Getting Close

Koger Equity Inc. has signed a definitive agreement with Ravinia Three Associates LP to acquire Three Ravinia Drive, an 805,972-square-foot office building located in Atlanta's Central Perimeter submarket, for $125 million in cash. Three Ravinia, completed in 1991, is a 31-story, 431-ft tall, Class-A trophy office building designed by the noted architectural firm of Roche, Dinkeloo & Associates and developed by Hines Interests LP. The building is located on the northeast corner of Ashford-Dunwoody Road and I-285 in DeKalb County in suburban North Atlanta. It is the largest metropolitan office building north of Midtown Atlanta and the tallest building in DeKalb County. Three Ravinia shares the 42 wooded-acre Ravinia Office Park with the 500-room Crowne Plaza Ravinia Hotel and two other office buildings, One and Two Ravinia Drive. The building features functional and energy efficient 25,000-square-foot floor plates, a state-of-the-art fiber optic Internet backbone, a tropical conservatory, 2,515 adjacent covered parking spaces and convenient access to both the Dunwoody MARTA rapid rail system and Perimeter Mall. "Three Ravinia is a trophy suburban office tower located at the epicenter of one of Atlanta's most important and renowned submarkets, Central Perimeter," said Tom Crocker, CEO of Koger Equity. "The purchase of this landmark, Class-A asset is consistent with our corporate repositioning program, which began with the divestiture of select non-core assets at the end of last year... [and] its commitment to reinvesting in opportunities with higher growth." Crocker added, "We continue to believe that in the current suburban office markets of the Southeast and Southwest there are opportunities to invest in assets which we anticipate will yield significant returns for our shareholders." The purchase price represents a cost of approximately $155 per rentable square foot, a significant discount to current estimated reproduction costs, which would exceed $200 per rentable square foot. MCI, formerly the building's second largest tenant, vacated 315,000 square feet as of September 30, 2001, leaving Three Ravinia 57% leased. Koger anticipates that the investment will stabilize at an overall return consistent with ground up development without the commensurate construction and leasing risk. Randy Evans of Eastdil Realty Co. is representing the seller, Ravinia Three Associates LP. Tom Brockwell is representing his company, Koger, and hopes to have the deal closed in February.