Manulife US Real Estate Investment Trust (REIT) is selling a 28-storey office building in Atlanta, Georgia for $133.8m (€120.1m) to help pay down debt.
The Singapore-listed US REIT said it has agreed to sell the Peachtree office building, a deal that will enable the company to make an early repayment of its 2026 debts, bringing the total debt repayment to around 78% of total debts due in 2026.
John Casasante, CEO and CIO of Manulife US Real Estate Management, the manager of Manulife US REIT, said from the onset of the firm’s recapitalisation plan, management has prioritised risk management to enable Manulife US REIT to meet its upcoming debt obligations.
”The sale of Peachtree will enable us to reduce a substantial portion of our 2026 debts and achieve 82% of the net sales proceeds target under the master restructuring agreement, putting Manulife US REIT in a stronger position to negotiate a path for recovery and growth with its lenders.”
Casasante said along with the previous divestments of Capitol in California and Plaza in New Jersey, the repayment from this divestment of Peachtree “as well as cash contribution from our balance sheet” will bring Manulife US REIT’s total debt repayment to close to $290m since November 2024.
“We remain focused on moving Manulife US REIT towards recovery as soon as possible so that we may return to a growth trajectory,” he said.
Casasante added that the heightened economic uncertainty surrounding trade policies, on top of ongoing challenges which continue to hamper office transactions such as remote and hybrid work arrangements and lack of financing, have created a challenging commercial real estate environment.
“We remain in active discussions on the divestment of additional properties. In view of current headwinds, we believe that disposing Peachtree would enable us to mitigate risks and achieve the best possible outcome for unitholders.”
To read the latest IPE Real Assets magazine click here.
