C&W Arranges Financing for 2.5 MSF Office, Retail Complex in Atlanta

 By Gail Kalinoski, Contributing Editor

Capital improvements will be made at Peachtree Center, a 2.5-million-square-foot office and retail complex in downtown Atlanta, thanks to $182 million in financing obtained by Cushman & Wakefield for owner Banyan Street Capital and its foreign equity partner.

The financing is comprised of a $147 million long-term, floating rate CMBS loan that will be used to refinance an existing loan and a $35 million mezzanine loan that will provide funds for capital improvements and leasing costs.

Mike Ryan, Brian Linnihan, Jeff Walker and Telly Fathaly of Cushman & Wakefield’s Equity, Debt & Structured Finance team based in Atlanta arranged the financing. Silverpeak Real Estate Financing originated the long-term CMBS loan and Oaktree Capital Management provided the mezzanine loan.

“Peachtree Center is an iconic downtown asset and a key hub for business and visitors. The property provides lenders an ideal combination of strong cash flow, a highly manageable tenant rollover schedule and upside through enhanced occupancy,” Ryan, Cushman &Wakefield senior managing director, said in a news release.

Exterior renovations and common area upgrades will be made as part of the capital improvements program planned by Miami-based Banyan Street Capital, which bought Peachtree Center in 2006. Banyan Street’s unidentified foreign equity partner is represented in the United States by EII Realty Corp.

Located on Peachtree Street in the heart of downtown Atlanta, the complex has six Class A office towers, The Mall at Peachtree Center and three parking garages. Designed by John Portman & Associates, buildings were completed in stages from 1967 to 1987. Anchored by SunTrust Bank, Peachtree Center has more than 180 tenants.

“Peachtree Center and the overall downtown market are experiencing significant momentum. Leases totaling 120,000 square feet have been signed at Peachtree Center in the past six months, bringing occupancy to 75 percent,” said Linnihan, a Cushman &Wakefield managing director. “The property also benefits from an ongoing resurgence of downtown Atlanta, represented by the $2.1 billion in construction projects under way, including hotels, housing, retail, restaurants, the  new Falcons stadium and the College Football Hall of Fame. The momentum is further demonstrated by numerous high-profile business relocations to downtown office buildings.”

There is an on-site MARTA retail station and the complex is also near Interstates 75 and 85. Located at 229-235 Peachtree St. and 245-295 Peachtree Center Ave., Peachtree Center is part of a mixed-use development that includes the Hyatt Regency Atlanta and the Atlanta Marriott  Marquis, which are connected to the center by covered skywalk bridges, and AmericasMart, a large permanent wholesale trade center.

A second-quarter Office Insight report for Atlanta from JLL notes that the economy in the city is improving with employment growth outpacing the national average. The report stated landlords of Class A and Class B downtown buildings were the most bullish, increasing rental rates as the demand begins to outpace supply.