A Midtown Atlanta tower traded hands at a 24 percent discount as the area struggles with stubbornly high office vacancy.
San Francisco-based Spear Street Capital paid $133.8 million for the 28-story, 585,000-square-foot tower at 1100 Peachtree Street, the Atlanta Business Chronicle reported.
The seller is Singapore-listed Manulife US REIT, which bought the property for $175 million in 2016. That’s a nearly 24 percent drop in sale price and comes out to $229 per square foot.
To finance the acquisition, Spear Street tapped New York-based Blackstone Real Estate Debt Strategies, which issued an $82.75 million loan for the purchase. Manulife plans to use the proceeds from the sale to pay down nearly 60 percent of its $204 million in debt due by 2026.
The sale comes as Midtown’s office vacancy rate remains high — reportedly above 30 percent — but institutional buyers and lenders are beginning to reengage on well-located assets. The 1100 Peachtree tower, located near Colony Square, is undergoing renovations and recently renewed its anchor lease with law firm Kilpatrick Townsend & Stockton, which occupies the top seven floors.
Also among its tenants is the Oceanaire Seafood Room, a restaurant that’s long occupied the ground floor of the building. Renovations to the tower’s lobby and exterior are underway, positioning the property for lease-up as the broader Atlanta office pipeline remains relatively quiet. Rockefeller Group’s 1072 West Peachtree is Midtown’s only major office project currently under construction.
“There are deals,” Databank founder Alan Wexler told the outlet. In fact, some lenders may feel that “there’s nowhere to go but up.”
For Spear Street, it’s the second notable Atlanta move this week. The firm also secured a $72.3 million refinancing deal for Summit Two, a 413,000-square foot office building at 1001 Perimeter Summit Boulevard in Brookhaven. The deal was arranged by JLL Capital Markets and RBC.
— Judah Duke
Read more
Commercial
Atlanta
Feds aim for speedy sale of Peachtree Summit
Commercial
Atlanta
Atlanta Braves swing for more real estate after $93M office buy