Piedmont Office Realty Trust, Inc. 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 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 industry has rallied 4.7%.
Stocks to Consider
Some better-ranked stocks from the real-estate space include Alexandria Real Estate Equities, Inc. ARE, Equity Residential EQR and Mid-America Apartment Communities, Inc. MAA, each carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Alexandria Real Estate’s Zacks Consensus Estimate for 2019 funds from operations (FFO) per share has moved marginally north to $6.98 in the past two months.
Equity Residential’s FFO per share estimate for the current year moved up 1.5% to $3.44 over the past month.
Mid-America’s Zacks Consensus Estimate for the ongoing year’s FFO per share climbed marginally to $6.28 in a week’s time.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Mid-America Apartment Communities, Inc. (MAA) : Free Stock Analysis Report
Equity Residential (EQR) : Free Stock Analysis Report
Alexandria Real Estate Equities, Inc. (ARE) : Free Stock Analysis Report
Piedmont Office Realty Trust, Inc. (PDM) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research