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Atlanta: Prime Buckhead corner goes for $18 mil

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Guest donaltopablo

Prime Buckhead corner goes for $18 million

Pope & Land buys tract at Peachtree and Piedmont

Jarred Schenke

Staff writer

One of Atlanta's top office developers is planning a major mixed-use project at one of the most desirable locations in Buckhead.

Pope & Land Enterprises Inc., together with Kent Levenson of Easlan Capital Inc. and local real estate investor George Berkow, has purchased 12.5 acres wrapping around the Grand Hyatt Atlanta hotel at the intersection of Peachtree and Piedmont roads.

"Obviously for us, it's a major urban mixed-use site where we plan to build high-end retail, residential and a major office tower," said Jay Land, a principal at Pope & Land Enterprises. "It's certainly one of the best locations for an office tower in Buckhead."

Pope & Land purchased the property in January from New York-based Blackstone Group L.P. for $18.85 million, or about $1.5 million an acre, according to real estate tracking firm Databank Inc. That makes it one of the most expensive land deals in Atlanta in the past year.

Jay Jacob with Easlan and John Brown brokered the deal.

Plans for the $500 million, 2.5 million-square-foot project still are being hammered out by the developers. But it may include a 600,000-square-foot office tower at the corner of Peachtree and Piedmont, Land said. That will only start once Pope & Land secures a major tenant to take enough space to finance its construction.

In the near term, the developers are talking to residential developer Wood Partners LLC to flip 4 acres of the project to develop a 350-unit condominium along Peachtree Road across from the now-under-development InterContinental Hotel, sources said. The condo also could include 50,000 square feet of office space.

Wood Partners could not be reached for comment as of press time.

Levenson and Berkow also are attempting to develop a high-end hotel on West Paces Ferry Road next to One Buckhead Plaza.

Buckhead's renewed interest

Pope & Land is the latest Atlanta developer with Buckhead in its sights for a major project.

Songy Partners Ltd. is planning a 250-room hotel and 250,000-square-foot office project at the former Art Institute of Atlanta campus site on Peachtree Road, just north of the Pope & Land project. And Kim King, who has developed the Centergy project in Midtown, and developer Wayne Mason, former Gwinnett County Commission chairman, both plan to eventually transform what was the Gold Club in Buckhead into a high-rise condominium project and retail center.

David Songy, co-founder of Songy Partners, said it's too early in the development cycle to know if Pope & Land's project would have an effect on his planned office tower.

"I think the first logical question is when could they actually get the project under way," Songy said. "It's more difficult to kick off a 600,000-square-foot building than a 250,000-square-foot building from a financing standpoint."

Songy, in conjunction with Atlanta developer Barry Real Estate Cos., has courted SunTrust Robinson Humphrey, a national stock brokerage firm, to spearhead its office building development, sources previously told Atlanta Business Chronicle. SunTrust currently has offices in Atlanta Financial Center, a short distance from the Pope & Land property.

And this isn't the first time developers have made a run at the Pope & Land site. In the early 1990s, a mixed-use development that would have included office and hotel facilities was planned there. Eventually, Hotel Nikko was built, which later became the Grand Hyatt Atlanta after Blackstone and Hyatt Corp. purchased it in 1997 for $90 million. Blackstone later sold its interest in the hotel, and instead purchased the property's land from Prudential Insurance Co.

Then in 1999, Cousins Properties Inc. (NYSE: CUZ) made a run at the property, proposing to purchase half the lot for a two-building office build-to-suit project of at least 450,000 square feet. The deal never materialized.

Pope & Land brought aboard

Although Easlan originally had the property under contract, the group brought Pope & Land in to help spearhead development on the project, Levenson said.

"It's a mixed-use deal and they're one of the best office developers in Atlanta, and they were looking for a Buckhead presence," Levenson said.

Berkow said the land purchase is an ideal investment as well.

"I think the Buckhead area has historically been a good place to invest money, and will continue to be so," he said.

John Decker, a partner with office landlord and developer Childress Klein Properties, said the success of the project will likely depend on timing. But Decker said Buckhead as a whole has weathered the office real estate recession better than most submarkets in Atlanta.

"When you think about it, Buckhead has probably had as little new construction in office as any submarket over the past two or three years," Decker said.

But he warned that it could take time for Pope & Land to find a tenant large enough to spearhead a 600,000-square-foot office tower.

"I don't see any reason to be incredibly more optimistic on job growth and increased activity in Buckhead over any other submarket," he said.

johnson Bryant, managing director at Advantis/GVA in Atlanta, echoed those sentiments.

"But I, along with many others, feel that Buckhead has the strongest potential for growth," he said.

Pope & Land's Land said details on the whole project are still preliminary, and the size isn't fixed.

"We're still in the stages of our master plan," Land said. "But there are several tenants out there. We think all of them will be attracted to this site."

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