New midtown office tower likely to start rising in July
Atlanta Business Chronicle - by Tony Wilbert Real Estate Editor
Trammell Crow Co. has assumed the pole position in its race to be the first out of the ground with a new office tower in midtown.
The Dallas-based real estate company has lined up two financial partners for The Proscenium, a 24-story, 525,000-square-foot building it plans to develop at the southwest corner of 14th and Peachtree streets. Earlier this month, Trammell Crow extended its contract to buy the 2-acre site, now home to Gorin's 14th Street Diner.
Trammell Crow plans to start construction on the building in July and should complete it by January 2001, said Mike Shelly, a company director and broker in charge of leasing The Proscenium.
Cigna Corp. will help finance the $80 million to $90 million project, and Bank of Nova Scotia will provide the construction loan, according to real estate sources.
Also, Trammell Crow has secured commitments from major tenants, including the Atlanta office of Richmond, Va.-based law firm McGuire Woods Battle & Boothe LLP and WestWayne Inc., an advertising firm. McGuire Woods is interested in The Proscenium's top floors.
With financing and preleasing agreements in hand, the tower is likely to be built.
Shelly said he could not comment on either the financing or the preleasing commitments. He did, however, offer a general statement about leasing activity: "Trammell Crow Co. has extended the contract to buy The Proscenium site from AT&T based upon preleasing commitments from four tenants for approximately 35 percent of the building."
Low vacancy rate
Trammell Crow and Atlanta-based Pope & Land Enterprises Inc. are entangled in a hot battle to be the first -- and perhaps the only -- developer to start building a high-rise office this year on 14th Street. Both companies announced plans for similar-size buildings last year.
The first to build will be able to tap into the pent-up demand in midtown. At 4.2 percent, the submarket had the lowest vacancy rate for class A office space in Atlanta at the end of the first quarter, according to Jamison Research Inc.
Pope & Land already has purchased the site on the northwest corner of 14th and West Peachtree streets, where it also is planning to develop a 23-story, 500,000-square-foot building that will have two underground levels.
Last fall, the developer paid $4.6 million for the site across from One Atlantic Center for its new building. The land originally was intended for future phases of Atlantic Center but was foreclosed on by Toronto Dominion Bank.
Pope & Land's Harry Morgan said his company had nothing new to report on its building. He said Pope & Land is working on securing necessary permits and designing the building.
"We're in the mundane part of it," he said. "We're just kind of plodding along."
Morgan said he is talking with prospective tenants but has nothing concrete to report. "We're close," he said. "Somebody's going to do something within the next 30 days."
High-profile tenants
The companies are trying to wrap up commitments from tenants for the new buildings. Both Trammell Crow and Pope & Land want to land the huge space requirement of Alston & Bird LLP, which now is situated in One Atlantic Center but has issued a request for proposal (RFP) for up to 500,000 square feet.
If the McGuire Woods lease is signed, that law firm will relocate from downtown, where it leases space in Peachtree Center's Marquis Tower Two.
WestWayne, located in 1100 Peachtree, is seeking about 70,000 square feet in midtown and apparently has decided on The Proscenium, according to real estate sources.
The Proscenium will have a midtown look. Thompson, Ventulett, Stainback & Associates Inc., which designed the Promenade II and Campanile office buildings in midtown, is the architect for the new building.
The Proscenium will have a 1,000-car parking deck at Crescent and 14th streets that will be connected to the tower by a bridge across Crescent.
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