Mirant agrees to reduce its total space in the Dunwoody, GA building to 216,000 sf for three years at an effective first-year rent of $14.50 per sf and an additional 50 cents-per-sf in the last two years, Cousins Office Division president Craig Jones says in a prepared statement.
Mirant also agrees not to dispute an unsecured back-rent claim by Cousins and JPMorgan totaling $16.7 million. Mirant filed for Chapter 11 protection under the US Bankruptcy Code July 14. The bankruptcy court in Fort Worth, TX still has to approve the lease restructuring.
"It's been a long process, but we are very happy that we've been able to find a solution that serves both Mirant's and ownership's current needs," says Jones. "With this lease, we were able to secure a tenant for three years with no significant out-of-pocket costs and leave the most desirable floors in the building available for new tenants."
Jones anticipates the office market in Atlanta "will be significantly stronger in three years and hopefully, during that time, Mirant will establish itself as a candidate for market-rate renewal." He adds, "the three years (lease) gives us time to examine additional ways to reposition the project."
Cousins and JPMorgan developed 1155 Perimeter Center West in 2000 as the headquarters for Mirant predecessor Southern Energy Inc. The 216,000 sf that Mirant has agreed to occupy includes a custom-built 67,000-sf trading floor and data center that consolidates the company's operations into the building's first six floors.
The lease calls for a net rental rate of $10 per sf in the first year; $10.50 per sf in the second year; and $11 per sf in the third year. "These terms are economically equivalent to the tenant paying a $14.50-per-sf rental rate in the first year, escalated by 50 cents each year, with the tenant receiving market tenant improvement allowance and with the partners (Cousins and JPMorgan) paying full broker commission," says Jones.
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