A 46-acre office park in Buckhead is facing foreclosure after its owner defaulted on a $330 million loan from Morgan Stanley, but the proceeding has been delayed.
Ardent Companies, an Atlanta-based investment management firm, defaulted on its loan for Piedmont Center, a 14-building office campus near the intersection of Piedmont and Lenox roads, according to an Atlanta Business Chronicle article. Morgan Stanley expected to foreclose in January but then delayed it to Feb. 4. But now it’s set for March.
According to Doug Eidson, a veteran commercial real estate broker and senior managing director at Scotland Wright Associates in Midtown, the Atlanta market is navigating the post-pandemic landscape effectively and remains in good shape.
“Across the board, there’s more vacancy now than there was prior to 2020,” he said. “But the high-quality, highly amenitized properties have leased out. These employers want to be in these buildings that have easy walkability. Those who don’t have the capital to renovate, they’re the ones really suffering. … The Class A and higher buildings are performing well, and the Class B and lower ones are struggling. The employers are considering the higher-end offices.”
Piedmont Center on the market
Regarding Piedmont Center, it was built in stages between 1977 and 1998, and it was renovated in the past decade. It was at one time considered one of the jewels of the Buckhead commercial real estate market.
JLL, a Chicago-based company specializing in selling and leasing commercial real estate, has Piedmont Center listed as one of its properties for sale. According to the for sale webpage, its occupancy is 62.6%. Piedmont Center totals 2.2 million net square feet of building area, and has 4.1 years of weighted average lease term remaining, according to JLL’s website.
In 2021, JLL’s capital markets group refinanced Piedmont Center for $421.8 million in financing. Ardent was the borrower in the floating-rate loan.
“Proceeds were used to refinance the debt of Ardent’s existing holdings within Piedmont Center plus the acquisition of four additional buildings within the office complex,” a Real Deal article stated.
The foreclosure happens after the property’s value plummeted from $657 million in 2021 to an estimated $200 million. It dropped from $298 per square foot to $91 per square foot — a 70% decrease. Ardent CEO and Managing Partner Matt Shulman did not return phone and email messages seeking comment on the foreclosure.
It was preliminarily scheduled for January 4th but was postponed to allow Morgan Stanley to explore a short sale. The maneuver would allow it to be sold for less than the amount owed, which is sometimes preferred to avoid protracted foreclosure proceedings.
Eidson, who knew about Piedmont Center’s situation because he has clients leasing space there, said he heard it could be foreclosed soon.
“But other [foreclosure] dates have been proposed over the past year and it’s never happened,” he said. “For a variety of reasons, nothing has changed. Ardent has been in default of their loan for months. I think eventually something will happen, but whether it will be in February, we don’t know.”
Atlanta’s office market
Overall, Atlanta’s office market has a vacancy rate of 25%. Eidson said it’s seen “significant improvement compared to 2020 or 2021.”
“I would really say it’s good,” he said. “Has it been better? Sure, but relative to where it was, we’ve seen significant improvement and we’ll continue to see that in 2025 and 2026. Less amenitized Class B buildings will continue to struggle and go through some ownership changes. There’s a number of buildings that were sold near the end of 2024, some that were 50 and 60% less than they were purchased for five years earlier.”
With many companies now requiring their employees to work in their offices four or five days a week or proposing a plan to do so soon, that should further improve the market, Eidson said.
“We’re seeing a strong trend on being back in the office,” he said.
