This Week's Atlanta Deal Sheet: Highwoods, Brand Move Forward On Office-To-Resi Conversion

Highwoods Properties' office-to-apartment conversion in the suburbs is roaring ahead with a development partner and a tax incentive.

Highwoods and Brand Properties are seeking bank financing to transform 1800 Century Blvd., an 18-story, glass-encased office tower off Interstate 85 in Brookhaven, into a 289-unit apartment building, The Atlanta Journal-Constitution reports. Decide DeKalb Development Authority, the economic development arm of DeKalb County, approved a 10-year, $6M property tax break this year to help spur the conversion, according to the AJC.

Now Highwoods and Brand, which have previously partnered to develop the boutique 135K SF office building at 2827 Peachtree Road, will seek a $59M construction loan and $32M in equity investments to finance the project by the end of 2025, the AJC reported.

“This is a very intriguing opportunity,” Brand President Michael Hoath told the Decide DeKalb board at its Thursday meeting. “We’ve looked at 30-plus office-to-residential opportunities in the Metro Atlanta area, and this is the most compelling.”

The move comes more than a year after Highwoods first floated the idea of 1800 Century’s conversion during an earnings call. At the time, the Georgia Department of Revenue warned Highwoods that it would either move from the nearly 50-year-old building where it had been for more than 20 years or greatly reduce its footprint.

The department vacated the tower this year, the AJC reported. The developers are planning a mix of unit sizes, with a fifth of the apartments reserved at below-market rents.

DEVELOPMENT

Alliance Residential Co. delivered Prose Gainesville, a 300-unit apartment complex at 900 Mountaintop Ave., more than 60 miles north of Downtown Atlanta in Hall County. Alliance purchased the 35-acre site last year to begin construction on the project, with units ranging from 810 SF to 1,180 SF.

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Portman Holdings is under contract to purchase Brookside office park in Alpharetta and plans to tear down one of the two sister office buildings to make way for 350 apartments, 90 townhomes and 60K SF of retail. Bridge Commercial Real Estate is selling Brookside I and II, which it purchased in 2021 for $41M.

ASSIGNMENTS

FullG Capital has tapped Newmark’s Craig Kalinowski, Stewart Thrash, Brad Kirschner, R.J. Zurak and Lindsay Kalski to lease 1375 Peachtree St., the 410K SF office building formerly known as Pershing Point Plaza.

FullG has already undertaken a multimillion-dollar renovation project and has landed a full-service French restaurant and a chef-driven food hall with three vendors, both opening next year. According to Newmark’s marketing site for the building, 175K SF is vacant. 

FINANCING

InterContinental Hotels Group refinanced the Voco The Darwin Hotel in the Old Fourth Ward of Midtown with a $17.9M senior loan. Arriba Capital obtained the financing for the 111-room hotel, which IHG converted earlier this year. 

LEASES

Banking firm SouthState Corp. leased 87K SF at Prominence Tower in Buckhead, a 19-story, 440K SF office tower in Buckhead, with plans to move from Resurgens Plaza nearby. Partners Real Estate’s Andy Sumlin and Aileen Almassy represented the landlord, New York Life Real Estate Investors, while JLL’s Josh Hirsh and Patrick Baughman worked on the deal for SouthState.

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Beauty retailer Sephora, apparel retailer High Country Outfitters, Rena’s Italian Fishery & Grill, fitness studio Bodyrok and veterinarian clinic Petfolk are leasing space at the Medley mixed-use development in Johns Creek. 

Toro Development Co. already tore down one of two office buildings on the site to make way for its $560M project at the corner of McGinnis Ferry Road and Johns Creek Parkway, which will include 150K SF of retail, a 175-room boutique hotel, 110K SF of offices, 750 apartments, 133 townhouses and a 25K SF plaza. Last month, Toro received a $158M construction loan from Banco Inbursa for the first phase, along with an unspecified equity investment from Ascentris.

PERSONNEL

Lincoln Property Co. hired industry veteran Bo Jackson as senior vice president for the firm’s third-party advisory services, the Atlanta Business Chronicle reported. Jackson was previously a partner with Greenstone Properties and also served as senior managing director at Transwestern.