The Dew Recaps Campanile

An LA investor has helped The Dew refi his signature Midtown tower. We learned this week that Buchanan Street Partners has drafted a $72M loan secured by Campanile, the 26-story, 445k SF tower that Dewberry Capital picked up in 2010 for $36M. Dewberry's last big leasing coup came when SunTrust took nearly 100k SF there in 2011, pushing occupancy up to 50%.

The recap takes Georgia's Own Credit Union (who helped finance Dewberry's purchase) out of financial interest in the tower. The credit union could exercise a termination clause and move elsewhere, but Buchanan Street's Bob Dougherty says it won't likely take that option, given that the rent is substantially below market rates and for the credit union to replicate that cost, it would have to find digs in the 'burbs and away from mass transit. (Plus they've probably made some friends in the area.) Even then, "the rent could be marked up $4 to $5/SF,” he says.

This is the second asset Buchanan Street has financed for Dewberry in Atlanta: Last October, Buchanan provided a $95M loan to refi Dewberry’s Peachtree Pointe (here) and Gallery Uptown complex at Pershing Point. Bob says the firm is bullish on Atlanta—no new office product is underway, and leasing and job growth is taking a real hold. “We think that Atlanta is in the third inning of this recovery, whereas a San Francisco or a Dallas/Houston are probably in the seventh or eighth inning,” he says. (Third inning means they probably have more freedom to steal some bases.) That means we may see a drop in Midtown's 17% vacancy soon.