News
LENDERS BALK, MORRIS MANNING STAYS
July 14, 2011
| That was fast. News broke late yesterday that Morris Manning & Martin inked a ?definitive agreement? to renew its office lease at Atlanta Financial Center through 2026, remaining fixed in Buckhead with 125k SF, reversing course on plans to move to Midtown instead. | |
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| In a statement, Dewberry Capital—which lost out on the deal for its Campanile building—says its lender (a syndicate of credit unions) refused the ?financial concessions and lease language modifications required by Morris, Manning & Martin.? In fact, the company states that the TI and free rent package far exceeded$75/SF and an LOI was never actually signed. Its lenders—which did not include Dewberry's Campanile purchase lender, Georgia's Own Credit Union—balked at the size of the package, especially since both bank and Dewberry officials feel the office market would improve by 2012, resulting in more favorable lease terms. Dewberry says another complication was having Morris Manning sign a lease prior to the completion of major renovation work and the law firm "required extensive risk mitigation clauses in the lease," which wasn't acceptable to the project lenders. For its part, Morris Manning's Louise Wells said in a statement ?the terms significantly and materially changed during the course of finalizing our Campanile negotiations.? The law firm says it will begin renovation work on its space ?immediately? with anticipated delivery in 2012. | |
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| Morris Manning's reversal means that, for now, Campanile (seen here) will be without an anchor tenant on the top floors. Although, as we reported last month, Dewberry is still in talks with SunTrust to locate 75k SF of its office there (with its marquee on the building) from its current offices at 25 Park Place. Dewberry's Ridr Knowlton released a statement saying Dewberry hadn't planned to actively market Campanile until it finished the renovation in 2012. But after it bought the building, early interest prompted its execs to pursue Morris Manning. A counteroffer made to Morris Manning was rejected by the law firm. ?We think very highly of Morris, Manning & Martin, and their senior leadership, and are disappointed that they will not be relocating to our project in the heart of Midtown,? said Ridr. ?With regard to the top floors of the building, we will now follow our original strategy of focusing on the renovation first, and then delivering Atlanta's premier space next year.? |
