After fighting through delays caused by the COVID-19 pandemic, TerraCap Management has acquired two office/flex properties in suburban Atlanta for $27.6 million. Steve Good, partner & national director of acquisitions at TerraCap, told Commercial Property Executive that the investment management company purchased the properties from a joint venture between Petrus Partners and Crown West Realty LLC.
The portfolio totals 297,000 square feet and includes Cobb Corporate Center in Marietta, Ga., and Northwoods Commons in Norcross, Ga. The eight single-story buildings combine for a 73 percent occupancy rate and both have nearby access to interstate highways.
Located between 350 and 450 Franklin Road, Cobb Corporate Center is split into five buildings that total 195,921 square feet. The property is 80 percent leased and home to several anchor tenants including UnitedHealth, Ford Motor Co., construction staffing company Tradesmen International and home improvement company West Shore Home, Good told CPE. Cobb Corporate Center also features a recently completed tenant amenity center that includes conference rooms, a tenant lounge and a fitness center with showers. In Norcross, Northwoods Commons offers 100,720 square feet in its three buildings at 4940, 4960 and 5000 Peachtree Industrial Blvd. The property is 53 percent leased and offers 14-foot high ceilings with glassed office and conference rooms.
Matt Stewart, partner & director of asset management at TerraCap, said in prepared remarks that the acquisition of the two Atlanta-area office properties was part of the company’s value-add strategy that focuses on single-story office buildings in fast-growing suburban markets. Stewart added in his prepared statement that TerraCap will be enhancing the properties’ curb appeal, increasing visibility with new signage, improving landscaping and creating move-in ready “spec suits” that aim to fill up vacancies.
Tom Shafer and John Hinson of CBRE-Atlanta represented the sellers. Bridge Debt Strategies Fund Manager provided debt financing for TerraCap, with assistance from the CBRE Atlanta debt team.
TerraCap also tapped Lincoln Property Co. to lease up and manage the property. In March, Lincoln secured a 27,505-square-foot lease for a financial services company within TerraCap’s office park in Lawrenceville, Ga.
According to Good, TerraCap was originally looking at the properties earlier in the year, prior to the COVID-19 pandemic.
“It was about February when we first got interested in the properties,” Good told CPE, adding that TerraCap was familiar with the area due to owning other properties nearby. “We were coming to terms a week or two before COVID ramped up and from there through March, April and half of May, we didn’t have much options for lending, especially considering the properties’ vacancies.”
Good told CPE that once TerraCap found Bridge for the debt financing of roughly $18 million, the transaction was back on track and collaborated closely with Petrus to close the deal.