Cousins Properties Regains Ownership of Atlanta High-Rises With $503M Buy

With JLL's assistance, investors advised by J.P. Morgan Asset Management sold their 50 percent interest in the two office towers, back to the developer.
Terminus 100. Image via Google Street View
Terminus 100. Image via Google Street View

Terminus 100 and 200, two office high-rises totaling 1.2 million square feet within the Terminus mixed-use destination in Atlanta’s tony Buckhead area, are back under the full ownership of their developer. Institutional investors advised by J.P. Morgan Asset Management, relying on the advisory services of JLL, sold their 50 percent interest back to Cousins Properties in a $503 million transaction.

Located at 3280 Peachtree Road, the 27-story Terminus 100 is an approximately 650,000-square-foot building that encompasses 585,000 square feet of office space and 65,000 square feet of street-level retail offerings. Terminus 200, a roughly 580,000-square-foot structure standing 25 stories at 3333 Piedmont Road NE, features 560,000 square feet of office space and 20,000 square feet of ground-floor retail space.

Designed by Duda-Paine Architects, Terminus spans across 10 acres and encompasses the LEED Silver certified Terminus 100 and 200 office buildings, the 137-unit 10 Terminus Place residential condominium high-rise and an aggregate 92,000 square feet of retail. Cousins developed Terminus 100 in 2007 and co-developed Terminus 200 with Prudential in 2009 before recapitalizing the tower with Morgan Stanley Real Estate Investing in 2010.

JLL, which inherited the Terminus deal from HFF prior to its acquisition in July 2019, did not disclose the details of the transaction’s origins. However, as noted in Cousins’ third quarter earnings report, terms of an agreement between the developer and J.P. Morgan following their joint venture acquisition of Terminus 100 and 200 in 2013 allowed either party to trigger the sale process, subject to a right of first offer.

Investors continue to eye Atlanta

Had the right of first offer not been exercised in the Terminus office transaction, the two Class A office properties would most likely have found a warm reception on the open market. “Atlanta, similar to much of the Southeast, continues to experience excellent underlying fundamentals with population, economic and job growth driving absorption and increasing rental rates. These factors, along with excellent liquidity in the debt markets, continue to drive demand for investors to acquire well-located, quality office projects,” Richard Reid, senior managing director with JLL, told Commercial Property Executive.

The Buckhead submarket has seen its share of large office trades in 2019. In the third quarter, KKO acquired a majority interest in the approximately 631,800-square-foot Salesforce Tower for $205 million and Rubenstein Partners LP and Monarch Alternative Capital purchased the two-building Lindbergh Center, a 1.1 million-square-foot asset, for $187 million. Earlier this year, New York Life Real Estate Investors, acting on behalf of a joint venture between New York Life Insurance Co. and Ilmarinen Mutual Pension Insurance Co., bought the 433,000-square-foot Prominence in a deal valued at $166 million.