Affiliates of Wyatt Capital, LLC (“Wyatt”) acquired 3333 Riverwood Parkway (“3333”) in October of 2018 for $15.84 MM in an off market transaction with Colony Capital (“Colony”).
3333 is a very high quality boutique Class A office building totaling 107,000 sf in the heart of the Cumberland office submarket in metro Atlanta. The building was originally developed by Holder Properties/Holder Construction (“Holder”) for its own occupancy in 1992 and includes very high end finishes rarely seen in a building of its size. Colony acquired the building from Holder in 2010 and had spent approximately $1 MM to update the common areas throughout the building immediately prior to Wyatt’s purchase. The building was 30% occupied at acquisition. Wyatt promptly engaged an aggressive leasing campaign and base building improvement program exceeding $1 MM to enhance the property for existing and future tenants including painting the exterior of the building and parking deck, addition of a new fitness center, new locker rooms with showers, a new conference center, addition of a high quality outdoor patio/meeting area, and a renovated lobby and other common area improvements including new art, light fixtures, lobby furniture, etc.
Ownership refinanced the debt capital within 12 months of acquisition as a result of a favorable leasing campaign which increased occupancy to 70% and allowed for a 200 basis point reduction in the cost of the 3333 debt. Wyatt proceeded to lease the balance of the vacancy to 90% by late 2019 and to 97% by late 2020 to secure long term credit tenants which positioned the asset to be sold at premium pricing.
The asset was taken to market in spring 2021 and was sold in August 2021 to an out of state institutional investor for $34.2 MM.
Annualized project level returns for this investment were 24.7% with an equity multiple of 2.25X for the 34 month hold period.