Momentum appears to be accelerating for the federal government to sell a downtown Atlanta tower, home to several agencies, that has been a target for sale.
In a report published Thursday, the Public Buildings Reform Board listed the Peachtree Summit Building as one of 11 federal sites across the country it recommends to be sold. The report is the latest effort in the board’s mission to lower costs to taxpayers for poorly maintained or underused buildings, provide federal workers with better, more modern workspaces and return properties to local tax bases.
The assessment determined that the federal government should dispose of the distinctive, triangular-shaped tower, which rises nearly 30 stories over the Downtown Connector, because of its “underutilization and significant deferred maintenance.” As The Atlanta Journal-Constitution reported in March, the building includes nearly 804,000 square feet of leasable office space and is about 30% vacant, according to data from the General Services Administration, which manages the federal government’s vast real estate holdings.
Since returning to office, President Donald Trump has sought to cut government spending, moving to cut personnel and federal property holdings. He has also pushed federal workers to return to their offices.
The Public Buildings Reform Board does note on its website that it is a separate entity from Trump’s controversial cost-cutting initiative known as the Department of Government Efficiency.
Credit: Jason Getz / Jason.Getz@ajc.com
Credit: Jason Getz / Jason.Getz@ajc.com
In March, the General Services Administration published and soon after rescinded a list of 443 properties nationwide for disposal, including 17 in Georgia.
Later that month, the GSA identified Peachtree Summit in a separate list of properties deemed suitable for accelerated disposition.
The Public Buildings Reform Board report said the GSA identified Peachtree Summit for potential disposition in spring 2024, during the tenure of President Joe Biden.
Fulton County appraised the property of Peachtree Summit, located at 401 W. Peachtree Street NW, at $97.6 million. However, the PBRB found the building, which houses thousands of workers in several federal agencies — including the Internal Revenue Service, Social Security Administration and the GSA’s Southeast region — requires $255 million in repairs and upgrades. The estimated cost-saving potential of the sale is listed at $707 million, the report said.
If the sale does occur, tenants are expected to be relocated to the GSA-owned Sam Nunn Atlanta Federal Center, according to the report. Relocating the agencies and thousands of workers based at Peachtree Summit is projected to provide the agencies with an updated, modern and efficient workspace, and eliminate $104 million of reinvestment needs, the report said.
Central Atlanta Progress president and CEO AJ Robinson said federal tenants vacating “will severely depress the value of that building.” On top of that, the significant deferred maintenance that contributed to the PBRB’s sale recommendation will make the building itself hard to sell, Robinson noted.
Metro Atlanta’s office market has suffered since the onset of the COVID-19 pandemic and the rise of remote and hybrid work. Nearly a third of all office space in metro Atlanta is available for rent, a figure near historic highs.
“This is not a great market for office asset sales, so that will have a big effect,” Robinson said.
The 11 properties in the report span eight cities, including Washington, D.C., and cover 7.1 million square feet of office space. The PBRB estimates that total sales proceeds would exceed $300 million and the total 30-year savings would exceed $5.4 billion.
The PBRB was established under the Federal Assets Sale and Transfer Act of 2016 to “identify and recommend federal properties for sale, and to make recommendations for how to streamline the disposal process” of those properties.
The PBRB worked with the GSA and the Office of Management and Budget to compile the list. The PBRB also works with commercial real estate firm JLL in assessing properties to make recommendations.
The board makes only recommendations; the decision whether to sell Peachtree Summit and the other properties lies with the GSA, which controls federal real estate.
According to the board website, the PBRB has identified and recommended disposal of properties worth more than $450 million to date.
— Staff writer Uma Bhat contributed to this report.
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