Staubach Co. tapped by Hewitt

Atlanta Business Chronicle - July 9, 2004

by Jarred Schenke

An outsourcing company is outsourcing for real estate help.

Illinois-based Hewitt Associates Inc.(NYSE: HEW), a human resources outsourcing firm, has hired The Staubach Co. in Atlanta to represent it in its hunt to possibly replace its office space at Riverwood, according to industry watchers. At least publicly, Hewitt officials admit to being "in discussions" with Staubach for possible representation. Officials with Staubach could not be reached for comment as of press time.

"This is part of a routine procedure to consult with outside consultants," said Kelly Zitlow, a spokesperson for Hewitt. "At this point, it's just kind of looking at all the options and what makes the most sense for Hewitt."

Hewitt's presence in Atlanta has grown twofold since its 2003 merger with Northern Trust Retirement Consulting LLC, a one-time subsidiary of Northern Trust Corp. (Nasdaq: NTRS).

Hewitt occupies about 225,000 square feet at Riverwood 100, a 503,400-square-foot tower in the Cumberland submarket. Its lease there expires in 2006, Zitlow said. Through its acquisition, Hewitt also has a significant chunk of office space -- more than 140,000 square feet -- at Perimeter Summit - 3003 Summit Boulevard in DeKalb County . But that lease has a long way to go -- through 2016, a source familiar with the lease said.

Hewitt's merger with the Northern Trust division, which tallies almost 200 companies as customers, gives the company Northern Trust's lease at Perimeter Summit. Zitlow said Hewitt is exploring all its options, but is very early in the process. "It's all being reviewed at this point," she said. Zitlow said the company expects to announce that it has officially hired a real estate firm soon.

Dean Giordano with Clarion Partners, which owns Riverwood 100, declined to comment for the story.

But John Heagy with Hines Interests L.P., which owns the Perimeter Summit office complex, said Hewitt discussed consolidating all of its offices to the complex.

Heagy said Hines likely would shuffle offices to the Perimeter Summit - 2002 Summit Boulevard building, a sister tower to 3003 Summit Boulevard , but with a lot more available space. The 390,300-square-foot building at 2002 Summit Boulevard has 181,000 square feet available compared with 16,200 square feet at 3003 Summit Boulevard , according to Dorey Market Analysis Group's Web site, www.FirstCLS.com.

Preferential treatment

Two Atlanta real estate veterans have started their own company to help wealthy people buy commercial real estate. Steve Rothschild -- a veteran of Insignia/ESG, the group that has since been consumed by CB Richard Ellis, and The Griffin Co. -- and Stan Sonenshine, formerly with Atlanta-based The Simpson Organization Inc., have pooled their talents and opened Preferred Real Estate Funds LLC. The company started in January.

The goal: Purchase properties in seven Southeastern markets -- including Atlanta -- for high-net-worth individuals, private equity funds and endowments, Rothschild said. For the most part, Preferred's investors want income-producing properties -- typically those with a strong rent roll.

"We'd like to be long-term holders," he said.

So far Preferred does its work deal by deal, meaning Rothschild and Sonenshine don't have a kitty of money to play with outright. "On our investor list that we have relationships with, we have two billionaires," Rothschild said. "[But] no one has pledged tens to hundreds of millions of dollars to us."

Preferred Real Estate Funds searches for small office, retail and flexible industrial properties in Tampa and Orlando , Fla. , Charleston , S.C. , Nashville , Tenn. , Charlotte , N.C. , Columbia , S.C. , and Atlanta between $6 million and $40 million, Rothschild said.

The company has one unidentified small office building in Atlanta under contract as well as two retail properties around the Southeast, Rothschild said. And Preferred also is selling Ellard Village , a 26,500-square-foot retail center, for $6 million to an undisclosed buyer, he said. Rothschild purchased the property last year under his former namesake company for $4.6 million.

Trizec goes Amec

Amec Plc has officially landed at Lakeside Centre. The British engineering firm leased almost 69,000 square feet at Lakeside Centre at 1979 Lakeside Parkway in DeKalb County , consolidating offices from One West Court Square, a 149,200-square-foot building in downtown Decatur , and an office in Alpharetta, said Mitch Kahlert with ICON Commercial Interests LLC. Kahlert with ICON, as well as Leslie Claxton with Trizec Properties Inc. (NYSE: TRZ) brokered the deal.

Amec signed a 12-year lease at the building, Kahlert said. Atlanta Business Chronicle was the first to report a deal was pending between Amec and Lakeside Centre.

Trizec also snagged two other offices leases on its properties:

Bovis Lend Lease, a project and construction management firm, renewed 24,300 square feet for 5.5 years at Palisades -- Building D on Peachtree-Dunwoody Road in the Perimeter area. Monty Harris with Newmark Southern Region LLC and Sam Zelony with Trizec brokered the deal.

Infinity Broadcasting Corp., a radio station operator, renewed and expanded to 24,400 square feet for a little more than 10 years at Colony Square . Kerry Davidsen and Wendy McArthur with CB Richard Ellis Inc. in Atlanta , as well as Peter Kasian with Trizec, brokered the deal.

Collegiate Licensing Co., a company that doles out licensing for college sports team paraphernalia, renewed and expanded for 10 years for a total of 24,100 square feet at the Interstate North Office Park at 320 Interstate North Parkway . Trizec's Kasian brokered the deal.

Tidbit

Bob Voyles may be leaving Hines Interests L.P. to start his own dreams, but he's certainly leaving a legacy at the under-construction 1180 Peachtree tower in Midtown.

A more than $200 million legacy, that is.

Voyles helped negotiate the King & Spalding LLP lease at the future tower in Midtown in perhaps the biggest office leasing coup in the past year. According to Voyle's new company's Web site, www.sevenoakscompany.com, the total value of that lease over 15 years is $205 million. That means King & Spalding is paying about $31 per square foot on its future lease in the building, according to Voyles' numbers.

After 16 years with Hines, Voyles, 52, is resigning at the end of July to start his own company -- Seven Oaks Co. -- a small firm he plans to use as a vehicle for mixed-use urban developments in the metro area.

He is focusing on land acquisitions in Atlanta , as well as projects that can incorporate residential, retail and even small office components. He said he has spoken to parties that would be interested in financing his company, but plans to wait on pushing that until after he leaves Hines.

Voyles also left another interesting tidbit on his Web site about Hines' own future plan for 1180 Peachtree:

"Hines is projecting to sell at a significant premium to replacement cost when the project is completed and stabilized in 2007," Seven Oaks' Web site stated.

Voyles was unavailable for comment.

Lecraw apartments

Julian LeCraw & Co.has two more apartment complexes in its portfolio.

Julian LeCraw bought Landings at Peachtree Corners for $17.8 million June 18 and The Remington in Ponte Vedra Beach , Fla. , for $25.2 million June 25. Both properties were sold by Galesi Management Corp. in Schenectady , N.Y.

Julian LeCraw plans $1.5 million in renovations to the 490-unit Landings at Peachtree Corners, at Peachtree Industrial Boulevard and Holcomb Bridge Road in Duluth , said Jeff Warshaw, a broker with Julian LeCraw.

With occupancy around 88 percent, income at The Landings at Peachtree Corners has been down 20 percent from 2001, Warshaw said.

"We think we are going to ride the wave of the economy and get back to where we used to be," he said.

The Remington in Ponte Vedra Beach has 344 units and is about 95 percent occupied, Warshaw said.

"We've been buying a lot of property in the Jacksonville area and converting [them to condominiums], but this one we'll probably run as apartments," Warshaw said. Steve Bloom represented Julian LeCraw in the Florida deal.

Dennis Tremarchi represented Galesi in both deals.