A landmark office complex in Atlanta has hit the sales block, representing another speed bump on the downtown office market's potential road to recovery.
JLL has listed Peachtree Center's six office towers for sale without a disclosed asking price. The buildings contain 2.5 million square feet of office space and a 115,000-square-foot food hall.
Vacancy rates for the towers range from 27.4% to 79.6%, according to CoStar data. Tenants include the U.S. Nuclear Regulatory Commission, Habitat for Humanity, John Marshall Law School and several law firms.
The downtown Atlanta office market has struggled for decades, as Midtown and other neighborhoods grew in popularity among corporations.
In one example of weakness in the downtown market, the owner of 55 Allen Plaza returned the property to its lender.
Despite the office conditions, CIM Group is developing a $5 billion mixed-use project called Centennial Yards next to Mercedes-Benz Stadium and the Georgia World Congress Center convention center. Initial plans for Centennial Yards included office buildings, but CIM decided to start with only multifamily buildings due to the weakness of the office market.
Banyan Street Capital, the previous owner of Peachtree Center, defaulted on its mortgage in 2022, and the property was assigned to special servicer Situs AMC. Torchlight Investors is now the special servicer, Richard Reid, senior managing director at JLL, told CoStar News.
Bondholders seek repayment
Torchlight listed the buildings for sale now because it's "looking to return capital to the CMBS bondholders who are expecting a timely repayment of their debt investment," Reid said in an emailed statement.
The commercial mortgage-backed security J.P. Morgan Chase Commercial Mortgage Securities Trust 2018-PTC is backed by Peachtree Center, according to S&P Global. The properties are tied to an outstanding $115.3 million floating-rate, interest-only loan, according to CoStar data.
When the towers at Peachtree Center started to open in the 1960s, they led a revival of downtown Atlanta. Designed by architect John Portman, the buildings' modernist design helped define Atlanta as a rapidly growing Sun Belt city where business leaders and elected officials were eager to court new businesses. However, Peachtree Center has struggled with retaining top-shelf tenants.
JLL acknowledged Peachtree Center's struggles in marketing materials associated with its listing, saying the properties are "likely to trade at a discounted basis."
"Ownership will entertain offers on all of Peachtree Center or the individual components," JLL said.
A public appraisal of the six Peachtree Center buildings listed for sale is $121 million, according to JLL.
In April, Portman Holdings listed for sale the office portion of another property located within Peachtree Center, 230 Peachtree St. The sales listing by owner Portman excludes the Hotel Indigo, located on floors two through nine.
For the record
Richard Reid, Huston Green, C.J. Kelly, Peter Yorck, Katie Teague and Tyler Palmer at JLL represent the seller for the Peachtree Center listing.