$400 Million Mixed-Use Office Conversion Wanted in Atlanta

A 1960s office tower in downtown Atlanta is slated for a $400 million office-to-residential conversion from Invest Atlanta and a group of investors that includes the Integral Group, the Atlantic Companies, T. Dallas Smith & Company and Lalani Ventures.

The group, known as Two Peachtree Partners, could redevelop the 40-story office building at 2 Peachtree Street, along with adjacent properties at 1 Peachtree and 14 Marietta, into 600 residential units, retail and office, the Atlanta Business Chronicle reported.

The redevelopment plan calls for more than 200 affordable apartments, situated just steps away from MARTA’s Five Points station.

The project would be funded through a combination of private and public sources, including up to $250 million in low-interest loans from the U.S. Department of Transportation. Invest Atlanta is the city of Atlanta’s development authority.

The project’s $400 million price tag has raised concerns among city council members, especially compared to new construction. But the unique nature of the redevelopment justifies the price, said Invest Atlanta president Eloisa Klementich.

“To build something equivalent would take a long time,” Klementich said. “We want new; we want renovated; and we want converted. We need to be a city that embraces what we have and looks at all options when it comes to development.”

Although expensive and complex, the conversion of 2 Peachtree, built in 1966, into a modern mixed-use building is seen as a vital step in meeting Atlanta’s growing housing and development needs.

“Given the ambition of what the city wants the building to be, maybe the cost is not as surprising,” said Geoff Koski, president of KB Advisory Group, who is not involved in the project.

“These things are expensive,” he told the outlet. “This is why conversions of mid-century office to residential doesn’t happen more often, whether it’s in Atlanta or elsewhere.”

— Andrew Terrell