Lender Taps CP Group To Take Over Piedmont Center Out Of Foreclosure
The firm leading the redevelopment of CNN Center is now poised to take the driver's seat in the turnaround of another prominent Atlanta property.
Austrian investment firm Bawag Group has held a stake in the debt backing the 2.2M SF Piedmont Center office park, and it is now expected to buy out the other stakeholder and bring in CP Group as a co-owner of the property, a source familiar with the talks told Bisnow.
The Ardent Cos., which is headquartered at Piedmont Center, has owned the entirety of the 14-building complex since 2021. But it defaulted on a $330M floating-rate loan tied to the 46-acre property, and one of its lenders, Morgan Stanley Mortgage Capital Holdings, filed to foreclose on the campus in January. Bawag owns a slice of the debt, the source said.
The scheduled foreclosure auction has been delayed repeatedly, but it is scheduled for June 3. It is unclear if Bawag is negotiating a purchase independent of the auction or if it plans to submit a credit bid on the steps of the Fulton County courthouse.
Bawag and CP Group's pending deal to acquire Piedmont Center was first reported by the Atlanta Business Chronicle.
Holland & Knight partner Matthew Joe, who is representing the lenders, declined to comment. CP Group also declined to comment. Bawag and Ardent didn't respond to messages seeking comment.
A JLL Capital Markets team led by Mike McDonald and Richard Reid has been searching for buyers on behalf of Piedmont Center's lenders. The campus is 63% leased with a weighted average of 4 years left on the tenants' leases, according to a JLL marketing page for the property. A 2020 rezoning would allow CP Group to redevelop some of the campus into residential uses.
Ardent acquired Piedmont Center over a five-year period capped by its purchase of Buildings 5 through 8 in 2021. It spent more than $300M to acquire all the pieces, including paying $58M to Lone Star Funds in 2019 for the 18-story Piedmont Center 14.
In November 2023, BlackRock, a minority stakeholder in Ardent’s debt at Piedmont Center, threatened to seize the complex, Green Street reported at the time.
CP Group, which purchased the Atlanta CRE icons CNN Center in 2021 and Bank of America Plaza in 2022, has been searching for other assets to purchase in the Southeast. It is underway with redeveloping CNN Center as a mixed-use destination called The Center.
While market players say Atlanta's office market has started to bounce back from its pandemic nadir, distress transactions are becoming more common. The 12-story 2000 RiverEdge Place tower in Cumberland sold to its lender in a foreclosure auction last month. In March, Lone Star surrendered the 14-story 55 Allen Plaza building in Downtown Atlanta to its lender, Bisnow previously reported.
