April 2 – April 8, 2010
Atlanta Business Chronicle
By Doug Sams
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 Ells’ 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.
GE Pension Trust realized several current 3003 tenants would see their leases come to term in the next few years.
It had to decide whether it made more sense to try and renew them or go for the home run with AutoTrader.
The biggest hurdle was arguably the capital required by GE Pension Trust to complete the deal; the company eventually decided to make the investment.
The deal turned into a giant puzzle.
It meant working with 11 existing 3003 tenants to make room for AutoTrader, including Hewitt Associates Inc., which at one time had up to 140,000 square feet. Hewitt eventually consolidated to Seven Oaks’ Riverwood 100.
All the moves paved the way for AutoTrader to lease the entire building and stabilize the asset.
In a market defined by a lack of financing and falling property values, pulling off the AutoTrader deal, “was a terrific feat,” Holmes said.
Shlesinger said the AutoTrader lease was one of the most complex transactions he has ever completed.