Atlanta Financial Center, Property At Heart Of Nightingale-CrowdStreet Scandal, Finally Sells

More than two years after a deal to sell the Atlanta Financial Center dissolved in a haze of scandal, the troubled property has a new owner. 

The Atlanta Financial Center in Buckhead, a 915K SF office complex at the center of a $54M fraud investigation.

Banyan Street Capital, a Miami-based real estate investment firm, has acquired the 915K SF, three-building office complex in Buckhead from Sumitomo Corporation of America, Banyan Street CEO Rudy Prio Touzet confirmed to Bisnow.

The price of the deal, first reported by the Atlanta Business Chronicle, was undisclosed. Banyan Street acquired the $122.5M debt tied to the building for less than half of its face value, Green Street’s Real Estate Alert reported earlier this year.

Banyan Street’s office division president, Zac Gruber, told Bisnow in an email Wednesday that the firm is prohibited from disclosing the specifics of the deal, but it now owns the fee simple interest in the property, meaning the land and buildings. 

“Our team is looking forward to working with the tenants and the Buckhead community stakeholders to implement our vision for this incredible site,” Gruber said. 

That vision is still being finalized, but demolition is firmly on the table. 

“Our business plan contemplates significant upgrades to some of the existing structures, and potentially tear down and redevelop portions of the complex,” Gruber said.

Crédit Agricole Corporate and Investment Bank drafted the original loan, which was later owned by a consortium of investors. Sumitomo extended the debt last year, but in August, Cushman & Wakefield was hired to market the loan, the ABC reported.

Sumitomo acquired the property, which straddles Georgia 400 and sits atop a MARTA rail line, in 2016 from Hines for $222.5M. It spent $15M to upgrade the property but sought to unload it for a loss after the pandemic hit.

It reached a deal in 2022 to sell the AFC to New York-based Nightingale Properties for $182M. 

Nightingale, led by CEO Elie Schwartz, raised more than $60M of equity to fund the purchase on the CrowdStreet crowdfunding platform. The investment firm told CrowdStreet investors that the AFC deal “presents a rare opportunity to acquire a trophy office at a steep discount because the seller is ‘forced’ and ‘pressured’ and needs to transact regardless of market conditions due to investor redemptions and upcoming loan maturity in Q2 2022.”

But Nightingale never closed on the deal. Schwartz instead embezzled more than $44M of investor funds and spent it on luxury watches, failed stock purchases, and to prop up some of his other troubled properties. He pleaded guilty in February to wire fraud and is scheduled to begin serving a seven-year prison sentence next week. 

All the while, Sumitomo has been left with a stranded asset in a struggling office market. More than 34% of the office space in Buckhead is available for lease, according to CBRE, above the regional average of 32%.

The AFC today is less than 70% occupied, Gruber said, and Morris, Manning & Martin LLP is vacating 140K SF in a move to Two Alliance Center. 

A Sumitomo official didn’t respond to a request for comment. 

The AFC was built in stages, starting in 1982 with an 11-story office building occupied by the storied Atlanta bank Robinson-Humphrey, which has become Truist Bank. 

Two buildings were added in later years after Robinson-Humphrey reached a deal with the Georgia Department of Transportation to deck over an expanded Georgia 400 and MARTA line.