all-time high for this asset type. In 2015, loft absorption as a percent of the market total was 5.6, while in 2016 it increased to 12.2 percent, seven times its market share.
“The West Midtown submarket has experienced notable growth in recent years and we expect that to continue as major capital investment continues to flow into the area with the expansion of the Beltline as well as the announcement of several significant development projects,” said Shapiro in prepared remarks.
The property includes a 1.2-acre potential development site. The company is considering adding more commercial space, expanding amenities or developing a small residential component on the remaining land.
Ellsworth was 70 percent occupied by various tenants at the time of the transaction and Origin retained Stream Realty as leasing and managing agent. Floorplans range from 2,500 square feet of divisible space to 19,643 square feet of contiguous space.
Image courtesy of Yardi Matrix