Tuesday, September 23, 2008

Peloton Assumes Leasing of 273,080-SF High Rise

With investment sales at a slow crawl, Atlanta-based Goddard Investment Group is undertaking a new tact for the 273,080-sf Saint Paul Place in the Arts District. The new plan pulls the 55%-leased, renovated high rise from the sales block and puts a new leasing team on the ground for its repositioning.

The 22-story Saint Paul Place at 750 N. Saint Paul St. underwent a multimillion-dollar renovation last year as part of Goddard's value-add plan before it moved to the sales market. As is so common these days, the re-groomed class A office building has been de-listed until the market calms down.

Goddard didn't respond by deadline to comment on the decision which, in turn, triggered a competition for the leasing assignment. The decision's now in: Peloton Real Estate Partners has wrestled the lease from Grubb & Ellis Co., which also didn't respond by deadline to comment on the assignment loss.

Peloton partner Joel Pustmueller and vice president Grant Sumner are in charge of the lease-up strategy. "It's our job to create that market awareness for the brokerage community to really understand how this building's been repositioned," Pustmueller says.

Pustmueller tells GlobeSt.com that Grubb & Ellis has inked "three or four" deals for new tenants in the past month and deals pending for full-floor leases as does Peloton, which came to the table with a two-floor lease in tow. He says the building's stabilization point is 85% to 90% occupancy. "We're hoping we can be there in 12 months," he says.

Saint Paul Place's largest contiguous block is 50,000 sf on floors seven to 10. Also up for grabs are the penthouse floor and the one right below. Pustmueller says the upper bank block could be expanded by shuffling tenants.

Pustmueller points out that the class A office building, with 13,500-sf floor plates, has strong appeal for boutique law firms, some of which moved to Uptown and are now eyeing Downtown space once again. The attitude change is due largely in part to the difference in lease rates: $21 per sf plus electric at Saint Paul Place versus $30 per sf or more for Uptown space. At the other end of the spectrum, he says class B tenants also are eyeing the space. And the retooled interior, including Saint Paul Place Café, has added to the appeal factor, he says.

"Activity is picking up. This is a double A location with value pricing," Pustmueller says.