A Boston office investor is beefing up its presence in Midtown with a major Class-A buy.
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Sources tell us Franklin Street Properties is under contract to buy Pershing Park Plaza, the eight-story, 160k SF office building on the pin corner of the split between Peachtree and West Peachtree streets in Midtown. The company will buy it from ELV Associates. While Franklin Street did not identify the asset in a recent earnings call, CEO George Carter (here) revealed plans by the company to buy an "urban infill Class-A office property" in Midtown for $45.5M.
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This would mark Franklin Street's second major Midtown purchase. In 2013, the firm bought 999 Peachtree, the 621k SF tower, from Jamestown Properties for $158M. As for Pershing Park (here), the building is mostly full, with the Jones Day law firm occupying most of the property. Jones Day's HQ lease runs through 2020. But Colliers International, which leases the building and has been tapped to market it for sale, notes in a flier that current lease rates are 10% below the average Midtown office ask, and by the time Jones Day's lease expires, it could be off by as much as 30%. "Therein lies superb upside potential," Colliers officials state in the document. Franklin Street officials state the transaction should close by the end of August 2016.
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