Franklin Street Looks To Sell Pershing Park Plaza
Pershing Park Plaza, the iconic office building situated at the nexus of Peachtree and West Peachtree streets in Midtown, may soon have a for-sale sign figuratively planted on the front yard.
Its owner, Franklin Street Properties Corp., is considering putting the nine-story, 160K SF office building on the market, a year after it secured a 100K SF lease with law firm Swift, Currie, McGhee & Hiers LLP, backfilling space vacated by Jones Day. Franklin Street President Jeffrey Carter identified Pershing Park Plaza during a second-quarter earnings call on Aug. 6 in response to an analyst's question about planned dispositions.
“Pershing Park has not officially hit the market. We intend for it to hit the market shortly, and so we put that out there,” Carter said, according to a Seeking Alpha transcript of the call.
Carter didn't offer details about target prices or the timing of a potential sale, but did say the firm's past repositioning efforts “have resulted in an opportunity to check whether those ... value objectives and targets in terms of pricing can be met today,” Carter said. “And if they're not, then we are happy to continue to own such a strong property location and tenancy.”
Boston-based Franklin Street acquired Pershing Park, located at 1420 Peachtree St., in 2016 for $45.5M, with plans to invest an additional $1.8M into capital improvements, according to a press release. At that time, Jones Day was the largest of three tenants in the building, occupying 88% of its rentable office space.
Jones Day moved out of Pershing Park Plaza to anchor a new building at Colony Square's redevelopment, built by North American Properties.
“First, I'd say we're not sellers at any price. We're sellers if we meet our targeted pricing ranges,” Carter said on the call. “Second, we are very bullish on the Sun Belt and the Mountain West, including Atlanta, and have been for many years. As to Pershing Park specifically, Midtown Atlanta is widely recognized as a very desirable and compelling investment market at this time.”
While investors have been bullish on the Atlanta office market, the aggressive rate hikes by the Federal Reserve have caused a pullback in pricing and deal volume. During the first half of 2022, Atlanta office sales fell $200M year-over-year to $1.3B, according to Avison Young data, while the average price per SF dropped 7%.
