Piedmont Buys Galleria Office Towers, Consolidates Position
Zacks Investment Research | Aug 27, 2019 08:33AM ET
Piedmont Office Realty Trust, Inc. (NYSE:PDM) recently announced acquisition of the remaining Atlanta Galleria office towers. Particularly, the company purchased two office towers — Galleria 400 and Galleria 600 — aggregating around 860,000 square feet and a neighboring 10.2 acre land parcel that is entitled for one million square feet of additional development.
The company has shelled out $231.2 million in total for these buyouts, which strengthens its position in The Galleria, which is a master-planned, mixed-use development in northwest Atlanta, enjoying visibility from I-75 and I-285.
Notably, Piedmont has made concerted efforts, over the years, to gain a strong foothold in the growing Northwest Atlanta submarket. The company has accumulated 2.1 million square feet of office space across five buildings together with three development sites since 2015 in The Galleria. Its total investment in The Galleria is just under $500 million.
The acquisition in the master-planned, mixed-use development is in sync with the company’s strategy of increasing premium, amenitized assets in dense, walkable surroundings. The Galleria includes office, multi-family and retail, as well as a four-star hotel, the Cobb-Galleria Convention Center and the Cobb Energy Performing Arts Centre. Also, it provides direct access to The Battery, the mixed-use center that includes SunTrust Park, 4,000-seat Coca-Cola (NYSE:KO) Roxy Theater, and more than 500,000 square feet of dining and entertainment options.
Notably, mixed-use developments have gained immense popularity in recent years. Such developments lower the distance between housing, workplaces, retail businesses, and other amenities and destinations. Hence, such developments enable companies to grab the attention of people who prefer to live, work and play in the same area — a trend that drove development in several other cities in the United States. As such, strategic acquisitions in such a mixed-use development will likely ensure steady demand for Piedmont’s properties. Nevertheless, with comparatively higher levels of new supply in the overall office market, there is likely to be a greater balance, in the upcoming period.
Moreover, shares of this Zacks Rank #4 (Sell) company has declined 2.2% over the past three months, while its Zacks Investment Research
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