Cobb County Office Sells To Apartment Operator Following Default
An Atlanta firm best known for its apartment properties acquired a Cobb County office building in a lender-enabled short sale.
Braden Fellman Group purchased One Tower Creek, a 100K SF building at 3101 Tower Creek Parkway in the Cumberland/Galleria submarket, for $6.8M, said Casey Keitchen, a senior managing director at Newmark who brokered the sale.
The price is a 40% drop from the last time the building sold, which was in 2004. It is also 23% lower than what its previous owner, an affiliate of Mivne Group, was seeking when it listed the building last year for $8.8M.
While Braden Fellman does own some office space, One Tower Creek is the firm's first foray into a traditional office building of this size, said Andrew Braden, a partner with the firm.
The reason? It was too good a deal to pass up, Braden said.
"It's really just a basis story," he said. "We bought it for $68 a foot, partially tenanted."
Braden Fellman operates several apartments and mixed-use projects in the metro area, including Mattress Factory Lofts in Grant Park and Abrams Fixtures in Adair Park, which has 60K SF of office space, according to the firm's website.
Its newest property, the glass-encased, wedge-shaped seven-story building at the nexus of Interstates 75 and 285, is just over 20% leased after its anchor tenant, Procure Analytics, vacated its 35K SF at the start of 2024.
Tower Renaissance LLC, an affiliate of Tel Aviv, Israel-based Mivne Group, purchased One Tower Creek 21 years ago for $11.4M but defaulted last year on the building's $7.9M CMBS loan. The loan was originated in March 2015 to sponsors Fishman Holdings Canada Property Investment Trust XI and Industrial Buildings Corp. Ltd., according to the Morningstar Credit database. Industrial Buildings later changed its name to Mivne.
German American Capital Corp. originated the loan, then sold it to the CMBS trust COMM 2015-CCRE23. The loan was assigned to special servicer Mount Street in 2023 when Mivne alerted its lender that it would no longer be able to cover the property's debt service after Procure Analytics vacated, according to Mount Street's servicer commentary.
Mivne had attempted to modify the loan, but after the special servicer pushed to have a receiver take over the building's operations, the sides agreed to pursue a sale, according to the servicer commentary.
Mivne tapped Keitchen to market the property for sale last June. The county appraised the property at $10M in 2024.
The ultimate $6.8M price was more than $1M below the loan balance, resulting in a discounted payoff to the CMBS trust.
While the office market remains sluggish, Braden said the previous owner was unable to fund tenant improvement allowances and lacked the capital to pursue deals. Braden said the firm will be offering competitive deals and is already in talks with a tenant to occupy 15K SF.
“This is a beautiful building," Braden said. "It should be an 80%-leased building."
