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Atlanta Investor Acquires Large Portfolio from Piedmont Office Realty Trust

Bridge Office Adds 2.2 Million SF in Markets from Atlanta to Arizona
January 8, 2018
Pictured: Piedmont Pointe I in Bethesda, MD.

An Atlanta-based subsidiary of Utah's Bridge Investment Group is making a major statement with the acquisition of more than a dozen office properties in eight markets across the United States.

Bridge Office Fund Manager, led by Atlanta native Jeff Shaw, confirmed Monday it is the buyer of the 13-building portfolio from affiliates of Piedmont Office Realty Trust, a REIT based in the Atlanta suburb of Johns Creek, GA. The acquisition of the 13th property, 2001 NW 64th St. in Fort Lauderdale, FL, won't close for about 10 days.

Bridge Office did not disclose terms of the Jan. 3 transaction, but Piedmont previously said the minimum agreed-to price was $425.9 million. However, that number included a 14th office property at 2120 West End Ave. in Nashville that was acquired by another company.

The office properties, comprising more than 2.2 million square feet, are located in the suburban markets of Atlanta, Boston, Chicago, Nashville, Phoenix, Washington, D.C. and Detroit, as well as in South Florida. The properties have upside potential for Bridge Office because the portfolio has a combined vacancy level of 24%.

"The excellent locations, cost of living, quality lifestyle, steady job growth and the talented labor pools of these markets make the properties appealing to office tenants," said Shaw, a Bridge Office principal and CEO of Bridge Commercial Real Estate of metro Atlanta. "These properties are directly in line with the Bridge Office urban-suburban investment strategy of acquiring into prime business centers of healthy cities around the U.S."

With the acquisition, Bridge Office now owns more than 9 million square feet of office in 69 buildings across 15 states.

In November 2017, Piedmont REIT said it had reached an agreement with unidentified buyers for what was then marketed as a 14-building portfolio. For Piedmont, the sale to Bridge means it has exited four markets: Detroit, Nashville, South Florida and Phoenix.

"As we've indicated before, we believe that being a net seller today is the right thing to do at this point in the cycle," Piedmont CFO Robert Bowers told analysts in November.

But Bridge says it's a time to invest. "Bridge believes with a stable and diverse roster of tenants, several long-term commitments from investment grade companies and the implementation of the company's 'roll-up-our-sleeves' ownership style, we will create tremendous value for both the tenants and our investors," said John Ward, CIO of Bridge Office.

The properties Bridge acquired from Piedmont are: Desert Canyon 300, Phoenix; Windy Point I and Windy Point II, Schaumburg, IL; 2300 Cabot Dr. Lisle, IL; 1075 W. Entrance Dr. and Auburn Hills Corporate Center, Auburn Hills, MI; 5301 Brentville, TN; Suwanee Gateway One, Suwanee, GA; 5601 Hiatus Rd., Tamarac, FL; Piedmont Point I and Piedmont Point II, Bethesda, MD; and 1200 Crown Colony Dr., Quincy, MA.

For more information on the transaction, please see CoStar COMP #4101475.

Tony Wilbert, Atlanta Market Reporter  CoStar Group   

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