The retail town center at Atlantic Station has been sold.
North American Properties and CBRE Global Investors sold the main cluster of shops and restaurants to an investment fund tied to Morgan Stanley, two people with knowledge of the situation said. Houston-based real estate and investment services firm Hines Interests will manage and operate the center.
Atlantic Station, a mix of retail, residential and high-rise office buildings just west of the Downtown Connector, is one of metro Atlanta’s most visible projects. It also has a hotel and an IKEA store and hosts events such as an annual pro tennis tournament and Cirque du Soleil shows.
The property has rebounded since the recession, adding dozens of new stores and restaurants and improving a reputation that took a hit during the downturn. Retail occupancy is up to 92 percent from 70 percent five years ago, and the property has become one of Atlanta’s top performing retail hubs.
The property sold does not include buildings occupied by Publix, Dillard’s, Target and IKEA, nor the office towers or hotel on site.
North American and CBRE Global acquired the town center, certain office space and land for future development at Atlantic Station for $173 million in late 2010.
The firms set about filling empty retail spaces and vacant floors of office towers. They targeted local restaurants and high-end merchants for the retail space and creative and technology firms for the office buildings.
At the time of the 2010 acquisition, the 586,000-square-foot retail core was valued at about $80 million. The sale this time was valued at about $200 million, the people said.
Separately, CBRE Global Investors has listed land for future development for sale.
Hines currently has plans to develop a mid-rise office building geared toward creative companies along 17th Street. The company has also ramped up its retail portfolio.
Population growth in Midtown and a surge of new creative companies have made Atlantic Station an appealing target.
“We are already active and dedicated to the Midtown Atlanta submarket, and we look forward to continue positioning Atlantic Station as the model for experiential, mixed-use communities,” Kurt Hartman, senior managing director in the Southeast for Hines, said in a news release.
Noted Atlanta developer Jim Jacoby turned a polluted steel mill into Atlantic Station, and it remains among the nation’s more ambitious brownfield redevelopments.
But amid the downturn, Jacoby’s financial backer in the venture, AIG Global Real Estate Investment Corp., was forced to sell its holdings.
The community also was dogged by a perception of petty crime and as a rowdy cruising and party zone, before the North American team, led by Mark Toro, led a turnarond plan.
“When we took over five years ago, our team instituted a strategy to stabilize, re-merchandise and repopulate Atlantic Station’s retail core,” said Toro, managing partner for North American. “A new code-of-conduct, 34 leases and hundreds of community events later, we are proud to put Town Center at Atlantic Station in the very capable hands of Hines.”
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