SunTrust Building in Downtown Decatur Sells for $7.7 Million
Decatur Metro | January 14, 2014
From Real Estate BizNow…
Essex Point Properties purchased One West Court Square Two, a 13k SF retail center in Downtown Decatur, for $7.7M, or a whopping $589/SF. (Aren’t there supposed to be post holiday sales happening?)
The fully occupied center is leased to SunTrust, Chipotle, Cook’s Warehouse, and Sherlock’s Wine Merchants. (So you can hit up the SunTrust and then have a hell of an afternoon for yourself without ever leaving the parking lot.) Ackerman & Co’s Shea Meddin and Jason Powell (seen here) brokered the sale for the firm, which owned the property.
Photo courtesy of Google Streetview
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That would make a great Trader Joe’s location.
If I’d been the one to buy it, I’d kick out SunTrust and open a single screen movie theater.
Hashtag LotteryDreams.
I’d say there’s probably a zero percent chance anyone paid $7.7 mil to operate a single story retail building in perpetuity. Perhaps we should place bets on when the new owner will exercise their 80′ height limit. I’m thinking sooner rather than later.
Maybe the same included the contents of the vault.
Oops. Sale, not same.
I’m thinking later, rather than sooner. The Chipotle lease was just entered into, and the Suntrust lease is probably pretty long term. I looked at the Essex Point website too, and they seem to be a buy and hold player, not a developer. They own a lot of single story retail in Georgia. I wish it were not so, but they look like long-term, buy and hold and wait for the appreciation investors.
This may be a stupid question, but couldn’t they build up without affecting those leases? Or is that not possible?
Doubt it. They would displace the parking during construction if nothing else. The tenants would go bezerk if you disrupted their business.
Remember this potential project. Bank of America said no.
http://www.decaturmetro.com/2012/09/07/bank-of-america-postpones-new-development-on-commerce-drive/
There are a lot of speculators sitting on downtown property. They are waiting for other people to develop first so they can get the appreciation. The downturn in 2008 killed their dreams for many years, but they are still sitting and waiting. There needs to be a catalyst, and maybe some of these new apartment developments will spur things along.
In a few months they won’t be able to build up without planting a few trees in newly created greenspace if the City Commission gets the tree ordinance is so badly wants.
Maybe, maybe not. There is no way that building cash flows at a $7.7m purchase price. They may buy out the leases. Or either they factored in the carrying costs into the development costs, but that is a lot of money to park when other sites are available elsewhere.
Great point. With only four leases, you would think the purchaser is thinking of making a quick buck, or taking the monthly loss until they can sell to another develop at the maximum price point.
It’s very curious, since the building wouldn’t even cash flow at twice the market rent, and the purchase price is about three times the going rate per square foot for class A space in the most prime Atlanta locations. If this is a long-term play, it’s the buy high strategy. If they are going to buy out leases, and this was like most commercial deals, they either entered into it right after Chipotle came on, or just before. I’d imagine they would have quashed that lease if the intent was to buy out the leases and build up.
And there are plenty of cheaper and better places if build up is the idea: the Decatur First bank location, the Fidelity parking lot, anywhere on Church, the lot next to the Holiday Inn.
I stand corrected. This piqued my curiousity, and if the rental rates in the marketing materials I found online are accurate, this building would cash flow (assuming the purchaser put down at least the standard 20-25% percent, low interest rates, etc.). So, maybe they do plan to hold it for a while.
Interesting digging. Maybe it depends on the definition of “sooner.” I was thinking in the 2-5 year range, but maybe that falls under “later.” Or maybe they really will sit on it. Just hard to believe it makes sense at that price.
I’d say you’re probably correct. Won’t be long before the Artisan will have some new neighbors across the street.
Those parking spaces are gold.
Unless the Artisan has a county commissioner resident who can file a better lawsuit than Kathy Gannon!
Seriously?
You expect the Artisan residents to be looking at a seven-story parking garage on that corner?
The Artisan needs an anchor tenant on the far end to get people walking down Commerce more regularly. Maybe when the adjacent parking lot is built on?
The 176 unit apartment complex planned north of the Artisan has no planned street level retail.
I suspect this may make the units at the north end of the Artisan (currently a real-estate office) more attractive to street-level retail.
Trying to remember if this building was built with enough support to go up further using current building as base?
$589 per sf is more than the $575 per sf that The Shops at Lenox just sold for (next to Lenox Square).
Maybe it was a 1031 exchange? It’s a hell of a corner. Later on they could build upwards. They didn’t buy it to lose $$$.
+1
That is indeed a prime corner.
Also, speculation, not cash flow, drove that purchase. Someone is expecting an upwards trend in Decatur !
Someone needs to figure out the total sq. ft. of the parcel purchased and then do the math on the $7.7. Then factor in the lease values ( or deducts for buyouts) and the value of the improvements (or deducts for demolition) to come up w/ a value. Certain the new owners thinking is complex.
Many of the old structures in Decaturs’ CBD are no where near the value of the dirt they sit on. Therefore you can’t figure the parcels ‘value’ based on current rents or the current building.