Highwoods Buys Trophy Buckhead Office Tower in $147M Deal
- Oct 02, 2012
Following a $146.7 deal, Highwoods Properties is now the owner of Atlanta’s iconic Two Alliance Center office building.
The price was determined by deducting $6.4 million of closing credits received from the seller, consisting of $5.3 million for free rent and $1.1 million for committed future tenant improvements under certain existing leases, from the $152.3 million ($310 per square foot) gross price stated in the contract. The acquisition was funded with proceeds from its ATM programs, borrowings under its revolving credit facility and available cash.
Ed Fritsch, president and chief executive officer of Highwoods, stated, “This investment garners us one of the best Class A office buildings in the southeast, a new building with a well-diversified rent roll that we acquired at a 10 percent discount to replacement cost. The building has an average remaining lease term of 10 years and no lease expirations until 2017, when less than 24,000 square feet is scheduled to expire.”
The 29-story, class A Two Alliance Center encompasses 492,000 square feet and is serviced by a structured parking facility. Located in the heart of Atlanta’s Buckhead submarket, it offers a significant competitive advantage due to its easy access to Georgia 400 and Peachtree Road. It is also less than a half-mile walk from a MARTA Rail Station, and a publicly funded pedestrian bridge will cut this distance in half upon its projected completion in late 2013.
The building offers a number of amenities including conference facilities, a fitness center and a full-service bistro. In addition, Two Alliance Center is within walking distance to both Phipps Plaza and Lenox Square Mall, two upscale malls, as well as a number of luxury hotels, including the Ritz-Carlton and the Mandarin Oriental. According to Atlanta Business Chronicle, former owner Tishman Speyer leased up the tower during a period of aggressive concessions in the past few years, as it and several other developers were trying to fill five new office towers during the worst of the economic downturn.
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