Lone Star Funds has abandoned 55 Allen Plaza to avoid foreclosure.

Phoenicia Real Estate Holdings took title to the 14-story, 350,000-square-foot building through a deed in lieu of foreclosure. The deal was valued at $57.8 million. Phoenicia is a subsidiary of Aflac Inc. Aflac Global Investments. The Atlanta Business Chronicle reported that Lone Star acquired the Property in 2020 for $79 million, using $67.5 million in acquisition financing provided by NXT Capital. 

The office building is part of the Allen Plaza mixed-use project, which is 66% occupied. Its major tenants include EY and design firm ASD|SKY. Selig Enterprises maintains air rights for 55 Allen Plaza, and a new owner will have to make lease payments.

Morgan Stanley has filed to foreclose on a $330.8 million loan tied to the Piedmont Center, a 46-acre property that includes 14 office buildings along Piedmont Road.

The Atlanta Business Chronicle reports Ardent Cos., which owns the 2.2 million-square-foot campus, has defaulted on the loan. Piedmont Center was valued at $657 million, or $299 per square foot when Ardent lined up the debt package from Morgan Stanley in 2021. That was before interest rates soared and building valuations began to fall. 

Morgan Stanley intends to foreclose on Piedmont Center on February 4th.

Bids for Piedmont Center could be near $200 million, or $91 per square foot. That’s a 70% decline from its value in 2021. JLL is marketing the Piedmont Center. The offering says it represents a generational opportunity to control a prominent position in the Buckhead office market with significant in-place cash flows and highly flexible business plan optionality.

One of Center City’s most iconic distressed office buildings could undergo a residential conversion following foreclosure proceedings expected to wrap up early next year.

TF Cornerstone plans to convert Center City’s historic Wanamaker Building into apartments following bankruptcy proceedings.

New York-based development company TF Cornerstone plans to transform the 1.4M SF structure at 1300 Market St. into apartments once the foreclosure process is complete, according to the Philadelphia Business Journal, which cited an unnamed source.

The vintage skyscraper’s current owner, Rubenstein Partners, is in the midst of bankruptcy proceedings in the Philadelphia Court of Common Pleas. TF Cornerstone acquired the majority of the building’s office debt in July and is pushing to advance the foreclosure case.

The two parties will have an opportunity to hash it out during a settlement conference scheduled for Jan. 6. If they don’t come to an agreement, a trial will begin on March 3.

The Wanamaker Building’s floor plate is roughly 100K SF, about five times larger than the ideal size for an office-to-residential conversion, the PBJ reported. One feasible but pricey solution would entail hollowing out the historically protected structure for an interior courtyard.

TF Cornerstone, which also bought the 435K SF Macy’s space on the first three floors of the building for $40M in 2019, has extensive experience with office conversions in New York City.

Its projects include 95 Horatio Street, a former refrigeration facility in the Meatpacking District that was converted to 318 residential units, and The Fairfax, a former FBI headquarters building that became 313 residences.

Last week, the company and partner Dune Real Estate announced plans for a new $1B office conversion venture called Alta Residential.

“Dune and TF Cornerstone have identified the conversion of office buildings to residential as a generational opportunity given the scale of the distress in office real estate together with the unmet demand for housing in the U.S.,” the companies said in a Tuesday press release.

In addition to TF Cornerstone’s hometown, Alta Residential will target the office markets in Washington, D.C., Boston, Atlanta, Dallas, San Francisco, Los Angeles, Charlotte and Raleigh, North Carolina.

Rubenstein paid $200M for a majority stake in the Wanamaker Building in 2017. It was 96% occupied at the time. That rate dropped to 36% when advertising firm Digitas vacated its space last year.

Rubenstein listed the building for sale in 2021 after several high-profile tenants, including the General Services Administration, the Department of Housing and Urban Development and the Children’s Hospital of Philadelphia, moved out in the wake of the pandemic.

The building went into receivership in September 2023. Details about TF Cornerstone’s plans to buy it first emerged in July.

Cushman & Wakefield has been retained to market the foreclosure sale of AtTraction, a historic 58,118-square-foot historic, adaptive reuse asset located in two buildings at 800-810 Traction Ave. in Los Angeles’s Arts District. The property is being sold through the site’s former lender and now current owner.

A Cushman & Wakefield team comprising Mike Condon Jr. and Erica Finck are representing the seller. The building had originally housed the Joannes Brothers Company, a coffee, tea, and spice processor and wholesaler, followed in the mid 1950s by the Los Angeles Desk Company. The previous ownership had acquired the property in 2021 and was deep into an adaptive reuse plan .

“Aside from the real estate being objectively one of the best assets in the market, the deal structure offering an opportunity to buy the Arts District’s crown jewel at a basis comparable to the former lender’s, combined with the optionality for seller financing, creates a one-of-a-kind buying opportunity for an investor or user,” said Condon. “Finally, the buyer can benefit from finalizing a redevelopment of the project on third base, given millions of dollars have already been spent on many of the base building elements to date, creating substantial additional value.”