191 Peachtree Loan Flagged Due To Dwindling Tenants And Revenue

When Banyan Street Capital paid $268M for the iconic 50-story 191 Peachtree Tower in 2016, CEO Rudy Touzet called the 50-story skyscraper “the market’s landmark office building.”

Banyan Street and joint venture partner Oaktree Capital Management obtained 191 Peachtree from Cousins Properties when the 1.2M SF tower was more than 90% leased.

A decade later, 191’s cash flow is down more than 30%, and its occupancy sits at 58%. 

These factors have prompted Morningstar Credit to place an $80M loan on the property on a watchlist as of March. Also, Fitch Ratings downgraded a Morgan Stanley CMBS pool in part due to the loan’s looming maturity in November. 

According to Morningstar Credit, Morgan Stanley originated a $175.5M loan for the building at 3.73% in 2016. The loan was subsequently divided into three separate CMBS tranches, according to Morningstar, with the $80M tranche being the largest.

Savills Managing Director Brian Day questioned whether Banyan Street could find another lender to refinance its loan.

“I’m not sure it’s worth the debt right now,” Day said. “It’s a great classic, old building, but if I am a major law firm or major tenant, I’m not sure it’s on my list. I’m not sure any Downtown building is.”

The Federal Reserve kept interest rates steady this month at between 3.5% and 3.75%. Interest rates today on commercial mortgages can be in the high 5%-to-7% range, according to Commloan.

The loan on 191 Peachtree is part of a wave of mortgages in the CMBS market facing maturities this year. In January, Morningstar estimated that more than $100B in fixed- and floating-rate loans will come due throughout 2026, and that more than half of those loans will not repay at the date of maturity. 

Local commercial real estate analysts say 191 Peachtree may be fighting an uphill battle with other Downtown Atlanta office properties attempting to lure tenants as they are increasingly looking in midtown or elsewhere. 

This month, Fitch downgraded the Morgan Stanley Capital I Trust 2016-UBS12 mortgage pool to a loss of nearly 20% of the remaining balance. Previously, that loss was pegged at 17.7% of the remaining balance.

Twenty-two of the loans in the pool — or nearly 61% — were flagged by Fitch as loans of concern. This included the loan attached to 191 Peachtree, the third largest among the pool.

The biggest occupancy blow for 191 Peachtree occurred in 2023, when Deloitte vacated its 262K SF office there in favor of a much smaller space at the nearby Promenade Tower. And last year, its largest tenant, law firm Ogletree Deakens, inked a new lease at the nearby Bank of America Plaza with plans to vacate its 52,500 SF space.

A Banyan Street spokesperson declined to comment. 

Banyan took in $30.7M in revenue last year, according to Morningstar, down from $34.9M in 2024 and $38.7M a year before that. During that period, 191 Peachtree’s net operating income fell from $21.9M to $14.1M, and its occupancy dropped from 84% to 58%.

“It seems that the property never recovered from the loss of Deloitte,” Morningstar Vice President Mike Magerman said in an email to Bisnow. “Scheduled lease expirations in 2026 and 2027 may further complicate efforts to refinance before the loan matures in November 2026.”

While overall office leasing improved in metro Atlanta in the first quarter, the activity failed to benefit Downtown Atlanta, according to Partners Real Estate. The downtown submarket tallied a 93K SF negative net absorption for the quarter. In contrast, midtown posted a positive net absorption of more than 345K SF during the first quarter.

CBRE Senior Vice President David Todd said tenants may now be eying 191 Peachtree as a value play for Class-A space. The average Class-A asking rent in Downtown is nearly $32.50 per SF in the first quarter, according to Partners. The current tenant lineup at 191 Peachtree paid an average of $29.40 per SF during that time, according to Morningstar. 

“It’s still one of the nicest buildings in Atlanta. The question is always Downtown versus one of the other submarkets,” Todd said. 

According to Morningstar, the borrowers were current on payments on the loan through this month, but the agency placed the loan on a watchlist given its pending maturity. 

According to Fitch, Banyan Street was planning to spend $4.5M to upgrade common areas. The firm announced last year that it would create a new “front porch” to 191 Peachtree to renovate the seven-story atrium lobby and integrate the public spaces and the connected Ritz-Carlton Hotel, Urbanize Atlanta previously reported. 

Banyan Street is also offering building signage for a marquee tenant, according to Urbanize.