Carl Icahn-Owned AT&T Building Could Prove Ideal For Amazon HQ2
The AT&T tower in Midtown, which the telecommunications giant just announced plans to empty could present a big opportunity for two huge names: Amazon and Carl Icahn.
Amazon recently named Atlanta as one of the 20 finalists for its $5B HQ2 project, one that could see the retail giant occupy 8M SF of offices. But Amazon also said that it would need at least 500K SF of office in the winning location right away.
This could prove a possible boon to billionaire businessman and real estate mogul Carl Icahn, whose White Plains, New York-based Icahn Enterprise Holdings owns the 49-story AT&T Building at 675 West Peachtree St., even as its marquee tenant announces plans to vacate it.
On Tuesday, AT&T announced that it would empty its 1.2M SF space and the neighboring AT&T support center building in Midtown, along with its offices at 1055 Lenox Park Blvd. and 575 Morosgo Drive, both of which are in its Buckhead campus near Lenox Square, and consolidate its employees into other AT&T-occupied buildings throughout the city. In all, AT&T could be dumping a combined 2.5M SF of office in both Midtown and Buckhead by early 2020, CoStar reported.
According to city records, the AT&T Building is owned by IEP Peachtree LLP, which has an address with Icahn Enterprise Holdings, according to state records.
Baile said he is not aware if Icahn Enterprise Holdings, which has owned the tower since 2008, has it up for sale at the moment. Since Amazon would need immediate office space to start up its operations in the winning location — and it takes more than 30 months to plan and develop a new project — this could afford both Icahn and Amazon an opportunity, Baile said.
Icahn did not return calls as of press time.
This is not the first time Baile has championed Midtown as an ideal place for Amazon HQ2. He previously told Bisnow that there are a handful of sites in the area that could accommodate an Amazon campus.
AT&T is expected to move employees to 754 and 725 West Peachtree streets, called Midtown I and II, or other buildings around the Lenox Park campus, including 1025 Lenox Park Blvd and 2180 Lake Blvd., according to a memo obtained by Bisnow.
Midtown emerged as one of the strongest and most sought-after office markets in Atlanta last year, with about 8% vacancy in its 22.8M SF of office. More than 250K SF was absorbed by tenants last year, according to a Colliers International report, and it commands some of the highest office rents in the metro area, at $33/SF.
“A million square feet coming back to the market will certainly have a softening effect on the dynamic of that market,” Moss said.
Despite that, Baile said he doubted that the new space would affect plans by a handful of developers to build new office, especially if Atlanta's Amazon dream falls short.
Selig Development is attempting to pre-lease a 30-story office project it plans to develop at 1105 West Peachtree St., a mixed-use project that could also include a 180-key hotel and 175 residential units. Hines Interests also announced that it planned to break ground without any pre-leasing on its T3 timber-framed office project at Atlantic Station in Midtown.
“[The AT&T Building] is for a different type of user," Baile said. "It's a B product, it's not a Class-A product."