Lender Forecloses On Cumberland/Galleria Office Tower At 70% Value Drop
A New York-based lender has taken back the keys to 2000 RiverEdge Place at a 70% drop in value from the original loan.
The Lightstone Group foreclosed on the 240K SF high-rise overlooking Interstate 75 in the Cumberland/Galleria submarket from MainStreet Capital Partners via an $8M credit bid, according to Cobb County records.
MainStreet purchased the tower in 2016 for $24M. Six years later, Lightstone provided a $27M mortgage to MainStreet. Lightstone advertised to foreclose on 2000 RiverEdge Place last month after MainStreet missed payments on the loan, Bisnow previously reported. The loan was set to mature on Aug. 31.
MainStreet executives did not return messages seeking comment as of press time. A spokesperson for Lightstone declined to comment.
The largest tenant at 2000 RiverEdge is health insurance giant Aetna, which occupies a little more than 40K SF and has its logo atop the building. Hospice operator Vitas Healthcare leases 24K SF, according to a CoStar report obtained by Bisnow. The building's asking rents are between $22 and $26.50 per SF, below the submarket's average of $28 per SF, according to Colliers.
Bull Realty founder Michael Bull told Bisnow that the steep dive in the per square foot price from $112.50 to $33 could provide a big opportunity for potential buyers, especially since the tower is more than 60% leased.
“That’s a bargain number. It should be worth more than that at that occupancy,” Bull said. “We’re seeing a lot of larger buildings like that, that are half empty, trading at $60 to $70 SF range.”
Bull, who isn't involved with the 2000 RiverEdge property, said the loan likely weighed on MainStreet’s ability to offer competitive leases to potential tenants.
Potential buyers may have difficulty getting financing. Higher interest rates have made lenders skittish on commercial real estate deals — especially for suburban office assets — and economic uncertainties around President Donald Trump’s trade war are causing even more fear in recent weeks, Bull said.
“I think buyers are saying it’s a great time to buy,” he said. “As this shakes out, we’re seeing some [lenders] taking a pause.”
Trouble is also brewing for the owners of RiverEdge Summit, the twin nine-story office buildings at 1500 and 1600 RiverEdge Parkway. Synovus Financial Corp. filed to foreclose on its $43M loan secured by the 457K SF office park owned by Opal Holdings, according to records published in the South Fulton Neighbor on April 9.
Opal purchased RiverEdge Summit in 2021 from Ares Management for $90.2M, according to data in the real estate database Reonomy. Opal took out a $45M loan from Synovus at the time. The loan matures on April 22, according to Reonomy.
The towers are set to be sold at a public auction on the Fulton County Courthouse steps on May 6.
The pending foreclosure is just the latest example of distress for owners of Atlanta office properties.
The 2.2M SF Piedmont Center office complex in Buckhead has been scheduled for multiple foreclosure auctions, including one next month. In March, Lone Star Funds surrendered the 14-story 55 Allen Plaza building in Downtown Atlanta to its lender, Sound Point Capital Management, in a deed-in-lieu-of-foreclosure transaction that valued the building at $57.8M, Bisnow previously reported.
And an affiliate of Wells Fargo acquired the Westside Collective, four adaptive reuse projects in West Midtown and Upper Westside, in a foreclosure sale last month for a value of $56M from Crestlight Capital. Wells Fargo foreclosed on the previous $84M loan tied to the properties.
