Lone Star Hands Keys To EY's Atlanta Tower Over To Lender
A Dallas-based private equity giant has relinquished control of a 14-story Atlanta office building as its anchor tenant eyes the exit.
Lone Star Funds surrendered the 14-story 55 Allen Plaza building in Downtown Atlanta to its lender on March 12 in a deed-in-lieu-of-foreclosure transaction, valuing the building at $57.8M, according to Fulton County records.
The new owner, Phoenicia Real Estate Holdings XI, is registered to the Manhattan address of real estate debt investment firm Sound Point Capital Management.
A spokesperson for Lone Star declined to comment. Sound Point officials didn't respond to requests seeking comment.
Lone Star purchased 55 Allen Plaza from the Teachers' Retirement System of the State of Illinois on March 6, 2020, for $79M — less than a week before the coronavirus was declared a pandemic.
Lone Star financed the deal with a $67.5M loan from NXT Capital Partners that matured in January, according to the Reonomy property database. The loan was sold to Sound Point in 2021, according to a spokesperson for NXT Capital.
The Illinois pension fund acquired the building in 2011 for $57M at a foreclosure auction after its developer, Hal Barry, lost it during the Great Recession.
Barry built the 349K SF tower, perched over the Interstate 75/85 Interchange, in 2005 as part of his Ivan Allen office complex. Its debut tenant was Ernst & Young, now EY, which still has its logo emblazoned across the top floor.
But EY is in talks to vacate its roughly 110K SF office at 55 Allen Plaza and move to a new space in Midtown, Bisnow previously reported.
Lone Star is the latest investor to lose a piece of prime Atlanta real estate it bought when debt was plentiful and cheap. Earlier this month, Wells Fargo foreclosed on the Westside Collective, a portfolio of four Westside adaptive reuse projects, for $56M, half the value that Crestlight Capital and J.P. Morgan Global Alternatives paid for it in 2021.
Other major foreclosures in recent months include the Hilton Atlanta convention hotel, a 1.2M SF portfolio of suburban office properties formerly owned by Adventus Realty Services and a 623-unit South Buckhead apartment tower.
UPDATE, MARCH 20, 12:55 P.M. ET: This story has been updated with additional information about the sale of the mortgage by NXT Capital.
