Trophy Atlanta Office Property Trades for $147M
By Barbra Murray, Contributing Editor
Two Alliance Center, a premier office property in Atlanta, has come under new ownership. Tishman Speyer developed the 492,000-square-foot building in 2009 and now Highwoods Properties, Inc. has acquired it for $146.7 million or $298 per square foot, as the company’s all-in investment, which includes $0.8 million of planned near-term building improvements.
Two Alliance includes 29 stories above Atlanta’s trendy Buckhead submarket, offering commuters a location within close proximity to a MARTA station and easy access for drivers to the well-traveled Georgia 400. Global aluminum products manufacturer Novelis Inc. and international professional services firm Marsh & McLennan Cos. are the lead tenants at the high-rise, occupying a respective 125,200 and 123,500 square feet. In terms of maintaining names on the tenant roster, Highwoods will likely be safe, at least until 2017, when a mere 24,000 square feet is scheduled to expire.
Class A offerings, a top location and an enviable tenancy–Two Alliance is quite an asset and Highwoods snapped it up at a markdown.
“This investment garners us one of the best Class A office buildings in the southeast, a new building with a well-diversified rent roll that we acquired at a 10 percent discount to replacement cost,” said Ed Fritsch, president and CEO of Highwoods.
As commercial real estate services firm Studley notes in a second quarter report, Tishman had hoped to garner approximately $350 per square-foot, or $172.6 million. In the end, the developer walked away with roughly $309 per square-foot. Had Highwoods’ wish come true, the disposition of Two Alliance would have broken the record for the sale of a Buckhead office property, which was set in early 2011 when Parkway Properties Inc. picked up 3344 Peachtree for $167.3 million, or $346 per square-foot.