Atlanta’s iconic Peachtree Center has been taken over by its lender, putting the future of the downtown 2.5 million square foot office and retail complex in question.
Part of the Peachtree Center complex in downtown Atlanta.
Banyan Street Capital acquired the center, which consists of six office towers at 225, 229, 233 and 235 Peachtree St. and the mall called The Hub, in pieces between 2006 and 2017, but on Tuesday it lost it all in a foreclosure auction, reported the Atlanta Journal-Constitution.
Commercial real estate finance company SitusAMC, representing investors who control a $115.3 million commercial mortgage security on the property, won the auction with a credit offer of $127.5 million. Banyan Street failed to make a lump sum payment on the debt in April, putting it in default. Banyan Street found the loan “difficult to fund,” a spokesperson told the Atlanta Business Chronicle in a statement last month.
The only outside offer was a $1.5 million cash offer from a local investor.
“It’s just disappointing to see that Banyan has been such a good steward of this asset in recent history,” Central Atlanta Progress President AJ Robinson told AJC. “They put a lot of money into the buildings, and I think it’s just kind of sad to realize that the relationship between them and their lenders doesn’t seem to have worked out.”
According to loan documents reviewed by both the AJC and the ABC, Peachtree Center’s occupancy and revenue have been declining for some time. Net operating income fell from $18.9 million in 2019 to $10.4 million in the first nine months of 2021, the ABC reported. The occupancy rate fell from 72% in 2019 to 55% in December 2021, Truist Financial Corp. having left its offices last April.
Part of the Peachtree Center complex, Marriott Marquis and Hyatt Regency and AmericasMart convention center hotels were not part of the lockdown this week, the AJC reported.
This is not the first time that Banyan Street has faced financial difficulties with the property. In 2014, he refinanced Peachtree Center with $182 million in long-term CMBS debt and $35 million in mezzanine financing after the property was serviced, bisnow Previously reported.
The complex was developed in phases by the late developer John Portman from the 1960s to the 1980s, but has now succumbed to the fate of many older office and retail buildings over the past two years – taken over by lenders.
Banyan Street told AJC the company remains committed to its ownership of the 191 Peachtree office tower near Peachtree Center, as well as Ascent Peachtree, the multi-family tower built atop a parking lot at 161 Peachtree Center. Ave.