Lone Star Funds Hands Atlanta Office Asset Over to LenderAflac, Sound Point Acquire Allen Plaza Building

Aflac has quietly taken control of a major downtown Atlanta office tower after Lone Star Funds handed over the keys to avoid foreclosure.

The move puts the insurance giant at the center of yet another distressed office deal and into the spotlight as a potential bellwether for how big lenders are managing the office asset reset.

The 14-story, 350,000-square-foot tower at 55 Allen Plaza, long anchored by accounting firm EY, was turned over via deed in lieu of foreclosure earlier this month, the Atlanta Business Chronicle reported.

The deal was valued at $57.8 million ($165 per square foot), a roughly 27 percent discount from the $79 million Lone Star paid for the building in 2020.

The new titleholder, Phoenicia Real Estate Holdings XI LLC, is registered to Sound Point Capital Management, which operates a joint investment platform with Aflac. In Aflac’s 2024 annual filing, Phoenicia is listed as part of its global investment fund, confirming the insurer’s growing role in acquiring distressed office assets through debt channels.

The loan backing Lone Star’s acquisition had matured, and the firm had been unable to refinance. It was originally issued by NXT Capital, which transferred servicing to Sound Point in 2021.

Part of the larger Allen Plaza mixed-use development, 55 Allen Plaza was once a symbol of downtown Atlanta’s mid-2000s revival. But it has struggled with occupancy and tenant retention. The building is 66 percent occupied, according to CoStar.

But EY is expected to exit, as it is searching for 100,000 square feet in Midtown, sources told the outlet, raising questions about the long-term stability of 55 Allen Plaza’s tenant base.

Atlanta-based Selig Enterprises still holds air rights on the building, meaning Aflac or any future buyer would need to pay lease fees tied to those rights.

The transaction adds to a wave of distressed office deals across Atlanta as owners offload underperforming assets and institutional lenders quietly step in. But local players are getting in on the action, too, including RG Real Estate, which acquired the TownPark Commons office complex in Kennesaw for $42 million — about half its past price — following a foreclosure.

— Judah Duke