April 2, 2010

Atlanta Business Chronicle
By Doug Sams

The law firm Thompson Hine LLP is negotiating for a two-floor deal at Tishman Speyer’s Two Alliance Center.

Thompson Hine is considering other buildings, but Two Alliance Center has emerged as a front-runner, according to sources familiar with the deal.

Studley Inc.’s Andy Lechter and Josh Hirsh, along with Tishman Speyer, declined comment.

Thompson Hine would move from One Atlantic Center.

The deal would continue the leasing momentum for Tishman Speyer at Two Alliance, the new 20-story building at Georgia 400 and Lenox Road.

In recent months, Tishman signed deals at Two Alliance Center with Marsh & McLennan Companies Inc. and Turner Construction, and has almost wrapped up a lease with Novelis Inc., an aluminum supplier to bottlers of The Coca-Cola Co.

The transactions, along with the potential Thompson Hine deal, would bring the building to almost 60 percent leased.

An NFL legend, Heisman trophy winner and Texas real estate entrepreneur recently sat down with Atlanta Business Chronicle to talk mergers and the market. Roger Staubach came to Atlanta March 25 for a big event with the Atlanta office of Jones Lang LaSalle Inc.

This July marks two years since the former Dallas Cowboys star sold his real estate company to Jones Lang LaSalle, the international real estate broker, for about $613 million.

At the time, The Staubach Co. had grown into a powerful tenant rep business. It had several potential suitors.

But, Staubach, now executive chairman of the Americas and a director for Jones Lang LaSalle, said he did not want to sell his business.

His company had taken off in the 1980s by representing tenants such as telecommunications giant MCI Inc. Over the years, The Staubach Co. continued to expand, gaining more tenant rep business in the corporate office and industrial sectors.

But, as U.S. corporations kept expanding their global reach, Staubach said his company needed to expand as well.

“I wasn’t comfortable with our international platform,” he said.

The deal with Jones Lang LaSalle gave The Staubach Co. the global reach it needed. It also brought Jones Lang LaSalle the tenant representation business it coveted.

The merger has benefited both sides, allowing Jones Lang LaSalle to win more U.S. market share. It also picked up assignments with companies such as Procter & Gamble and Microsoft Corp.

“We’re involved in a number of strategic decisions that companies are pursuing,” Staubach said.

Still, challenges lie ahead.

Not even Staubach faced as many blitzes as the real estate market has endured since 2008. Declining employment, falling values and a dearth of financing have defined the period.

Staubach said things have improved since last year, but unemployment remains a concern.

“There is definitely a more positive attitude out there, but we need to see more employment,” he said. “Until then, I don’t think anyone is going to be convinced it’s a solid comeback.”

One encouraging sign: the number of big corporate consolidations that are happening in the South, including Atlanta.

Pattillo Construction Co. broke ground March 26 on a new project for Marten Transport Ltd., the last major industrial tract in the nearly 50-year-old Stone Mountain Industrial Park.

Atlanta Business Chronicle first reported March 19 that Marten Transport was relocating employees to the new Stone Mountain facility, bringing potentially up to 550 jobs to DeKalb County.

Pattillo CEO Larry Callahan noted how the park was an initial catalyst for the county’s economic development during the past half-century.

“The project started before the Stone Mountain Freeway was built and before Interstate 285 was completed,” Callahan said. “The addition of freeways encouraged further development. Eventually, 200 buildings have been built in this park amounting to 10 million square feet and an employment base near 10,000 people.”

Marten Transport brings new investment and new jobs to DeKalb County at a time when the metro Atlanta unemployment rate is 10.8 percent.

“While this may be the last big industrial site [in Stone Mountain Industrial Park], we really see Marten participating in a new cycle of investment in this area,” Callahan said.

Medical clinic/pharmacy AbsoluteCARE Inc. is moving from Loehmann’s Plaza to Brookwood Square near Piedmont Hospital.

AbsoluteCARE signed a 10-year lease for 15,589 square feet.

The lease commences in June.

Racemi Corp. has renewed and extended its lease at 360 Interstate North Office Park in Cobb County. Racemi will lease 8,884 square feet.

Colliers International’s Michael Lipton and John Thornton represented the tenants in both deals.

Jeff Fortner of McWhirter Realty represented Coro Realty, owner of Brookwood Square.

Peter Kasian represented owner Tishman Speyer in the Interstate North lease.

Software development business NSE Inc. will lease 4,536 feet on the 36th floor of Midtown’s 1075 Peachtree.

NSE is moving from Alpharetta’s Sanctuary Park. Steve Morgan, a senior vice president with Grubb & Ellis Co., represented NSE. Doug Guedry, vice president of office leasing with Daniel Corp., represented ownership.

TASQ Technology Inc., a unit of First Data Corp., will lease a nearly 270,000-square-foot building at Interstate 75 and Canton Road and move about 350 jobs to the facility.

Alan Clayton, of Jones Lang LaSalle Inc.’s Atlanta office, and Steven Rotter and Scott Panzer of Jones Lang LaSalle’s New York office, represented the tenant.

Household and personal care products maker Colgate-Palmolive Co. could move into its new Lithia Springs location as early as April 2. Colgate-Palmolive signed a 744,331-square-foot lease at Industrial Developments International Inc.’s (IDI) 2501 Rock House Road earlier this year. Bradley Pope and Mike Chambers of NAI Brannen/Goddard LLC represented Colgate-Palmolive. Lisa Ward represented IDI.

Clothing conglomerate Phillips-Van Heusen has been eyeing at least two big industrial buildings in recent weeks for its new 798,000- square-foot distribution center.

A frontrunner to land the deal is ING Clarion Partners LLC, which has a 798,000-square-foot building on Spence Road in Fairburn.

Another contender is AEW Capital Management L.P.’s 850,000-square-foot building in McDonough.

ING Clarion Partners was a part-owner in the McDonough building, but ING and Trammell Crow Co. recently sold the property to AEW Capital for about $15.5 million, or about $18.25 per square foot. The building is on Liberty Industrial Parkway in Henry County.

Phillips-Van Heusen owns Calvin Klein, Arrow and Izod. It also licenses brands such as Geoffrey Beene and Kenneth Cole New York.

AutoTrader lease defined the art of the deal in a difficult market.

When online classified powerhouse AutoTrader.com Inc. signed a deal earlier this year to consolidate five offices into 3003 Perimeter Summit, it culminated the most complex transaction that almost anyone can remember.

Not only was the deal finalized in the worst real estate market since the Great Depression, but the building was also almost fully leased when the idea of moving AutoTrader into 3003 Perimeter Summit began to take shape.

Only 35,000 square feet was available at the time. AutoTrader would need about 400,000.

The seed for the deal was planted in 2008.

That’s when AutoTrader canceled plans to build a new tower, as lending for new development dried up and plans for new projects came to a standstill.

The CB Richard Ellis Inc. team of John Shlesinger, Sam Holmes and Anne Lofye was representing AutoTrader.

Another important step came early last year, when 3003 Perimeter Summit owner GE Pension Trust hired Bob Voyles’ Seven Oaks Co. to represent its Perimeter Summit assets.

Seven Oaks Co. then brought on CB Richard Ellis’ Brad Jancik and Eric Ross. They would work with the Perimeter Summit leasing team of McKittrick Simmons and Randy Holmes.

To pull off the nearly 400,000- square-foot AutoTrader lease would be extremely expensive for GE Pension Trust.

Concessions in the metro Atlanta market have averaged $70 per square foot in tenant improvement allowances and up to two years of free rent on long-term deals.