Sumitomo secures loan extension for Atlanta office complex

The owner of a massive Atlanta office complex has been granted a loan extension in the face of growing pressure.

Sumitomo Corporation of Americas made an equity payment to extend the $150 million loan on the 915,000-square-foot Atlanta Financial Center, located at 3353 Peachtree Road Northeast in Buckhead, Bisnow reported.

Sumitomo purchased the complex in 2016 for $222.5 million, or $228 per square foot.

Crédit Agricole Corporate and Investment Bank, the banking arm of the Crédit Agricole Group, issued the initial loan, which matured earlier this year. The details of the extension are also unclear, in particular whether Crédit Agricole has modified it.

The expansion marks the latest chapter in the Atlanta financial hub’s history, including a real estate crowdfunding embezzlement scandal. In June 2022, Sumitomo agreed to sell the complex to New York-based Nightingale Properties for a loss of $78 million due to maturing debt.

Nightingale raised more than $50 million from investors through CrowdStreet, but failed to close the deal. The deal collapsed last year when an independent manager alleged that Nightingale CEO Elie Schwartz embezzled almost all of the investors’ funds, including $12 million diverted to buy First shares and options. Republic Bank.

Schwartz reached an agreement with CrowdStreet investors to repay the funds over several years, but defaulted after a $3 million payment. This led the special trustee to urge the bankruptcy court to seize Schwartz’s assets, with the next hearing scheduled for July.

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The loan extension comes amid broader distress facing the office market, which has been hit by remote working trends since the pandemic. High interest rates have exacerbated difficulties since last year as loan maturities approach.

Atlanta’s office vacancy rate stands at nearly 25 percent, with more than a third of Class A office space available for lease. In the Atlanta Financial Center, about 275,000 square feet, or 30 percent of the property, is available, the outlet reported.

—Quinn Donoghue