One of Georgia’s largest healthcare systems will occupy a chunk of space in a Midtown office tower, hinting at a potential recovery for the struggling submarket, while still pushing up the Atlanta metro’s overall vacancy rate.
Piedmont Healthcare has leased 164,000 square feet and acquired the naming rights at 271 17th Street NW, a 25-story, Class A office tower owned by Houston-based Lionstone Investments, Bisnow reported.
Cushman & Wakefield’s Aileen Almassy and John Zintak represented Lionstone in lease negotiations, while Bo Keatley, David Rubenstein, John Flack and Michael Broome of Savills represented Piedmont.
The deal marks the largest office lease of the year in Atlanta, and is the second largest lease in the region, trailing Manhattan Associates’ 210,000-square-foot renewal in Cobb County’s Wildwood Center.
Though Piedmont’s new lease is huge, it is actually the result of a major consolidation effort. Piedmont currently occupies 235,000 square feet at the Paces West office property in Vinings, along with office space at Piedmont West off Howell Mill Road and 2001 Peachtree Street.
Overall, Piedmont is shrinking its Atlanta-area footprint by more than 50 percent, the outlet reported.
“We have been assessing and planning for a more efficient and consolidated space overall the past several years,” a Piedmont spokesperson said in a statement. “This new location provides our organization with a better place for working together more efficiently and effectively.”
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Conversely, Piedmont’s lease is a big win for Lionstone and Midtown, where vacancies rose to a record-high of nearly 21 percent at the end of 2023, according to Colliers. The submarket also experienced a 40 percent decline in leasing activity year-over-year in the fourth quarter, with a negative net absorption of 337,000 square feet.
Fantasy sports company PrizePicks flashed another glimmer of hope for Midtown last month, when it leased 33,000 square feet at the 15-story Star Metals Offices, with plans to relocate from a 22,500-square-foot space from the nearby Promenade Tower.
—Quinn Donoghue