Real Estate Notebook: CBRE a frontrunner; Pershing Point Plaza sells – Atlanta Business Chronicle

Carl Icahn is moving aggressively to find the next big tenant for his real estate affiliate’s 46-story Midtown landmark, known as the AT&T tower.

CBRE Group Inc. is a front-runner to win the leasing assignment for Icahn’s building, which stands just south of Technology Square, an area seen as a top contender for Amazon’s $5 billion HQ2 project. CBRE could not comment. No agreement has been signed, sources said.

Icahn’s team has been a frequent visitor to Atlanta over the past three months, according to sources with knowledge of the activity. What’s unusual is how quickly the tower’s landlord is moving to find new tenants, even though AT&T will not officially vacate its remaining office space until mid-to-late 2019.

It suggests Icahn may be in preliminary discussions with a new tenant, though that remains to be seen.

Atlanta Business Chronicle already reported AT&T’s plans to vacate the building at 675 West Peachtree St., a landmark building on the Atlanta skyline formerly known as the Southern Bell Tower. The building, owned by an affiliate of billionaire investor Icahn, is the largest of several potential redevelopments emerging south of Tech Square and one of the most intriguing contenders for HQ2. In fact, the area around the tower, properties between 4th and West Peachtree streets, the Downtown Connector, and North Avenue, could allow for up to 10 million square feet of new development.

One clear advantage Midtown has over sites such as downtown’s “The Gulch” is that Tech Square has been undergoing a development boom for the better part of a decade. It was originally spurred by Georgia Tech’s decision to expand its campus eastward across the Downtown Connector into the heart of Midtown at 5th Street.

Tech Square has since emerged as a center of gravity for technology companies whose employees want to work in one of the South’s most vibrant urban innovation districts. In recent years, Tech Square has continued to expand southward along West Peachtree toward North Avenue.

AT&T will make available almost 2 million square feet of office space when it completely exits 675 West Peachtree, one of the central pieces for the area’s continued development. Whatever tenant or tenants eventually replace AT&T, the tower faces an immense and complex renovation.

MetLife plans 25-story tower, apartments at 17th Street

MetLife Inc. has submitted plans for the first phase of a nearly 9-acre mixed-use project on the northern edge of Midtown, including a 350-unit apartment building and roughly 25-story office tower.

The project at 1295 Spring St. is being led by MetLife Investment Management, the asset management business for the insurance giant. Jones Lang LaSalle Inc. is overseeing leasing and project management.

MetLife began assembling land at 17th, Spring and West Peachtree more than a decade ago, and long-range plans for the site have been in the news off-and-on over the years. Now moving forward with the project, MetLife recently submitted proposals for the first phase to the Midtown Alliance, which helps guide development for the Atlanta neighborhood known for its urban, walkable environment and cultural landmarks such as the Fox Theatre and Woodruff Arts Center.

Phase one includes the 500,000-square-foot office tower, the apartment building, 87,000 square feet of retail and a proposed hotel. It would focus on the east side of the project along 17th, Spring and West Peachtree. It could be presented to the Midtown Development Review Committee this month or next.

Pershing Point Plaza sells for $75M

Pershing Point Plaza, the building that landed health-care giant Kaiser Permanente’s nearly 900-employee Midtown IT campus, has sold for $75 million, according to sources familiar with the transaction.

The Dilweg Cos. confirmed that it bought the 409,579-square-foot project at 1375 Peachtree St. It did not release the price, but sources said it paid about $183 a foot for the project.

California State Teachers Retirement System had owned the property, according to Fulton County. A CBRE Inc. team of Will Yowell, Justin Parsonnet, Jay O’Meara and Ryan Reethof represented the official seller, CBRE Global Investors, in the transaction. CBRE Global was the asset manager on behalf of CalSTRS.

The building, which lured Kaiser Permanente because of its proximity to Georgia Tech and MARTA’s Arts Center station, is still just 59 percent leased, making it a “fantastic value-add asset in the heart of Midtown,” said Anthony Dilweg, CEO of The Dilweg Cos.

Other major tenants include Huge, Echo Global, and CMGRP. Pershing Point has been associated with the Midtown tech center for years since serving as the headquarters for EarthLink.

Dilweg plans to invest more than $10 million into the project to improve the building’s exterior, mechanical systems, common areas and tenant amenities. The Durham, N.C.-based real estate company has grown its Atlanta office portfolio to more than 2.3 million square feet. It owns five other Atlanta office properties including 101 Marietta St. in downtown, The Pointe in Central Perimeter and Royal Centre in Alpharetta.

The firm opened its Atlanta office in early 2015.

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