A distressed office building in northwest Atlanta has hit the market, several months after the owner defaulted on its loan.
A venture led by Israel-based Mivne Group has hired Newmark to sell One Tower Creek, a 100,000-square-foot building at 3101 Towercreek Parkway in the Cumberland/Galleria submarket, Bisnow reported. The asking price is $8.8 million, or $88 per square foot.
The Mivne venture stopped making payments on its $7.9 million CMBS loan in March, according to servicer commentary. German American Capital issued the loan in 2015 to Fishman Holdings Canada Property Investment Trust XI and Industrial Buildings Corporation, which later changed its name to Mivne Group.
The troubled state of the property reflects broader challenges facing the office market, such as remote-work trends and high interest rates. Atlanta’s office vacancy rate stood at nearly 25 percent in the first quarter, marking a 2 percent year-over-year increase, according to Cushman & Wakefield. Even the Cumberland/Galleria submarket, which has emerged as a bright spot in Atlanta’s office sector, isn’t immune from the growing wave of distress that’s starting to wreak havoc on the industry as loans mature.
One Tower Creek’s financial difficulties were exacerbated when key tenant Procure Analytics exited more than 35,000 square feet in January, dropping the building’s occupancy rate to 29 percent. Following Procure’s departure, the property faced an annual operating expense shortfall of $300,000.
An LLC tied to Mivne bought the building for $11.4 million in 2004. The property is valued at $10 million for tax purposes, according to Cobb County records.
The offering has drawn strong interest from two primary buyer groups: businesses looking to own their office space, and self-storage operators considering a conversion of the building, said Newmark’s Casey Keitchen, who is the listing agent.
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“I think the idea is now that there’s a big vacancy in the building, the building is a prime-time sale to a user,” Keitchen told the outlet. “It’s really almost like a plug-and-play for a user.”
Newmark is playing the opportunity for naming rights and the building’s high visibility near Interstates 75 and 285. Keitchen anticipates that the building will sell within a couple of months.
—Quinn Donoghue