Beltline buys office building for $16.5M to preserve affordable space

The Atlanta Beltline has acquired an office building along the Eastside Trail in a move it says will preserve affordable commercial space in “one of Atlanta’s most competitive and rapidly evolving corridors.”

The agency, which oversees the development of the 22-mile loop of trails and parks, paid $16.5 million for a four-story office building known as the Willoughby, according to property records.

The building is tucked away near the Historic Fourth Ward Skatepark and a short walk to the Eastside Trail, which stretches from Piedmont Park to Reynoldstown.

The Beltline has as part of its mission the development of the trail but also works to boost affordable housing and job creation. For example, the Beltline has an incubator program where it has placed modified shipping containers along trail segments, such as at Pittsburgh Yards, to provide affordable space for small businesses.

The office building purchase comes as a host of corporate employers, from investment giant BlackRock to electric vehicle maker Rivian, have flocked to the upscale office district that’s sprung up over the past decade or so along the Eastside Trail.

Companies have shown they will pay a premium for workspace overlooking the popular walking and biking trail, viewing the location as a recruitment tool for employees seeking a more urban lifestyle.

Compare that to the average asking rent across metro Atlanta, which is about $36 per square foot for class-A office buildings. Within the central business district, those rates are a little higher, about $41 per square foot, Giguere said.

The entrance to the Willoughby, which is located near the Beltline's Eastside Trail. (Miguel Martinez/AJC)

Jeff Pollock of Pollock Commercial, who previously leased the Willoughby building, told Bisnow Atlanta that asking rents were $38.50 per square foot for a triple-net lease, which requires tenants to cover other costs related to taxes, insurance and maintenance. The AJC could not immediately reach Pollock.

“We were $15 cheaper than our closest competitor,” Pollock told Bisnow, which was first to report the Beltline’s purchase.

The Beltline closed its acquisition on May 18, according to property records.

The Willoughby spans almost 60,000 square feet with a rooftop deck that offers skyline views. Tenants include advertising agency Dagger, and technology firms Sports Connect and Stable Kernel, according to a sign at the building’s entrance.

“By acquiring the property, Atlanta Beltline Inc. is helping to maintain affordable commercial space for existing and future tenants while ensuring the long-term viability of a building that serves a diverse mix of businesses and organizations,” Higgs said, adding the current businesses at the building would remain in place.

Atlanta Beltline, which has its offices in downtown, may occupy a portion of the building in the future, Higgs added.

The Beltline bought the building at a discount to what it last sold for in 2019. Previous owner Stockbridge Capital Group paid $23.8 million, according to property records, in what was reported at the time as a “trophy tower price” by the Atlanta Business Chronicle. A request for comment from Stockbridge was not immediately returned.

A Beltline spokesperson also did not immediately return a request asking how the agency funded the acquisition.

The agency benefits from a dedicated Tax Allocation District, the city’s largest, where property tax revenue growth is allocated to pay for infrastructure within its boundaries.

Atlanta Mayor Andre Dickens is striving to renew the city’s TADs but recently dropped the Beltline TAD from his sweeping proposal. The Beltline TAD is set to expire at the end of 2030.

Since the TAD was established in 2005, the Beltline has transformed a former rail corridor with nearly $1 billion in public and philanthropic financial support.

But as the project has carved its path through the city, helping ignite billions of dollars in new investment and thousands of jobs, it has also stoked concerns about affordability and the displacement of residents and businesses amid rising rents and property values.

The Beltline previously announced a $2 million incentive fund to encourage developers to create affordable commercial spaces. The agency has projects in the works such as Oakland Exchange that promise lower-cost spaces for businesses, along with programs that target housing affordability, among other efforts.