Loan payment due, Sumitomo incurs loss on sale of Atlanta Financial Center
Sumitomo Corp. of America has agreed to sell the 915K SF Atlanta Financial Center complex to Nightingale Properties at a loss for $182 million in an off-market transaction.
Sumitomo bought the property from Hines in 2016 for $222.5 million and invested $15 million in improvements.
Nightingale is trying to raise $76 million in equity for the deal through crowdfunding platform CrowdStreet. In his investment offer, Nightingale said the property is a good deal as Sumitomo needs to offload as its loan is about to mature.
“The investment offering presents a rare opportunity to acquire a trophy desk at a steep discount as the seller is ‘forced’ and ‘under pressure’ and must transact regardless of market conditions due to redemptions of investors and the upcoming maturity of the loan in the second quarter of 2022,” Nightingale said. offer summary shown on CrowdStreet.
Under the offering, crowdfunding investors funding the acquisition will be part of a larger $330 million capital pool that includes $185 million in senior debt, $60 million in mezzanine debt and 8. $5 million equity from Nightingale.
The offer said the Atlanta Financial Center’s five largest tenants, including Truist, with a footprint of 265,000 square feet; Morris Manning & Martin, with 134K SF; Starr Indemnity, with 62K SF; North American Electric & Reliability, with 59K SF; and Foy & Associates, with 49K SF, have been on the property for several decades.
Current rents are below market. Nightingale takes out a projected rent increase of 23.5%, to $42 per SF.
Nightingale said in his offer that he expects to be able to secure rents of up to $60 per SF at the AFC after the completion of Hub404, a capped park adjacent to the financial center of Buckhead, a suburb of Atlanta. The nonprofit Hub404 Conservancy is building the project.
The company compared the Hub404 project to New York’s High Line development, a mixed-use complex with green spaces that was built on a former rail line on New York’s West Side.
In a webinar on CrowdStreet, Will Hutton, director of acquisitions for Nightingale, said the current landlord has 50,000 SF in letters of intent or rental offers with tenants. Hutton said 196K SF are vacant at the AFC.
According to CrowdStreet, investment funds for the deal are due by July 8.
Truist recently announced that it will move its securities division, including 1,000 employees, to a new development in Truist Park, adjacent to the Atlanta Braves baseball stadium in Cobb County. According to a report published in the Atlanta-Journal ConstitutionTruist will be the anchor tenant of a new office building in the development, known as The Battery.