$300M project for Cumberland

By JILL LERNER FRIEDMAN
The Atlanta Business Chronicle
Published on: 05/18/07

Two prominent developers are planning a $300 million mixed-use project near Cumberland Mall — the realization, after more than 20 years, of another company’s vision.

Bob Voyles’ Seven Oaks Company LLC and GE Asset Management have formed a joint venture to reassemble Riverwood — a project first conceived in the mid-1980s by Portman Barry, the company run by famed architect John Portman and developer Hal Barry.

The project is less than a quarter-mile from the reinvigorated Cumberland Mall and the new Cobb Energy Performing Arts Centre.

The updated master plan calls for nearly 2 million square feet of office, retail, condo and hotel offerings on 22 acres off Cumberland Boulevard.

Portman Barry’s original concept in the mid-1980s called for 2.5 million square feet of development on 30 acres. Riverwood 100 was completed in 1989, however, the project fell victim to the real estate recession and land parcels were sold off in the early 1990s.

Regent Partners LLC bought the land, retained part of the site and sold off other parcels.

Now, GE and Seven Oaks have reassembled 22 acres of the original tract.

“Every time I used to see [the master plan], I thought, ‘Boy, wouldn’t it be great if you could put it all back together,’ ” said Voyles.

“We thought there would be an opportunity to reassemble these parcels — in essence, take the best of the old Portman Barry design and have it re-engineered for the 21st century.”

Added Jerry Karr, managing director of GE Asset Management, “We plan to make Riverwood a landmark in the Atlanta metro community.”

In addition to the existing Riverwood 100, a 505,000-square-foot office building constructed in 1989, the new master plan calls for an additional 530,000 square feet of class A office, 90,000 square feet of retail, 360 condos and 40 lofts; and a 200-room, three-star business-class hotel. HOK is project architect, Wakefield Beasley & Associates Architects Inc. will design the retail spaces, Roy Ashley & Associates Inc. is landscape architect and Lorenc+Yoo Design will create the graphics and hardscapes — elements of the landscape other than plants, such as walkways.

The first office building planned is a 15-story, 350,000-square-foot tower, Riverwood 200, that will be a “close cousin” in style to Riverwood 100, Voyles said.

Seven Oaks also plans to begin immediate development of the retail and residential portions of the property responding to the “strong level of interest” by restaurants and residential builders, Voyles said.

The developers plan to begin construction in mid-2008.

Sam Olens, chairman of the Cobb County Board of Commissioners, called Riverwood one of the “great unfinished development opportunities” in Cobb County.

“For years, I’ve driven by that property and thought about what it could be. But I have to say, the wait has been well worth it,” he said.

Seven Oaks is run by Voyles, former senior development officer for Hines and before that, a partner at Alston & Bird LLP.

He and GE’s Karr formed a friendship during a 10-year collaboration when Voyles was at Hines. The pair worked closely together during the development of Perimeter Summit, and Karr’s GE Asset Management advised a GE Pension Trust affiliate in its purchase of the Hines-developed 1180 Peachtree.

Late last year, GE Pension Trust, advised by GE Asset Management and Seven Oaks, bought Riverwood 100 from ING Clarion for $102.8 million, or about $204 per square foot.

Voyles said it would cost more than $300 per square foot to replicate the structure today.

Karr, who credited Seven Oaks with the idea to reassemble Riverwood, said GE Asset Management had looked at several properties in the submarket before deciding to buy the tower.

He added that entering the market was a “strategic goal” of his company, citing highway access and the northwest submarket’s reputation as a place where “an awful lot of senior business people have made their homes.”

After the purchase, Seven Oaks immediately began working to assemble the remaining tracts owned by Walton Communities and Regent Partners, and closed on the purchases by mid-May.

Riverwood 100, which is about 85 percent leased, commands some of the highest rents in the Cumberland submarket, according to Randy Berger, senior market analyst with real estate information company The Dorey Cos. Riverwood 100’s quoted annual rental rate is $24.50 per square foot.

“This building is so far beyond the market that we could use that to build a brand for a class A project for the new market,” said Voyles.

And that market appears to be heating up.

The vacancy rate for the Cumberland submarket is at 21.3 percent, which is the lowest it has been since 2002, said Berger.