34 Peachtree Sells for About One-Third of 2005 Price

ATLANTA—34 Peachtree, a 30-story office tower in Downtown Atlanta, has a new owner. Fairlead Commercial Real Estate LLC and The Creations Group snapped up the mortgage note for $11.85 million in partnership with Asian-based private investors.

The sale price equals $39 per square foot. The prior ownership paid $28.25 million, or $94 per square foot, for the property in 2005. One Park Tower LLC acquired the note in an all-cash transaction. Cushman & Wakefield represented special servicer Midland Loan Services in the note sale.

Fairlead acted on behalf of the ownership entity, One Park, in the note acquisition, the foreclosure and the transition over to the new owner and operating company. The 282,589-square-foot office tower went into foreclosure Sept. 3.

“We are strong believers in the resurgence of downtown and saw the note acquisition as an excellent opportunity to expand the ownership's position in Downtown Atlanta, as well to strategically invest in areas of growth,” says John Ward, Chief Investment Officer of Fairlead. “Investors are witnessing Central Atlanta Progress's revitalization efforts come to fruition after years of effort. The investment community is also encouraged by the significant influx of energy provided by the ongoing growth of Georgia State University, which leases space at 34 Peachtree as well as the recently purchased 55 Park Place, as other key properties along Woodruff Park.”

Located at 34 Peachtree Street in the heart of Downtown Atlanta, the office building offers tenants access to restaurants, shops, parks, attractions, and a nearby MARTA rail station (Five Points). The building is 66% percent leased.

The Atlanta Streetcar project—a joint effort by Central Atlanta Progress, the City of Atlanta and other organizations—plans to open its first streetcar route in early 2014, a 2.7-mile loop that will pass near 34 Peachtree. In the nearby Centennial Olympic Park district, new attractions including the College Football Hall of Fame and the National Center for Civil & Human Rights will soon open beside the popular Georgia Aquarium and World of Coca-Cola.

The purchase of the property for $11.85 million places One Park at a very low basis and, in combination with existing tax incentives, the new owners expect to pass significant savings on to tenants. Fairlead will be in charge of leasing and property management at 34 Peachtree, with the firm's president Jeff Shaw and vice president of Leasing Jim Caswell leading the leasing efforts.

“This is an excellent value-add investment that provides Fairlead the opportunity to create value for the building's ownership partners through our leasing, property management and asset management services,” Shawn says. “We expect to finalize 120,000 square feet in lease transactions in the coming months. With its Peachtree Street address, the building provides a prime location for high-tech and other office tenants, offering them some of the best value in the region.”

Both TCG and Fairlead are fully engaged with neighborhood associations, Central Atlanta Progress, Invest Atlanta, and the City of Atlanta in an effort to engage with the community to co-invest in areas of growth and improvement. Their partnership is allowing for foreign private funds to enhance the longer term goals of downtown tenants, such as Georgia State University, and to support long-term redevelopment plans around Peachtree Street.

The purchase of the property for $11.85 million places One Park at a very low basis and, in combination with existing tax incentives, the new owners expect to pass significant savings on to tenants. Fairlead will be in charge of leasing and property management at 34 Peachtree, with the firm's president Jeff Shaw and vice president of Leasing Jim Caswell leading the leasing efforts.

“This is an excellent value-add investment that provides Fairlead the opportunity to create value for the building's ownership partners through our leasing, property management and asset management services,” Shawn says. “We expect to finalize 120,000 square feet in lease transactions in the coming months. With its Peachtree Street address, the building provides a prime location for high-tech and other office tenants, offering them some of the best value in the region.”

Both TCG and Fairlead are fully engaged with neighborhood associations, Central Atlanta Progress, Invest Atlanta, and the City of Atlanta in an effort to engage with the community to co-invest in areas of growth and improvement. Their partnership is allowing for foreign private funds to enhance the longer term goals of downtown tenants, such as Georgia State University, and to support long-term redevelopment plans around Peachtree Street.