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May. 6, 2013

Trophy AT&T Office Campus in Midtown Atlanta Trades for $225M

By Georgiana Mihaila, Associate Editor

A partnership between private real estate investment sponsor Macfarlan Capital Partners and an entity associated with Cole Real Estate Investments recently paid $225 million for a Class A trophy office campus leased to AT&T located in Midtown Atlanta.

The campus, originally a build-to-suit for AT&T in 2001 and 2002, spreads over 7.22 acres and is home to the 16-story Midtown I and the eight-story Midtown II—the two buildings totaling 794,110 square feet of space. The Midtown I office tower boasts 512,101 square feet of office space, whereas the mid-rise Midtown II 282,009 square feet. Both buildings are currently 100 percent occupied.

During due diligence, Macfarlan negotiated to extend the remaining AT&T lease term from 4.5 years to 11 years and enhanced the credit backing the lease. Bryan Larson, firm partner for Macfarlan, highlighted the long-term AT&T lease and strategic location in Atlanta’s Midtown submarket, as well as the importance of the firm’s first joint venture with Cole in acquiring the trophy office campus. “The Midtown I and II acquisition represents a great opportunity for Macfarlan to provide its investors with a strong current yield from a trophy asset backed by outstanding credit,” he noted. “We are really excited about the opportunity to partner with Cole on this transaction and look forward to working with them on other transactions in the future.”

Chuck Vogel, senior vice president for real estate joint ventures, represented Cole Real Estate Investments in the transaction, while Chris Marshall of Jones Lang LaSalle Atlanta represented the seller. Mark West, Brandon Chavoya and Coler Yoakam with HFF’s Dallas office represented Macfarlan in arranging debt financing with RBS (Royal Bank of Scotland).

This is the second big investment in metro Atlanta for Cole Real Estate Investments, as the company also purchased Canton Marketplace, a 352,350-square-foot regional shopping center in Canton, GA for $61 million. The deal went through less than two weeks ago, and it was part of a larger transaction that included a 509,614-square-foot regional shopping center in San Jose, CA, acquired by Cole for $203 million.

 Image courtesy of Macfarlan Capital Partners

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