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Tishman Speyer Exits Atlanta

NY Investor Sells Final Asset Then Shutters Office
February 26, 2018
When Tishman Speyer entered Atlanta in 2006, it served as a source of pride for the local commercial real estate community.

But now it's gone.

Tishman Speyer representatives confirmed to CoStar News that the New York investor and developer has closed its Atlanta office. The move comes shortly after Tishman Speyer sold its final Atlanta asset, Three Alliance Center in Buckhead. The 30-story office tower traded for a record per square foot price of $533, or $270 million, in December.

Tishman Speyer stresses that it is in no way ruling out a return to Atlanta, especially if the right investment or development opportunity presents itself. The firm has a generally bullish outlook for Atlanta, the representative said.

Formed in 1978 when Robert V. Tishman and Jerry I. Speyer joined forces to create the New York real estate powerhouse, Tishman Speyer has acquired and operated more than 400 projects comprising 165 million square feet of space. Robert Tishman led Tishman Realty and Construction Co.'s expansion across the U.S., while his cousin, John Tishman, oversaw the construction arm that built the twin towers at the World Trade Center in New York and Renaissance Center in Detroit, among other projects.

The firm made a big splash when it entered Atlanta in October 2006, paying $675 million for a five-building office portfolio comprising 3.5 million square feet. The properties included the two towers at Colony Square, another pair of buildings at Midtown Plaza and One Alliance Center in Buckhead. The properties had previously been part of Blackstone Group/Brookfield Properties' acquisition of Trizec Properties, and Blackstone quickly sold them to Tishman.

Tishman's acquisition included development sites for two office towers at Alliance Center. Tishman completed Two Alliance Center in 2009 and Three Alliance Center in 2017.

Chris Ahrenkiel, who served as Tishman's managing director in Atlanta from 2006-2017, is credited with filling up Two and Three Alliance with blue-chip tenants including Novelis, Marsh, Global Payments and AON. Ahrenkiel left Tishman after it sold Three Alliance to join Selig Enterprises, where he serves as executive vice president.

Despite its development successes in Buckhead, Tishman Speyer sputtered in Midtown where it owned Colony Square and One and Two Midtown Plaza. This occurred partially because of marketing timing - Colony Square and Midtown Plaza were hurt by the Great Recession that began in December 2007 and crushed first Atlanta's residential and then commercial real estate market.

In 2011, Fitch Ratings reported that Tishman Speyer faced default on loans of more than $115 million that were secured by Colony Square and a $65 million loan with Midtown Plaza as the collateral.

Tishman successfully negotiated with its lenders to hold onto the properties and eventually sold One and Two Midtown Plaza and 1372 Peachtree to Lincoln Property Co. for an aggregate price of $96.3 million in April 2015, according to CoStar Research.

Tishman sold the two office towers and mall at Colony Square to North American Properties for an aggregate price of $166 million in December 2015. It had previously sold Two Alliance Center to Highwoods Properties in 2012 and sold One Alliance Center to ORIX in 2013. ORIX then sold it to Highwoods three months later.

Tony Wilbert, Atlanta Market Reporter  CoStar Group   

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