Beacon acquires 150k s/f class A office from Cabot Properties for $16.5 million

7100 Highlands Parkway, a single-story 150,000 s/f class A office building built exclusively for IBM Corp., as its Atlanta call center, has been acquired by Beacon Investment Properties, LLC of Hallandale Beach, FL from Cabot Properties, Inc., Boston, for $16.5 million. The contemporary, rectangular office building located at 7100 Highlands Parkway in suburban Smyrna, is 100% leased to IBM through December, 2017. Constructed in 1997, it is deemed an architectural landmark in the Northwest Atlanta submarket. The steel and glass structure has 26-foot domed sky-lit ceilings, a see-through reception lobby, vast open office space plan and the familiar blue and white IBM corporate color scheme. Atlantans are wedded to their automobile, so the developer created 1,054 surface parking spaces for a parking ratio of seven spaces per 1000 s/f. The property also has a class A location, less than a quarter mile access to I-285, two miles from I-75, some 7.5 miles northwest of downtown Atlanta, 7.5 miles southwest of Buckhead and 15 minutes from Hartsfield -Jackson Atlanta International Airport. "7100 Highlands Parkway is a perfect fit with Beacon's philosophy of acquiring distinctive or iconic Class A office buildings with histories of strong occupancies in major cities at prices well below today's replacement costs," said Paul Gaines, director of asset management in Beacon's Atlanta office. Gaines said 7100 Highland Parkway is Beacon's second acquisition in Atlanta in less than a year and that the firm is "looking for more class A office properties here to grow our presence in this market." Tom Shafer, executive vice president with CBRE's Atlanta office, represented the seller. "The size of this building, its timeless design and high 7 to 1000 parking ratio really differentiates it from its competitors in this submarket," he said. "It would be economically impossible to replace it at today's costs." Shafer added that Beacon Investment Properties, LLC was the "ideal buyer" for the office building. "They did an exceptional job of telling us what they were going to do, doing it and then closing on time and at the contract price with no retrading," he added. "Beacon performed very efficiently." Financing was arranged by Susan Hill, senior managing director for HHF in Houston, who secured a $12,375,000 ten-year-loan, interest only for the first 12 months and a 24-year amortization from a major U.S. insurance company. "The lender recognized the strength of the anchor tenant and class A location of 7100 Highlands Parkway and was able to bring to the table the most competitive rate and term for a smooth close," said Hill. Andrew Ebbott, executive vice president and chief investment officer for Cabot Properties, Inc., a Boston-headquartered private equity fund, said 7100 Highlands Parkway was sold "because we realized the investment returns we targeted for this property and thought it was a good time to put it on the market."