Downtown Office Tower May Become Apartments

March 28,2014

The same developers behind a hip mixed-use project along the Atlanta Beltline now want to spark a downtown residential resurgence.

Paces Properties Inc., the developer of Krog Street Market, filed plans earlier this month with the city of Atlanta to turn a vacant 20-story downtown office building into an apartment tower with 324 units. Paces Properties has been working on the project at 250 Piedmont Ave. since last summer. It could close on the building in coming weeks.

“We are excited about this project and hope it will be the nudge that facilitates a housing boom in downtown,” Paces Properties executives said in plans submitted to the city on March 18.

Paces Properties, led by CEO David Cochran, has gained recognition over the past two years for its $70 million redevelopment of Tyler Perry’s former movie studio near Inman Park into an urban market with some of the city’s top restaurateurs including chefs Ford Fry (St. Cecilia, JCT Kitchen, King & Duke); Todd Ginsberg (General Muir and formerly Bocado); and Eli Kirshtein (a “Top Chef” alum).

Paces Properties declined a request for an interview about 250 Piedmont.

250 Piedmont would be one of the largest downtown apartment projects in the past decade. Renaissance Walk, a $50 million development at Auburn and Piedmont avenues, was built in partnership with Big Bethel AME Church in the mid-2000s. The project initially offered condos, but those units have since been converted to apartments. Perennial Properties also developed its Pencil Factory Flats & Shops near Georgia State University in recent years.

Paces Properties is making a bold move to convert the 250 Piedmont building into an apartment tower. It could have 234 one-bedroom and 90 two-bedroom apartments.

Buckhead and Midtown have lured the most new capital for high-rise apartments because of the access to shops, restaurants and entertainment that line Peachtree Street.

High-rise apartment developers in those two markets are now achieving rents greater than $2 a foot.

At Central Atlanta Progress’ annual meeting on March 19, Post Properties Inc. CEO Dave Stockert said it’s unclear what downtown apartment rents could be achieved because there are few comparable projects. “Someone will have to take a bit of a leap of faith,” he said.

Stockert, chairman of the executive committee of downtown booster Central Atlanta Progress, observed the surge in adaptive reuse projects in the heart of the city. “I love what I see,” he said. “I think it helps create that street-level excitement we need to encourage more pedestrian activity.”

Connected to the Hilton Atlanta hotel, 250 Piedmont was once home to SunTrust Banks Inc. before the lender relocated a few years ago.

Today, more investors are looking at adaptive reuse projects in downtown.

For example, an investor recently bought downtown’s well-known Flatiron Building, with plans to turn the property into an entrepreneurial hub.

Several things are fueling the trend, said Jennifer Ball, vice president of planning and economic development for Central Atlanta Progress.

Lenders are bringing more distressed properties to market to get them off their balance sheets.

Georgia State University continues to expand.

The city is also luring young entrepreneurs who “desire to work in something besides a glass box,” Ball said. “They are small-business owners, creative firms, engineers, architects, marketing and advertising firms and they want to work in a building that is authentic or unique.”

Downtown Atlanta Adaptive Reuse projects:

250 Piedmont Ave. (formerly SunTrust office)
20 stories
Paces Properties would convert it to an apartment tower

84 Peachtree St. (The Flatiron Building)
A real estate investor would convert it into an entrepreneurial hub. Arun Nijhawan plans to buy and renovate the building.

384 Peachtree St. (Medical Arts Building)12 stories
Marketed by owner, Effie Spielman, for sale.

99-185 Spring St. S.W. (historic Norfolk Southern buildings)
Four Buildings on 8.5 acres
Have been on and off the market for years.