By MAURA WEBBER SADOVI
Despite growing signs of a broad commercial real-estate recovery, it remains a buyer's market in many parts of the country.
Take the recent sale of several pieces of the high-profile Atlanta development known as Atlantic Station. The properties were located in the huge and partially completed 138-acre project planned on a former steel-mill site in Midtown Atlanta that has been billed as one of the country's most ambitious mixed-use developments.
Now, about a decade after construction on the project got underway, its former master developer, American International Group Inc., last month fetched just $165 million for a 534,000-square-foot office building, the 586,000-square-foot Atlantic Town Center retail complex, a parking garage and 14.3 acres of undeveloped land, according to Real Capital Analytics Inc., a New York real-estate research firm.
The buyer was a fund managed by CB Richard Ellis Investors. Vance Maddocks, president of the fund series, declined to disclose the price but estimates that he paid less than half of the cost to construct the properties.
The deal comes among early signs that investor interest in cities like New York and Washington is beginning to spill over into secondary markets...
...The 25-story office building is only 40% occupied. Since its completion in 2009, it has struggled to compete for tenants in a fiercely competitive market where the third-quarter office-vacancy rate of 20.8% hovered near a 25-year high, according to Reis Inc., a real-estate research firm. The retail complex is about 88% leased, although Mr. Maddocks says there are a number of expiring leases and some of the tenants aren't paying rent.
"That someone is willing to shell out this kind of money is certainly not bad news, but I'm not sure it implies any blessing on the Atlanta market," says Ben Carlos Thypin, a senior market analyst with Real Capital. "There's still a lot of pain."...
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