12-story 14th+Spring office tower in Midtown
One of Midtown Atlanta's newest office towers is up for sale as its developer seeks to exit its investment in the speculatively constructed building without securing a lease for the space.
The Atlanta Business Chronicle reports that Greenstone Properties and its financial partner Goldman Sachs are planning to build a 12-story, 320,000-storey building that is expected to be delivered in 2022 and has remained vacant since then. JLL was hired to sell the 4,000 square kilometer office tower “14th + Spring.''
This is a surprising move given the lack of investment sales activity over the past year, especially for office space.
The development partnership's $75.8 million loan from Banco Santander was scheduled to mature on Dec. 27, according to Reonomy's database. Greenstone recently extended its loan for another two years, giving it more headroom to market the property, according to a person familiar with the offering.
Greenstone partner De Little declined to comment for this story, and JLL did not return calls seeking comment. While the company is putting the properties up for sale, Greenstone is also continuing to sell space for lease, according to people familiar with the potential deal.
Although the landlord has struggled to find tenants willing to pull the trigger on rental space since the handover, 14th + Spring is not without tenant interest, ABC reported. Still, Greenstone faces an uphill battle over real estate leasing as Midtown's foundations have crumbled over the past year.
In the fourth quarter, tenants gave up 338,000 square feet more office space than they leased in the submarket, and the vacancy rate hit a record high of 23.4%, Colliers Atlanta reported. Negative absorption skyrocketed from 5,400 SF in Q4 2022 to 150,000 SF in Q3 2023.
An additional 1.5 million square feet of office space is still under construction, but there is little evidence to suggest that supply and demand will return to balance. Leasing activity fell 40% from the fourth quarter of 2022, and the final three months of 2023 were the slowest in midtown activity since 2010.