It’s not every day in Baton Rouge that one class A office building changes hands, much less six of them.
But after just five months on the market, a portfolio of six buildings, several along the busy Corporate Boulevard corridor, as well as a seventh building in Metairie, sold in late October for $52.7 million to a group of investors that includes an Atlanta-based developer with deep roots in Louisiana and some local partners with deep pockets.
Heading the group is developer David Songy, a native of Alexandria, whose Songy HighRoads real estate company has developed more than $1 billion worth of office, hotel and mixed-use projects throughout the South over the past 20 years.
His local investors include long-time friend, business partner and developer Mike Wampold—now arguably the largest real estate developer and landowner in Baton Rouge—and Robert Merrick, the veteran chairman and CEO of NAI/Latter & Blum in New Orleans.
While the sale is not the single-biggest real estate deal in Baton Rouge in recent years, it ranks ?near the top.
Only the 2011 sale of The Cottages of Baton Rouge, a multifamily development on Ben Hur Road, was bigger at $89.5 million.
Granted, other office buildings have sold for more than the properties in the portfolio would have fetched individually. Still, the seven-building portfolio sale is a big deal—not only because of the numbers but also because of what it means for the local market.
For one thing, it suggests big-time investors are bullish on the Baton Rouge economy and the direction in which they believe it is headed.
For another, having local ownership is positive for the local market. Local owners are better landlords and generally take a more long-term view toward their investments.
Then there’s the fact that the sale further shifts the dynamics among real estate power players in the local market. The buildings originally belonged to Tommy Spinosa, who developed most of them in the 1990s. He lost them earlier this year, when his major equity partner, the New York-based REIT Kimco, took them over and promptly put them on the market.
Spinosa’s JTS Realty had continued to manage the properties and, in fact, kept its corporate headquarters in one of the building. Now that the sale is complete, JTS no longer has that management contract. Songy HighRoads will manage the buildings and promises to make some long overdue improvements to them. Latter & Blum’s Ty Gose will handle leasing.
Buyer: Songy Highroads, an Atlanta, Ga., real estate company owned by Louisiana native David Songy; local developer Mike Wampold; New Orleans real estate executive Robert Merrick, chairman and CEO of NAI/Latter & Blum.
Seller: Kimco, a New York-based real estate investment trust
Price: $52.8 million
Properties: Acadian Center, 2431 S. Acadian Thruway; Citiplace One, 2600 Citiplace Drive; Citiplace Two, 6300 Corporate Blvd; Sherwood Oaks Office Park, 4314, 4324, 4334, 4354 Sherwood Forest Blvd.; Corporate Atrium, 5555 Hilton Ave.; Corporate Two, 5615 Corporate Blvd.; and Latter Center West, 2800 Veterans Blvd. in Metairie.
Total square feet: 519,000
Occupancy: 89%
