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Historic Atlanta Cotton Warehouse to Bloom Again

Carter-Led Ownership Group Secures Debt, Equity and Bond Financing to Redevelop The Metropolitan in West End
July 3, 2018

Pictured: The Metropolitan.

Plans to redevelop a century-old former cotton warehouse built by Coca-Cola co-founder Asa Candler in Atlanta's West End, are falling into place.

The new owner, headed by longtime Atlanta developer Carter, just received a bond inducement of $90 million from the Development Authority of Fulton County. Carter secured equity financing from Silver Point Capital, a registered investment adviser (RIA) based in Greenwich, CT, and debt from LoanCore Capital, an asset management firm focused on commercial real estate credit, also based in Greenwich.

Carter currently is working on its redevelopment plans and branding effort for the project, which it has named The Metropolitan. The plans will include a residential component and will comply with the city of Atlanta's affordable housing ordinance.

The Met becomes the second major redevelopment Carter is overseeing in the city. The Midtown-based firm also is working with Georgia State University to re-create the long-dormant business districts surrounding the former Turner Field, which the Atlanta Braves left in October 2016.

The redevelopment of The Met is the latest in a string of new developments planned for Atlanta's West End neighborhood. Mixed-use developers have discovered the forgotten area as new residents move into the older homes that are more affordable for millennial buyers.

At its Lee+White Food and Beverage District, Stream Realty is converting an old warehouse building to restaurant space. Less than a mile away, Zayo Holdings Group, a Colorado data center company, will open its second zColo colocation operation at 1150 White St. this month.

Carter, which acquired the seven-building complex at 675 Metropolitan Parkway for $57.5 million on May 31, plans to allow existing tenants to operate while repositioning the development near the West End MARTA station. The Met currently has more than 500 tenants in 175 unique spaces, Carter Senior Vice President David Nelson told the Development Authority of Fulton County (DAFC) at its May meeting.

During the meeting, the DAFC board unanimously approved a letter of inducement for $90 million in taxable revenue bonds to help finance Carter's redevelopment plans.

At The Met, Carter plans to capitalize on the rising appetite for creative office space. Loft-style, open-air office space in former warehouses and new-built properties accounts for less than 5 percent of Atlanta inventory.

Carter initially will develop 100,000 square feet of creative and flex office space at The Met, Carter President and Chief Executive Officer Scott Taylor told CoStar News. It then will add another 100,000 square feet over the next several years.

Candler built the cotton warehouse project in 1914 as World War I began in Europe so struggling U.S. cotton farmers could store their surplus until the cotton markets rebounded. Known for co-founding Coca-Cola, Candler developed what was then Atlanta's tallest tower, the 17-story Candler Building at 127 Peachtree St., in 1906. He served as Atlanta mayor from 1916-1919.

Southeastern Industries Inc. later acquired Candler's warehouse complex and landed a number of large companies as tenants including General Electric, Genuine Parts, Buick Motors, Firestone Tires, Goodrich and The Atlanta Journal, according to a history of the project on The Met's website.

The warehouse district eventually would empty as economic downturns and a movement of industrial uses away from city centers took their toll. But the property was reborn as a haven for artists and craftsmen, and now is 90 percent leased.

Carter's acquisition positions the historic property for future success, said Lance Patterson, chief executive officer of Patterson Real Estate Advisory Group. Patterson arranged the debt and equity financing for Carter and said interest in investing it in The Met was intense.

"With its massive scale and incredible diversity of uses and tenants, the asset is extremely unique and receive the most-positive response from equity capital that our firm has ever experienced on a single deal," Patterson said.

Tony Wilbert, Atlanta Market Reporter  CoStar Group   
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