This Week's Atlanta Deal Sheet: Law Firm Expanding At One Atlantic Center
A growing local real estate and corporate litigation law firm used a pending loan maturity held by a fund run by Starwood Capital Group to extract below-market rents on its expansion at an iconic Midtown Atlanta office tower.
Krevolin & Horst renewed and expanded a 23K SF lease to occupy the entirety of the 35th floor of One Atlantic Center, the 50-story, 1.1M SF tower at 1201 West Peachtree St. Krevolin & Horst will increase its footprint from 17K SF and move up from the 32nd floor, according to Savills.
Savills Vice Chairmen Bo Keatley, John Flack and David Rubenstein represented the firm in the transaction. The brokers were able to leverage the building owners' “loan maturation uncertainties” to get a long-term lease with “below-market economic and business terms” to stay put instead of move elsewhere in Midtown, according to a statement from the tenant representation firm.
Terms of the lease were not disclosed.
Starwood, through its Starwood Global Opportunity Fund X, and Core Property Capital jointly purchased One Atlantic Center in 2016 for a reported $330M. The joint venture has a $280M modified loan from Deutsche Bank USA that was set to mature in July, according to Reonomy.
Starwood didn't respond to a request for comment. After this article's original publication, a Savills spokesman sent a statement clarifying the wording of the firm's initial press release.
"Savills' initial statement mischaracterized the transaction as negotiated at below market terms," a Savills spokesperson said in a statement. "On the contrary, the lease renewal agreement reflects market terms, and there was absolutely no basis to state that the building’s loan maturity was a factor in the lease negotiation."
LEASES
Package and freight delivery company Dachser USA Air & Sea Logistics inked a 131K SF lease at Airport West 500, a 218K SF distribution center at 3625 Naturally Fresh Blvd. near Hartsfield-Jackson Atlanta International Airport.
Lincoln Property Company Southeast Vice President Denton Shamburger, Vice President Turner Fortin and Associate Colin Beecham brokered the deal for the landlord, Corporate Leasing Corp. of Atlanta.
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The Department of Housing and Urban Development is vacating its 123K SF lease at Five Points Plaza in Downtown Atlanta when its lease expires in February, Bisnow first reported. HUD's employees will be relocated to the federally owned Martin Luther King Jr. Building at 77 Forsyth St., according to a spokesperson for the General Services Administration, the federal government's real estate arm. The move is expected to save taxpayers more than $30M over the next decade.
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Trimont Real Estate Advisors leased 50K SF at Highwoods Properties' Two Alliance Center for its 200 employees, the Atlanta Business Chronicle reported. Terms of the deal were not disclosed.
Savills' Bo Keatley, John Flack and David Rubenstein brokered the lease for Trimont, while Highwoods Properties Director of Leasing John Grimsley and leasing representative Katy Adams represented the landlord in-house.
FINANCING
Trustmark National Bank and Coastal State Bank jointly provided construction financing to Waterloo Partners and ICM Asset Management for an 825K SF speculative distribution center development in the city of Jackson, some 50 miles south of Downtown Atlanta.
The banks provided a $40M loan for the $75M project, the ABC reported. Patterson Real Estate Advisory Group secured the financing, with Sweid & Sweid providing equity.
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McCraney Property Co. secured an $80M senior loan for its Main Gate Logistics park, a newly built industrial complex encompassing 1.3M SF in Savannah, 8 miles from the Georgia Port Authority.
JLL Senior Managing Director Melissa Rose, Director Michael DiCosimo and analyst Mateo Bolivar brokered the financing for McCraney.
ASSIGNMENTS
Cushman & Wakefield Managing Director Will Porter, Associate Melanie Garlock and Executive Vice Chairman Josh Kuriloff have been tapped to lease 1 through 3 Verizon Place, a 382K SF office campus in Alpharetta, on behalf of the telecommunications giant.
UPDATE, DEC. 1, 5 P.M. ET: This story has been updated with a new comment from Savills about the terms of the Krevolin & Horst lease at One Atlantic Center.
