An Atlanta real estate investor is pitching an unusual arrangement for a joint venture partner in one of the few historic office towers in downtown Atlanta.
Joel & Granot Commercial Real Estate owns the Healey Building at 57 Forsyth St. in downtown Atlanta. The 16-story, Gothic Revival building opened in 1914 and is clad with stone and terra cotta. It’s a short walk from Georgia State University, federal and state courthouses and the state Capitol.
Joel & Granot wants to find a company or organization to lease, for at least seven years, a minimum of 11,505 square feet in the office portion of the building. Full-service rent is $22 per square foot per month, equating to about $253,000 yearly for the minimum.
In exchange, the new tenant would also be given an ownership stake in Healey. The size of the ownership stake would be determined by the amount of the new partner’s down payment, Alan Joel, a principal at Joel & Granot, told CoStar News.
Joel said his firm is deploying the unusual tactic because many businesses are leaving downtown Atlanta for other parts of the city.
“We’re trying to make it possible for businesses to come back downtown,” Joel said.
A lease would also provide a partner with access to the building’s cash flow, a steady stream of income generated by the existing roster of office and retail tenants, Joel said.
The downtown Atlanta office market has struggled for years. The 55 Allen Plaza office tower is the only Class A office property completed downtown since 2007.
Peachtree Center, the largest contiguous office development in the central business district, was sold in a foreclosure auction in 2022, although the new owners completed several new leases last year.
Even with those headwinds, downtown Atlanta has plenty of things in its favor. Two professional sports teams, the Atlanta Falcons and Atlanta Hawks, play their home games at downtown stadiums. The 1.5 million-square-foot Sam Nunn Federal Center is home of offices for several federal agencies. The 50,000-student Georgia State University occupies multiple buildings nearby.
But downtown Atlanta’s average rent for offices is $29.60 per square foot, lower than Midtown’s average of $42.61 and the Central Perimeter market’s average of $30.41, according to CoStar data.
The Healey Building stands out because of downtown’s low supply of historic buildings that have been renovated for modern use. Joel & Granot completed a major renovation in 2019.
The Healey Building has about 57,100 square feet used now as office, retail and storage space, Joel said. The potential new partner would be asked to lease 11,505 square feet of that space. The top 14 floors of Healey are residential condos and are not for sale.