Real Estate Notes

Gentiva Health Services picks JLL as broker

Atlanta Business Chronicle – by Douglas Sams
Date: Thursday, November 4, 2010, 2:53pm EDT

Atlanta-based Gentiva Health Services Inc. (Nasdaq: GTIV) is going to enter the market for a new lease, according to sources familiar with the matter.

Gentiva, the nation’s largest provider of comprehensive home health and hospice services, picked Jones Lang LaSalle Inc. as its broker. The company has about 50,000 square feet in Riverwood 100, according to CoStar Group.

Gentiva’s lease is not up until 2012 and it may be next year before any serious negotiating begins.

Gentiva is expanding, acquiring Odyssey HealthCare Inc. (Nasdaq: ODSY) (“Odyssey”) in August, creating the largest U.S. health-care provider of home health and hospice services, based on revenue, the company said.

Riverwood 100 is a 23-story office tower on Cumberland Boulevard, developed by Seven Oaks Co., a development company founded by Atlanta’s Bob Voyles.

Riverwood 100 is one of the signature buildings in the northwest Atlanta office market, where vacancy has climbed to 24 percent.

Gentiva should find plenty of building owners willing to dole out incentives to relocate, based on the high vacancy and dearth of job demand.

However, Seven Oaks and CB Richard Ellis Inc. have had success in the past year of locking up tenants to renewals, including Hewitt Associates Inc.

When completed last year, the 142,000-square-foot Hewitt transaction was the largest renewal in the Cumberland office market.

“We will work with their broker to structure a deal that is good for both them and building ownership, just as our team did successfully this year and in the past for our other expiring tenants,” Voyles said.

Locking in

Eola Capital LLC recently inked E-Trade Financial through 2018 at 100 Windward Plaza.

E-Trade Financial renewed two years early, signing a deal for 132,250 square feet. The company leases the entire building.

Eola’s Candy McIntyre represented ownership in the negotiations. Kevin Carroll, with CB Richard Ellis Inc., brokered the deal for E-Trade Financial.

Eola acquired 100 Windward Plaza three years ago after it won the bid for The St. Joe Co.’s (NYSE: JOE) southeastern U.S. office holdings. Eola paid $383 million.

The pressure is on building owners to lock up corporate tenants, given deals the companies can find in the market, the large amount of empty office space, some 31 million square feet across metro Atlanta, in fact, and weak demand for office space.

North Fulton has a vacancy rate hovering near 19 percent, according to Jones Lang LaSalle.

A tenant the size of E-Trade, committing to a six-year deal, might typically receive $30 per square foot in concessions, including free rent and tenant improvement allowances, commercial real estate insiders said. Eola might also have knocked a few dollars off the rent annually to lock E-Trade.

Eola and CB Richard Ellis could not comment on the transaction.

Rising star

Medical Neurogenetics LLC, a rising star in diagnosis and treatment of rare diseases, is expanding.

An affiliate of an Atlanta medical research company, Shoffland Holdings LLC, recently bought 5424 Glenridge Drive, the former home of Jas Forwarding USA Inc.

It paid $4.25 million, according to Databank Inc.

Medical Neurogenetics will use the Glenridge building for clinical labs and office space.

The two-year-old company has outgrown its building at Dunwoody Park, and wanted to put two labs under one roof.

Dr. John Shoffner, Keith Hyland, Lauren Collier Hyams and Maureen Starnes are the men and women behind Medical Neurogenetics, a company whose work in diagnosing mysterious and difficult-to-treat diseases has brought it national media attention from the likes of TIME magazine.

The company will move into the Glenridge building after the new year.

The Ben Carter Properties LLC team of Jill Goldberg, Candice Flig and Sharon Altenbach represented the owner of the building in the transaction.

Jim Gray with Crye-Lieke represented Medical Neurogenetics affiliate Shoffland Holdings LLC.

Selling out

There is another sign of improving health for the intown Atlanta condo market.

Developer Urban Realty Partners recently sold out the final units at its Midtown condo, The Reynolds on Peachtree. It reached the milestone in September, and took steep price cuts to do so.

Urban Realty Partners slashed prices more than 30 percent for some two-bedroom condos, from $450,000 to $284,000.

The Reynolds is a 130-unit condo at the northeast corner of Peachtree Street and Linden Avenue, completed in 2006.

Originally, Urban Realty Partners priced the building’s units from the $200,000s to $500,000s.

As late as 2009, the building was 60 percent sold or under reservation.

However, once sales stalled amid the Great Recession and slow recovery, Urban Realty Partners hired The Marketing Directors, which closed out the remaining 59 homes.

The firm has used similar, effective sales strategies at other Atlanta towers during the dramatic resetting of intown condo prices that unfolded during the past year.

AmTrust buy HQ building

AtheroGenics Inc.’s former building is now in the hands of a large property and casualty insurer.

AmTrust International Insurance, a subsidiary of AmTrust Financial Services Inc. (NYSE: AFSI) bought the 51,035-square-foot building for $3.2 million, or $63 a square foot, according to Databank Inc.

AmTrust International will likely use the building for a consolidation, sources familiar with the purchase said.

Atlanta developer Cousins Properties Inc. carried out the build-to-suit headquarters building for AtheroGenics, once a darling of the state’s biotech industry.

However the drug-maker filed bankruptcy and entered an asset-purchase agreement with Crabtree Acquisition Co. LLC, enabling Crabtree to buy all of the company’s non-cash assets.

AtheroGenics’ lease within the Alpharetta building expired in 2009.

AtheroGenics focused on the treatment of chronic inflammatory diseases.

Tower walk’s new leasing team

Big changes may soon be in store for Tower Walk, the mix of restaurants and small shops anchored by the AMC Fork & Screen Buckhead.

Retail brokerage The Shopping Center Group LLC has taken over the leasing assignment for Tower Walk, which has been hit hard by the economy, losing the nearly 60,000-square-foot Crunch Fitness and smaller tenants.

Crunch Fitness International Inc. entered Chapter 11 bankruptcy in 2009 and closed its Tower Walk gym.

Tower Walk has about 165,000 square feet of retail space, but more than half is vacant. Filling the gap created by Crunch’s departure is the first priority, said Shopping Center Group’s Stephanie McCall, who will lead leasing efforts.

McCall is already speaking to national fitness chains.

The Shopping Center Group is also looking at the possibility of more fast-casual restaurants, as it will have to replace Atlanta Bread Co., once a popular spot for Tower Place office workers.

The restaurant closed earlier this year.

Tower Walk is the retail component of Tower Place, the office complex whose centerpiece is Tower Place 100, the building that launched the Buckhead office market in the 1970s.

McCall will use Buckhead’s national reputation as one of the country’s largest, urban, mixed-use markets, known best for high-end shopping and dining. Another advantage for the Shopping Center Group is the daily foot traffic created by Tower Place’s office workforce.

Besides the theater, Tower Walk also has the popular sushi restaurant Ru San’s and Copeland’s.

Tower Walk is a high-profile assignment for the Shopping Center Group in Buckhead.

It also handles leasing for the retail heart of Atlantic Station, the giant mixed-use development at 17th Street and the Downtown Connector. Tower Walk was formerly leased by Grubb & Ellis Co.

Perry to be honored

REIAC, the Real Estate Investment Advisory Council, and Georgia State University’s J. Mack Robinson College of Business, will honor Egbert Perry as its 2010 Hall of Distinction inductee.

The Dec. 2 event marks the sixth annual Hall of Distinction award, and past recipients have included Wells Real Estate’s Leo Wells III (2009), Barry Real Estate Companies Inc. founder Hal Barry (2008), Selig Enterprises Inc.’s Steve Selig (2007), Novare Group Holding LLC’s Jim Borders (2006) and Atlantic Station co-developer Jim Jacoby (2005).

Perry was a pioneer in Atlanta’s urban development, including the replacement of the dilapidated and crime-ridden Techwood Homes, where he built the new Centennial Place.

Perry has chaired several major civic initiatives and served on the boards of directors of Fannie Mae, the Federal Reserve Bank of Atlanta, and Children’s Healthcare of Atlanta, among others.

Going green

On the heels of razing most of the Department of Transportation building on Capitol Square earlier this year, the Georgia Building Authority is working on plans to demolish the archives building.

The projects are clearing the way for more green space near the Capitol.

The Georgia Building Authority has about $3 million set aside for the Archives demolition, or about a third of the total project cost, said Communications Director Katy Pando.

A firm to demolish the building has not been chosen, Pando said.

Georgia Building Authority has preserved the historic portion of the DOT building. The remaining building will be converted into office and meeting space, Pando said.

The DOT building was razed to make room for a 1,335-space parking deck.

“We’re ready to move ahead with it,” Pando said. “ We just need the funding.”

The project is estimated at $30 million.