Lincoln Property Co. and an Illinois pension fund have decided to sell 55 Allen Plaza, the newest, top-tier office tower in downtown Atlanta, and they expect the property to attract a lot of interest.
Lincoln tapped JLL’s Atlanta office to market the 14-story, 342,854-square-foot building on Ivan Allen Boulevard on the northern edge of Atlanta’s downtown market. Tony Bartlett, executive vice president of Lincoln Property Southeast, said he expects response to the offering to be “very good.”
The building “has a strong market position in an area that is rapidly improving,” Bartlett said in an email. Lincoln serves as the asset manager for the Teachers Retirement System of Illinois.
Atlanta ranked No. 8 for overall real estate prospects and investor demand in the coming year, according to the Urban Land Institute’s latest report, “Emerging Trends in Real Estate 2020.” Atlanta investments represented 3.2% of all U.S. transaction volume in the first half of 2019, according to the report.
“Atlanta is on investors’ short list and its position as a major landing spot for capital seems assured,” the report states.
Barry Real Estate Cos. developed 55 Allen Plaza and completed it in 2007, right before the Great Recession started in December of that year. The building fell into foreclosure, and the Illinois Teachers pension fund bought it in an auction for $57 million in 2011, according to CoStar data.
No new, top-of-the-line office tower has been built downtown since, though Parkway Property Investments plans to redevelop the aging 100 Edgewood office tower in the area. Parkway acquired the eight-story, 306,000-square-foot tower at 100 Edgewood Ave. near Woodruff Park for $17.7 million last month and plans to begin renovation work in the first quarter of next year.
In JLL’s offering summary for 55 Allen Plaza , the firm plays up the tower’s location in Atlanta’s “Innovation Corridor,” which is the area between the Interstate 75/85 Downtown Connector and West Peachtree Street, south of 10th Street. The corridor has attracted scores of tech and creative companies such as banking software giant NCR Corp., in addition to the future headquarters of Norfolk Southern. About 80% of tenants in the Innovation Corridor, which is close to Georgia Tech, are tech companies, according to JLL.
Allen Plaza sits just to the south of the Downtown Connector and, as part of the downtown market, offers lower rents than midtown proper. “The spread in rental rate between 55 Allen Plaza and Midtown Class A properties has widened in the past 18 months” from $3.60 per square foot to $12 per square foot on a full-service basis, according to JLL.
The tower at 55 Allen Plaza is 75% occupied, according to JLL and CoStar. The largest tenant is accounting firm EY, which occupies 110,396 square feet, according to CoStar.
-Tony Wilbert for CoStar News