Jamestown, the property developer behind Ponce City Market and landlord of several other prominent mixed-use projects in the city, is acquiring the Atlanta office of one of its chief competitors: North American Properties.
Upon closing, Colony Square in Midtown, Avenue East Cobb in Marietta and The Forum Peachtree Corners, among three other NAP-owned projects outside of Atlanta, will become part of Jamestown’s portfolio. Jamestown will also manage Avalon in Alpharetta, a live-work-play megadevelopment owned by a separate real estate firm, and two properties in Florida and New Jersey, according to a Tuesday announcement.
The acquisition expands Jamestown’s footprint farther into the Atlanta suburbs, where NAP has long been an owner and operator of prominent real estate projects, and allows both firms to combine their decades’ worth of development experience.
It also adds another high-profile intown mixed-use project to Jamestown’s portfolio, which includes the Buckhead Village District, Westside Provisions District and Ponce.
Discussions over joining forces began more than a year ago, said Jamestown CEO Matt Bronfman. Jamestown and NAP have a similar ethos: creating destinations and community centers with a sense of place. Both have a track record of transforming struggling or sleepy properties into vibrant mixed-use districts: the former in cities, the latter mostly in the suburbs.
Over a decade ago, NAP jolted a retail project in Alpharetta that stalled during the Great Recession back to life, transforming more than 80 acres of abandoned land into Avalon, a mixed-use development with high-end retail, restaurants, office space and homes. Avalon is now a model for successful mixed-use development across the country.
Around the same time NAP began the Alpharetta project, Jamestown laid the groundwork to turn a hulking former Sears warehouse along Ponce de Leon Avenue into a retail and residential destination. Receiving both federal and state tax incentives to renovate the historic building, Jamestown turned the building into a marquee along the Atlanta Beltline that some estimate is worth more than $1 billion.
“Combining together gives us scale. We’re complimentary to investors, tenants and market forces. There aren’t that many people that do what we do,” said Bronfman.
Rick Porter, the director of Georgia Tech’s Master of Real Estate Development program, says two of Atlanta’s largest real estate firms combining forces makes sense in today’s real estate environment. They’re stronger together.
“Attracting equity and commercial debt remains challenging. To see a very large acquisition like this, with companies that have a very big appetite for capital, it makes sense,” Porter said. “You need a lot of skills to be able to go to investors and attract capital because there are lot of dynamics in the marketplace between cost or interest rates.”
NAP established its Atlanta office in 1996. As of June, it has $2 billion in assets under management. Upon closing, the Atlanta subsidiary will move forward under the Jamestown name, and its 200 employees will carry over to the combined firm. The managing partner of NAP’s Atlanta office, Tim Perry, will join Jamestown’s executive team as a managing director and co-chief investment officer, according to the announcement.
“To put together the talent of these two organizations is really setting a new standard for experiential [retail] and place-making,” Perry said.
The larger NAP real estate firm will continue to own, operate and manage real estate through its other affiliates, and will remain an investor in the six properties owned by the Atlanta office.
The deal is expected to close in the fourth quarter of this year, pending approval from lenders and investors. Financial terms of the deal were not disclosed. NAP also operates offices in Cincinnati, Dallas and both Ft. Meyers and Melbourne, Florida. Those offices are not part of the transaction announced Tuesday.
