The owner of the last top-tier office tower to open in downtown Atlanta in almost 20 years forfeited the property to its lender.
An affiliate of Lone Star Funds on March 13 filed a deed-in-lieu of foreclosure on 55 Allen Plaza in the Superior Court of Fulton County, Georgia, according to public records. The document identifies the lender as Phoenicia Real Estate Holdings XI, an affiliate of Sound Point Capital Management, and it values the property at $57.8 million.
Lone Star Funds declined to comment and Sound Point did not respond to requests for comment.
The downtown Atlanta office market has struggled for years as tenants have flocked to other districts, namely Midtown, Central Perimeter and Alpharetta. In another indication of the downtown office market’s weakness, CIM Group delayed plans to construct office buildings at its $5 billion Centennial Yards project and instead focus on residential and retail in the early phases.
An affiliate of Lone Star Funds bought 55 Allen Plaza in March 2020 for $80 million. The sellers were the Teachers Retirement System of Illinois and Lincoln Property.
Lone Star Funds participated in the acquisition of office towers earlier this year in Denver and the Miami market. The Dallas-based asset manager paid $132.5 million for 17th Street Plaza in Denver and a partnership group that included Lone Star acquired Bank of America Plaza at Las Olas City Centre in Fort Lauderdale, Florida, for $221 million.
Barry Real Estate developed the first phase of Allen Plaza in 2007 and secured accounting and consulting firm EY as lead tenant. Although EY continues to occupy 110,396 square feet, or about a third of the building, 55 Allen Plaza is about 66% leased in total, according to CoStar data. The second-largest tenant is architecture firm ASD/SKY with 18,991 square feet.