Hartz Mountain Industries Acquires North Atlanta Distribution Portfolio for $129M

By Keith Loria, Contributing Editor

An entity controlled by Hartz Mountain Industries has acquired Peachtree Corners and Kennestone Corners, a 2.5-million-square-foot North Atlanta distribution portfolio of Class B industrial centers, from Clarion Partners for $129 million.

CBRE’s New York Institutional Properties team represented the buyer in the transaction, while CBRE’s National Partners team represented the seller.

“[Hartz Mountain Industries] is acquiring a lot of office and converting it into industrial, which they have a lot of background in and the real appeal is that this is a Class B portfolio in an A+ location,” Jeffrey Dunne, CBRE’s vice chairman, told Commercial Property Executive. “They love the location and that’s what drove the deal.”

Located in Atlanta’s historically low-vacancy industrial market, the portfolio is situated in an area of 5.3 million residents, the busiest passenger airport in the world and the South’s largest highway system. Additionally, Peachtree Corners and Kennestone Corners provide tenants access to Atlanta’s three major interstates and two railroads, each with major intermodal facilities.

“I think Atlanta was one of the markets that took longer to recover, but it’s recovering very, very fast in terms of rental growth and occupancy growth,” Dunne said. “That was compelling to Hartz.”

Figures released by CBRE reveal Atlanta’s industrial market led the nation in first quarter of  2014 with 4.4 million square feet of positive net space absorption. The portfolio’s I-85 NE and I-75 NW submarket held an impressive 7.9 percent vacancy.

According to Dunne, Hartz Mountain’s purchase follows its current investment strategy of acquiring high-quality, stable industrial assets in first-tier markets across the United States.

“Similar to our holdings in North Jersey and Baltimore, Atlanta’s industrial district is ideally located minutes from major road arteries and within a vibrant residential market,” Emanuel Stern, Hartz Mountain Industries’ president & COO, said in a company statement. “We also found it appealing that there is not a lot of space for new development, limiting competition and increases the value for already-existing buildings.”

The portfolio was well maintained and operated by Clarion Partners, so no immediate renovations are planned.