Midtown’s Promenade Two Trades Owners Once More
- Dec 13, 2011
The iconic Promenade Two office building in Midtown Atlanta has changed hands for the second time in the past month, as Atlanta-based Cousins Properties recently acquired the 38-story building for $134 million in cash. On November 24, Promenade Two was officially bought by current seller Beacon Capital Partners, LLC from Sydney, Australia-based Charter Hall Office REIT. It is the third U.S. asset that traded within a $1.7 billion portfolio trade that marks the Australian REIT’s departure from U.S. soil. According to real estate observers, Beacon Capital has opted to sell the recently acquired trophy asset because Atlanta is not one of its core markets.
Cousins Properties paid $134 million in cash for the 774,000-square-foot office building, an acquisition that the company plans on funding on a leverage-neutral basis. “Promenade Two provides us with a unique opportunity to acquire a trophy asset well below replacement cost and with the potential for exceptional value creation,” said Larry Gellerstedt, president and chief executive officer of cousins. “We now have a trophy offering in all three urban submarkets along the Peachtree Corridor, furthering our strategic goal of upgrading the portfolio as we recycle out of older, stabilized assets.”
The Class A Promenade Two has a high-quality base with no material expirations until 2016, but it is currently 58 percent leased due to its anchor tenant recently vacating. As reported by the Atlanta Journal-Constitution, this acquisition follows Cousins Properties’ sale of Midtown’s One Georgia Center for $48.6 million earlier this year. Cousins Properties now has trophy towers in all the intown Atlanta office markets along Peachtree Street, from Buckhead (where it developed its three-building mixed-use Terminus complex at Peachtree) and Piedmont, to downtown, where it has the 50-story One Ninety One Peachtree Tower.