A New York real estate firm that acquired a prominent Buckhead office tower at the height of the market has given the property back to the lender.
Tishman Speyer confirmed Monday it transferred ownership of One Alliance Center, which stands between Ga. 400 and Phipps Plaza, to Orix Capital Markets, a firm that tries to help salvage troubled loans. The $165 million loan on the property has been troubled since at least 2010, when it fell under the care of a different loan workout firm, according to data from real estate research firm Trepp.
Ed Smith, Orix USA vice chairman, said the move would not change the daily operations of the building.
Though metro Atlanta’s office market is on the upswing after several brutal post-financial crisis years, the fate of the blue glass 22-story tower is a sign that challenges in real estate remain. In a statement, Tishman Speyer said the transition is a result of “the sharp marketwide downturn.”
Tishman Speyer bought One Alliance in 2007 and later developed a sister skyscraper known as Two Alliance Center. The buildings gaze over the Buckhead MARTA station and the Buckhead Loop just north of Peachtree Road.
One Alliance is 21.6 percent vacant — several points higher than the average top-tier Buckhead office tower, according to data from real estate services firm Jones Lang LaSalle.
Property values and rental income generally are lower than when Tishman Speyer bought the property, making it difficult to adjust the loan.
“Once the property’s income was insufficient to support its debt, we tried to restructure that debt in order to retain ownership,” Tishman Speyer said in the statement. “But we couldn’t reach an agreement to do so.”
Tishman Speyer has recently reshuffled its holdings, including selling Two Alliance Center and bringing in distressed real estate firm Rialto Capital Management as an investor in its Colony Square and Midtown Plaza properties.
The firm still controls a building site for a future Three Alliance Center and has been rumored for more than a year to be marketing the land to potential office space tenants for a future skyscraper.
The company said the situation with One Alliance Center does not affect its other investments, including the planned Three Alliance site. The statement said the company “look(s) forward to creating another iconic addition to the skyline there.”
About the Author
