The two office towers that anchor State Farm’s Southeast regional hub in Dunwoody are officially up for sale, with the property’s owners aiming to cash in on a resurgent appetite for trophy office assets. Park Center II and III, totaling roughly 1.1 million square feet, could fetch bids around $450 million, a figure that would make it one of the largest office sales in metro Atlanta in years.
Compatriot Capital has tapped Newmark’s Atlanta office to market the two buildings, according to Bisnow. Jay O’Meara, who represents ownership for Newmark, described the property as a special asset, per the same report. Park Center II spans about 621,000 square feet and includes roughly 39,000 square feet of ground-floor retail, while Park Center III accounts for about 440,000 square feet, Bisnow reports.
What makes the offering especially attractive to institutional buyers is the tenant behind it. State Farm still has ten years and $527 million of rent remaining on its lease, backed by the insurer’s AA credit profile, according to the same Bisnow report. That kind of long-term, investment-grade income is rare in today’s suburban office market, where landlords have struggled to find tenants willing to sign leases of any real length.
How Dallas-Based KDC Ended Up Owning State Farm’s Own Buildings
The ownership history behind Park Center II and III traces back to KDC, the Dallas developer that originally built the towers for State Farm between 2020 and 2021, per the same Bisnow account. KDC then purchased the buildings back from State Farm in 2022 in a sale-leaseback deal, according to REBusinessOnline, which reported the transaction encompassed 1.06 million square feet of office space, 39,000 square feet of retail, a 4,000-space parking garage, and a 2.6-acre development pad. Compatriot Capital holds an equity interest in KDC, a relationship that traces to Cadillac Fairview’s 2021 acquisition of a 50% stake in the developer, as detailed by GlobeSt, which noted Cadillac Fairview also launched an $800 million U.S. commercial office fund alongside Compatriot at the time…