flexiblefullpage
billboard
interstitial1
catfish1
Currently Reading

Bank of America Plaza becomes Atlanta's priciest repo

Bank of America Plaza becomes Atlanta's priciest repo

Repo will help reset market prices for real estate, and the eventual new owner will likely set rental rates at a new or near the bottom and improve the facilities to lure tenants.


By J. Scott Trubey, the Atlanta Journal-Constitution | March 27, 2012
The Bank of America Plaza in Atlanta was taken back by its lender at a foreclosu
The Bank of America Plaza in Atlanta was taken back by its lender at a foreclosure auction.

One of the biggest emblems of Atlanta's real estate boom became the biggest emblem of its bust recently.

Bank of America Plaza, the South’s tallest skyscraper and an Atlanta skyline icon, was taken back by its lender at a foreclosure auction at the Fulton County Courthouse. The 55-story tower, bought for a record price in 2006 by a California real estate firm, is now metro Atlanta’s priciest repossession.

A lawyer for LNR Partners placed two "credit bids" totaling $250 million. That means it essentially bid not with cash but rather the lender's own interest in the building. LNR represents the lender, a commercial mortgage-backed security owned by investors. The lender is likely to seek a new buyer, who will likely spruce up the tower and try to attract new tenants.

The building's distress stemmed from its last sale at the very height of the real estate boom. The prior owner, BentleyForbes bought the trophy tower for $436 million from Cousins Properties and Bank of America in 2006. Soon after, office vacancies soared and property values and rents plummeted following the economic collapse.

Timeline of a tower
Late 1980s -- C&S Bank and Cousins Properties announce plans for a new C&S headquarters, to be Atlanta’s tallest building, at 600 Peachtree Street.
1991 -- C&S/Sovran is acquired by Charlotte-based NCNB and becomes NationsBank, a precursor to Bank of America.
1992 – The 55-story, more than 1,000-foot building opens as NationsBank Plaza.
1999 – The tower’s name officially changes to Bank of America Plaza after NationsBank acquires Bank of America and takes its name.
2006 – California real estate firm BentleyForbes buys Bank of America Plaza from Bank of America and Cousins Properties for an Atlanta-record $436 million.
2011 – Fitch Ratings issues a report stating Bank of America Plaza is in “imminent default” and a special servicer has been brought in to help work out the troubled debt.
2012 – Bank of America Plaza is foreclosed.

An executive with BentleyForbes said in a statement the firm worked with LNR “for more than a year to identify a viable way forward,” and that transferring control to LNR and the bond holders was the best way forward.

The 1,023-ft tower is a garnet-hued obelisk when the sunset plays off its Napoleon red granite façade. Its 50-ton spire is splashed with 23-karat gold leaf.

The building was planned as the headquarters of C&S Bank in the late 1980s. It was later renamed for successors NationsBank and ultimately Bank of America.

The tower may not be the last signature office or retail complex to change owners. Delinquency rates for commercial mortgage backed securities, or CMBS, just one type of loan for commercial properties, remains near all-time highs in metro Atlanta, according to real estate research firm Trepp.

Bank of America Plaza By the Numbers
23 – The 50-ton spire at the top of Bank of America Plaza is covered in 23-karat gold leaf
55—Floors in the building
1,023 – Bank of America Plaza is 1,023 feet tall.
1.28 million – The total square footage of Bank of America Plaza
Architect: Kevin Roche, John Dinkeloo and Associates

A total of $2.54 billion in CMBS loans, or 20% of the value of all such loans, were past-due in metro Atlanta in January, according to Trepp. The delinquency figure nationwide was 9.52%.

Borrowers have struggled to refinance given falling values and trouble filling vacancies. Major banks and institutional investors also lent on commercial property, but CMBS loans, which typically make higher leveraged loans at high interest rates, became popular last decade. Their use peaked in 2007. Many CMBS loans come due in five years, making 2012 a feared year.

“I think unfortunately we’re only in about the third or fourth inning," said Henry Lorber, an expert in distressed real estate and a managing director at Atlanta-based Hays Financial Consulting.

Big-name tenants filled Bank of America Plaza when BentleyForbes bought it. But the owners soon had to grapple with the Great Recession, corporate cutbacks in office space and a glut of competing new space in Midtown and Buckhead. Ernst & Young left a few years ago and law firm Troutman Sanders and Bank of America reduced their space. Law firm Paul Hastings also is leaving for another building. In metro Atlanta, vacancy remained near record highs in the third quarter 2011 at 16.9%, according to CoStar Group, with rents at $18.36 per square foot, down from $20.28 in 2008.

Gil Burstiner, commercial real estate partner at the law firm of Hartman Simons, said the ordeal will help reset market prices for real estate, and the eventual new owner will likely set rental rates at a new or near the bottom and improve the facilities to lure tenants. BD+C

Related Stories

Adaptive Reuse | Aug 31, 2023

Small town takes over big box

GBBN associate Claire Shafer, AIA, breaks down the firm's recreational adaptive reuse project for a small Indiana town.

Giants 400 | Aug 31, 2023

Top 35 Engineering Architecture Firms for 2023

Jacobs, AECOM, Alfa Tech, Burns & McDonnell, and Ramboll top the rankings of the nation's largest engineering architecture (EA) firms for nonresidential buildings and multifamily buildings work, as reported in Building Design+Construction's 2023 Giants 400 Report.

Giants 400 | Aug 30, 2023

Top 75 Engineering Firms for 2023

Kimley-Horn, WSP, Tetra Tech, Langan, and IMEG head the rankings of the nation's largest engineering firms for nonresidential buildings and multifamily buildings work, as reported in Building Design+Construction's 2023 Giants 400 Report.

Building Team | Aug 28, 2023

Navigating challenges in construction administration

Vessel Architecture's Rebekah Schranck, AIA, shares how the demanding task of construction administration can be challenging, but crucial.

Laboratories | Aug 24, 2023

Net-zero carbon science center breaks ground in Canada

Designed by Diamond Schmitt, the new Atlantic Science Enterprise Centre (ASEC) will provide federal scientists and partners with state-of-the-art space and equipment to collaborate on research opportunities.

Multifamily Housing | Aug 24, 2023

A multifamily design for multigenerational living

KTGY’s Family Flat concept showcases the benefits of multigenerational living through a multifamily design lens.

Multifamily Housing | Aug 23, 2023

Constructing multifamily housing buildings to Passive House standards can be done at cost parity

All-electric multi-family Passive House projects can be built at the same cost or close to the same cost as conventionally designed buildings, according to a report by the Passive House Network. The report included a survey of 45 multi-family Passive House buildings in New York and Massachusetts in recent years.

Regulations | Aug 23, 2023

Gas industry drops legal challenge to heat pump requirement in Washington building code

Gas and construction industry groups recently moved to dismiss a lawsuit they had filed to block new Washington state building codes that require heat pumps in new residential and commercial construction. The lawsuit contended that the codes harm the industry groups’ business, interfere with consumer energy choice, and don’t comply with federal law. 

Government Buildings | Aug 23, 2023

White House wants to ‘aggressively’ get federal workers back to the office

The Biden administration wants to “aggressively” get federal workers back in the office by September or October. “We are returning to in-person work because it is critical to the well-being of our teams and will enable us to deliver better results for the American people,” according to an email by White House Chief of Staff Jeff Zients. The administration will not eliminate remote work entirely, though.

Building Owners | Aug 23, 2023

Charles Pankow Foundation releases free project delivery selection tool for building owners, developers, and project teams

Building owners and project teams can use the new Building Owner Assessment Tool (BOAT) to better understand how an owner's decision-making profile impacts outcomes for different project delivery methods.

boombox1
boombox2
native1

More In Category


Urban Planning

The magic of L.A.’s Melrose Mile

Great streets are generally not initially curated or willed into being. Rather, they emerge organically from unintentional synergies of commercial, business, cultural and economic drivers. L.A.’s Melrose Avenue is a prime example. 


Curtain Wall

7 steps to investigating curtain wall leaks

It is common for significant curtain wall leakage to involve multiple variables. Therefore, a comprehensive multi-faceted investigation is required to determine the origin of leakage, according to building enclosure consultants Richard Aeck and John A. Rudisill with Rimkus. 


halfpage1

Most Popular Content

  1. 2021 Giants 400 Report
  2. Top 150 Architecture Firms for 2019
  3. 13 projects that represent the future of affordable housing
  4. Sagrada Familia completion date pushed back due to coronavirus
  5. Top 160 Architecture Firms 2021