This Week's Atlanta Deal Sheet
An e-commerce fulfillment company has taken nearly a million square feet at Gillem Logistics Center.
Spreetail leased 910K SF at Building 1100 at 200 Metcalf Road Extension inside the industrial park located in Forest Park, according to a press release. The building is currently under construction and is set to deliver this quarter, making it the latest distribution facility to rise on the 1,170-acre master-planned industrial campus that was formerly a U.S. Army fort.
Cushman & Wakefield managing directors Ray Stache and Pat Murphy represented the landlord of Building 1100, TA Realty. Cushman & Wakefield Senior Director Lisa Pittman and Vice Chairman Adam Campbell represented Spreetail, according to the release.
“Building 1100 is a strategic location for Spreetail’s aggressive growth plans, and this park offers excellent access to metro Atlanta’s growing population as well as an amplified southeastern reach,” Campbell said in the release.
The deal is one of the largest so far in 2022, and it comes at a time when leasing activity has slowed across the region, with 2.3M SF of net absorption during the first quarter, according to a recent CBRE report. That's down from more than 10M during the same period in 2021, which put Atlanta at the top in the U.S. for industrial absorption, Colliers previously reported.
The slowdown had little to do with slackening tenant demand, especially coming off a record year for industrial landlords in Atlanta, according to CBRE. Developers delivered nearly 10M SF of new industrial space in the first quarter and are underway with 30.4M SF more, according to CBRE.
But tenants are grabbing space even before the projects are completed: More than 40% of the absorption that occurred in the first quarter was inked in freshly delivered warehouses or facilities still under construction, according to Cushman & Wakefield. That has industrial building owners in the driver's seat, with landlords hesitating to pre-lease space as rental rates continue to climb, according to CBRE.
Asking rents for industrial space jumped 34% to $6.59 per SF in the first quarter compared to the same period in 2021, according to Cushman & Wakefield. For the first time ever, landlords throughout Metro Atlanta are commanding more than $4 per SF, the report said.
DEVELOPMENTS
Ecopol, an Italian water-soluble filmmaker, is planning to establish a new manufacturing plant and North American headquarters in Spalding County, 40 miles south of Downtown Atlanta, Gov. Brian Kemp announced this week. The company plans to invest more than $38M and create 130 new jobs at The Lakes at Green Valley, a planned 570-acre, ecologically friendly mixed-use project by the Griffin-Spalding Development Authority.
According to the authority, all development in the park must achieve an eco-rating for sustainable construction designed by the Development Authority and Georgia Tech.
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A company is planning to build what it claims will be the largest North American spa in Forsyth County. Passport Springs & Spa announced this week that it plans a 40K SF spa adjacent to the Collection in South Forsyth lifestyle shopping center at Georgia 141 and Ronald Reagan Boulevard. The firm, headed by 25-year-old Passport Experiences CEO Jacob Bloch, plans to create four hot springs spa pavilions inspired by locations in Costa Rica, Rome, Israel and Japan, according to a press release.
The 10-acre project is expected to include 150K SF of outdoor space, the largest man-made flotation pool in the world, mud pools, 25 thermal mineral pools, a restaurant and a subterranean cave network that will feature snow, steam, sauna and salt rooms.
The spa is scheduled to open in the fall of 2023, although no construction financing or capital partners have been announced.
“Across the globe, hot springs resorts are sought-after destinations for socializing, wellness and escaping the routine. Passport is unveiling this upscale venue, which is globally unprecedented, with the sophistication of Atlanta in mind,” Bloch said in the release.
PERSONNEL
Franklin Street has tapped a former corporate real estate executive with Equifax to grow its office leasing business in Metro Atlanta. The firm hired Laura Stephens as the senior director of corporate occupier accounts. Prior to joining Franklin Street, Stephens was senior global director of real estate for Equifax and spent nine years at Cushman & Wakefield.
LEASES
Chattanooga-based Kenco Group, a third-party logistics company, leased nearly 290K SF at the Rockdale 20 Distribution Center in Conyers for its operations. Hillwood, which developed it late last year, owns the facility that is off Old Covington Highway and less than a mile from Interstate 20. According to a press release, Kenco signed the lease prior to its completion. Lincoln Property Co. Senior Vice President Denton Shamburger and leasing associates Turner Fortin and Colin Beecham represented Hillwood.
FINANCE
Drapac Capital Partners has refinanced a $9.46M loan for the Atlanta Humane Society's former facility in West Midtown at 981 Howell Mill Road. Under the LLC of 981 Howell Mill — registered to Drapac, according to a database with the Georgia Secretary of State — Drapac paid D.C.-based Fundrise Income eREIT V back on the principal and interest on the loan by refinancing with another bank March 1, according to a filing with the Securities and Exchange Commission.
According to the SEC filing, Drapac rezoned the property for 450 rental units and two commercial towers that could become a hotel, condominium or office. Drapac purchased the 2.2-acre site from the Humane Society in 2020 for $11M, the Atlanta Business Chronicle previously reported.
