It was built as Atlanta’s ultimate corporate address, a gilded product of late 1980s design with lots of corner offices when such things really mattered to bankers, law firm partners and corporate VPs.
Now Bank of America Plaza, the city’s tallest tower but also one of its emptiest, is in line for a little creative disruption.
The investor owners of the half-vacant giant at the cusp of Midtown and downtown recently hired the leasing team that helped turn Atlantic Station into a hive of tech companies. Their job is to fill up BofA Plaza, the tallest U.S. tower to be foreclosed in the wake of the financial crisis.
The strategy includes corporate targets but also goes beyond them. The team from real estate services firm CBRE wants to market some of the space to startups and other creative firms, hoping that will generate buzz and draw bigger corporate tenants, too.
“It’s no longer just start-up companies that want these cool lofty hip office spaces,” said Nicole Goldsmith, a member of the leasing team in the Atlanta office of Los Angeles-based CBRE. “A lot of professional services firms do, too.”
BofA Plaza’s history mirrors Atlanta’s recent economic arc.
The tower’s construction was a symbol of Atlanta’s aspirations and rise as an international city in the 1990s. It’s the trophy office tower that fetched a record price in the heady real estate boom of the 2000s. Then it became an emblem of the city’s economic fall when its former owner lost it to foreclosure in 2012.
Office towers are a signal of corporate health and the broader economy. The region has only recently begun to see new construction, and vacancy among Class A office space — the top tier — has declined to a 14-year low as the economy has recovered.
Yet BofA Plaza still has acres of premium space for rent. It boasts nearly 1.3 million square feet of floor space, as much as many large malls. The tower’s vacant space alone — literally half the skyscraper — is about the size of downtown’s Equitable building.
More is at stake with CBRE’s effort than just boosting rent revenue for CWCapital, which took control of the tower after its foreclosure.
Full buildings bring life to the streets around them as workers feed business to nearby stores and restaurants. When rents and property values rise, so do tax rolls.
In some ways, BofA Plaza is isolated. It’s on an underdeveloped stretch of Peachtree, a little too far north to be downtown and a tad too far south to be part of the Midtown hubbub. It doesn’t have lots of neighboring restaurants and boutiques like Atlantic Station to help woo tenants, noted Henry Lorber, a distressed real estate expert with Henry Lorber and Associates.
“I wish them luck but it will not be easy,” he said.
The effort to woo start-ups and other creative companies is in part a reflection of the market. Technology is hot, and BofA Plaza is just a few blocks from Georgia Tech, whose gravitational pull has attracted corporate innovation centers and headquarters relocations.
Jeff Keppen, a senior vice president with CBRE, said corporate tenants like law firm Troutman Sanders and the tower’s namesake remain a big part of Bank of America Plaza’s future. New corporate headquarters and major operations centers will remain on the brokers’ radar to fill larger chunks of open space.
But the high-rise at North Avenue and Peachtree Street was skipped over by corporate titans like Mercedes-Benz, Kaiser Permanente and Worldpay US, which all made relocation decisions in recent months.
CBRE is starting small.
In 30 to 60 days, the team will start tricking out a couple empty floors of the venerable tower as speculative space that might be attractive to creative companies. Open floor plans. Exposed air ducts and beams. No walled-off corner offices that block natural light.
Ultimately, floors seven through 10 could be dedicated to what the team calls “TAMI,” which stands for technology, advertising, media and information firms. They’re also overhauling the tower’s lobby, fitness center and other amenities.
The CBRE team has started pitching promising young firms and bigger companies, Keppen said.
AT&T, Panasonic, Home Depot and Southern Company are among the blue-chip players that have positioned innovation labs in other buildings near Georgia Tech. Financial technology company NCR plans a new headquarters nearby at Technology Square. Phase II of Tech Square is soon to start.
Making spec space specifically for tech companies is the same strategy the CBRE team used to help fill up 271 17th Street in Atlantic Station, the Midtown tower anchored by BB&T. Keppen and his team carved out a demo office in that tower to make it feel like a loft.
Soon after, the company wooed marketing firm Ogilvy & Mather. Pandora, Square and Uber followed. CBRE landed Worldpay in the neighboring 201 17th Street tower, where it will begin moving staff in the coming weeks.
And this summer, Sage Software announced the relocation of its North American headquarters – and 400 new jobs — at 271 17th Street.
“It’s becoming tagged as Silicon Station because of all the tech company leases that we’ve done,” Keppen said of Atlantic Station, which has also undergone a retail transformation. “But there are a lot of big, established companies there.”
It’s not just tech firms looking for cooler digs to help recruit younger workers.
For instance, J.E. Dunn, a major construction company, recently remodeled a 1970s-era low-rise office building near Cumberland Mall, installing a slide between floors, a basement lounge and an outdoor putting green to help appeal to millennials.
BofA Plaza has a lot of competition. The Carter real estate firm is pitching the vacant 715 Peachtree Street to upstart companies and Hines Interests plans a new wooden-framed building at Atlantic Station. 525 North, a project planned by Seven Oaks Co. and partners near Ponce City Market, is also in the works.
Keppen said he isn’t worried about competitors. Job growth, particularly in white collar fields, has finally rebounded strongly enough for all the projects to be successful, he said.
Metro Atlanta’s unemployment rate is at 6 percent, still above the U.S. average, but the region added 77,000 jobs in the past year.
“(Prospects) will get over some of the misperceptions of what the building is,” Keppen said.
Three things to know about Bank of America Plaza
Origins: In the late 1980s, Atlanta-based Cousins Properties and C&S Bank announced plans for the bank’s new headquarters at 600 Peachtree Street, a tower to be Atlanta’s tallest building. The building later was renamed for successor institutions NationsBank and Bank of America.
Ups and downs: BofA Plaza set Atlanta records when California real estate developer BentleyForbes bought the building from Cousins in 2006 for $436 million. But tenants left and others reduced their space, sapping rental revenue. BentleyForbes lost the building to foreclosure in February 2012.
Wild idea: Facing a glut of empty space, former owner BentleyForbes once proposed converting part of the skyscraper into a luxury hotel.
Timeline of a tower
Late 1980s: C&S Bank and Cousins Properties announce plans for a new C&S headquarters, to be Atlanta’s tallest building, at 600 Peachtree Street.
1991: C&S/Sovran is acquired by Charlotte-based NCNB and becomes NationsBank, a precursor to Bank of America.
1992: The 55-story tower opens as NationsBank Plaza.
1999: Name changes to Bank of America Plaza after NationsBank acquires Bank of America and takes its name.
2006: California real estate firm BentleyForbes buys Bank of America Plaza from Bank of America and Cousins Properties for $436 million, an Atlanta record.
February 2011: Fitch Ratings issues a report stating Bank of America Plaza is in “imminent default” and a special servicer has been brought in to help work out the troubled debt.
February 2012: Bank of America Plaza is foreclosed.
Late 2012: CW Capital Asset Management takes control of the tower on behalf of its bond-holding owners.