ATLANTA-It is not every day that the owner of a 400,000-squarefoot office building is able to renovate it without help from alender. But Atlanta-based Westplan Investors, a boutique commercialreal estate firm, which owns the 55 Marietta Street building indowntown Atlanta, is just such an owner. The building, which is 55years old, just received a $5 million renovation paid for byWestplan.

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The renovation of 55 Marietta Street included, in addition tocosmetic touches, such as an upgraded lobby and renovation of the3,000 to 4,000 square feet of ground floor retail, new transformersto generate more power and more backup generators.

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The main rationale for beefing up the power is that half thebuilding is a telecom hotel with tenants like Cyberwurxz, Q Westand Cogent. A big part of these companies' business is hostingwebsites.

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In addition to the building changes mentioned above, Westplanrenovated a floor to show prospective tenants what their spacewould look like, should they choose to rent at 55 Marietta, whichis 60% occupied. Westplan does the build-out for most tenants, saysEwoud Swaak, president of Westplan Investors.

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Westplan purchased the building in 1993 and half of it wasconverted into a telecom hotel the next year. The firm decided todo the conversion once it was discovered that 55 Marietta Streetwas sitting on the main fiber optic network for the US, in essence,a fiber optic super highway, says Swaak. “We didn’t know this whenwe bought the building,” he says.

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Swaak is hoping that the renovation will help to fill up thebuilding. Last year, there were 30,000 square feet of new tenantsadded, but none thus far in 2010, although there may be a10,000-square-foot-lease signed in the second quarter, he says.With a vacancy rate in downtown Atlanta at 23.3% in first quarter2010, according to Cushman & Wakefield of Georgia, filling up abuilding the size of 55 Marietta is no easy task. It will take acouple of years to increase the occupancy rate significantly, saysSwaak, who adds that “at least the economy has bottomed out.”

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“Not having debt on the building is really important today,”says Swaak. “In the last couple of years, tenants have worriedabout landlords being able to pay for tenant improvements andbrokerage fees,” he says.

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The downtown office market is made up primarily of olderbuildings, says Chris Shaner, research director at Cushman &Wakefield of Georgia. One of the problems for downtown landlords,he says, ”is that newer office buildings in Buckhead are attractingtenants, which is the reason you see more renovations going ontoday with older office product. To compete, requires anupgrade.”

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In addition to owning the office building on Marietta Street,Westplan Investors manages a portfolio of 7,000 apartments inFlorida, Texas, Arizona, South Carolina and Georgia and roughly350,000 square feet of shopping centers in Georgia.

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