Wachovia Begins Move to Midtown

Wachovia will be occupying about 206,000 sf on a 10-year lease, Jeffrey S. Freeman, vice president, development, AIG Global Real Estate Investment Corp., New York, tells GlobeSt.com. AIG and local developer James F. Jacoby are joint venturing the project. Freeman says the SouthTrust Building is 85% leased and will be 85% occupied "within the next couple of months." Freeman says gross rents average $26 to $29 per sf, including operating expenses. John Zintak of Carter is the broker for the office project.

Wachovia has formally told its 5,400 employees at 210 metro area branches of the move. When the bank completes its relocation in August, Wachovia will occupy the 156,000 sf SouthTrust is occupying on seven floors. Wachovia will also be occupying a full eighth floor, bank officials confirm. The bank is also vacating two offices in suburban Decatur and an operations center in Marietta.

Wachovia's logo will also replace the SouthTrust signature atop the Atlantic Station building. Wachovia acquired SouthTrust in June 2004 for $14.3 billion in stock. With a combined $464 billion in assets and a market capitalization of $76 billion, Wachovia is the fourth largest bank in the US, based on assets, according to Federal Deposit Insurance Corp. data.

At Equity Office Properties' Peachtree Tower, meanwhile, leasing agents say they are confident they can fill most of the vacant space, even though the 1.2-million-sf structure could be 75% vacant within a year if no new tenants are found.

Wachovia 's lease doesn't formally expire until 2008. That means the bank will continue paying rent to Equity Office until it subleases the 300,000 sf quarters it is vacating. "This is a situation where the bank's lease could be bought out before its expiration date by the owner or developer of a new building, or even by principals at an existing building, if Wachovia had chosen that route," a Midtown broker who may be involved in future negotiations on similar deals, tells GlobeSt.com.

Meanwhile, the exodus from Downtown to Midtown continues.The 500-lawyer Powell, Goldstein, Frazer & Murphy firm vacated a total 200,000 sf at Peachtree Tower and the 230 Peachtree Building in November 2004. Powell Goldstein moved to the 50-story One Atlantic Center, formerly the IBM Tower, on 14th Street in Midtown.

Another Downtown law firm, King & Spalding, has leased 440,000 sf at Hines' 41-story, 681,000-sf tower being completed at Peachtree and 14th streets, as GlobeSt.com previously reported. The building is expected to be ready for occupancy in December.