Cousins Acquires Atlanta Landmark as Equity Office Leaves Market

Cousins Properties Inc. has reached an agreement to purchase One Ninety One Peachtree Tower (pictured), a landmark 50-story office building in Downtown Atlanta, for $153 million. The seller, Equity Office Properties, recently announced plans to exit the Atlanta office market after seeing less than stellar results from its properties in the city.

Concurrent with the Peachtree Tower sale, Equity Office will purchase Frost Bank Tower in Austin from Cousins for $188 million. Both sales are expected to close in mid-September, and are contingent upon each other.

Speaking with CPN today, Cousins president & CEO Thomas Bell expressed satisfaction at acquiring such a highly visible property in the company's home base of Atlanta. "It's one of the great buildings in the Southeast, and was built to the highest standards," he said. The purchase of One Ninety One Peachtree completes a circle of sorts for Cousins, which co-developed the tower in 1990 with Hines, and will now move its own headquarters into the building.

"(Moving into the property) demonstrates that we are confident in the area, and we are putting our money where out mouth is," said Bell, who expected the Cousins office to occupy about 60,000 of the building's 1.2 million square feet.

Under Equity Office, One Peachtree had fallen on hard times. After the departure of major tenants such as Wachovia Corp., the tower is currently only about 20 percent occupied, and its struggles were a major factor in Equity's decision to quit the Atlanta office market.

Bell was confident that Cousins would be able to restore the building to prominence by utilizing the company's strong local relationships and recent new attractions in the area to draw in new tenants. "The office market is ? sensitive to local relationships and local politics, and we feel like we have the relationships to lease (the building) back up," Bell said. He highlighted the resurgence brought to the downtown area by the recently-opened Georgia Aquarium, as well as the World of Coke project, due to open next year.

The sale represents the first divestment by Equity Office Properties since the company announced its formal intentions to leave the Atlanta office market. The Chicago-based firm, which owns almost 600 office buildings across America, has not been happy with the trends it has seen in Atlanta. Increased competition, high vacancy rates (21.6 percent in the Downtown submarket), slow rent growth and a lack of growth among local employers have combined to spur Equity Office's division to invest elsewhere.

The Atlanta divestment is part of a larger financial restructuring plan for Equity. Overall, the firm plans to unload $2.5 billion in property within the next year, while also downsizing and cutting costs companywide.