Bankruptcy Watch: The Grant Building (Downtown Atlanta)

The Grant Building, located at 44 Broad Street NW in downtown Atlanta’s Fairlie-Poplar Historic District, is one of the city’s most architecturally significant properties. Originally constructed in 1898, the 10-story, approximately 125,000 SF building is among the oldest surviving steel-framed skyscrapers in the Southeast and is listed on the National Register of Historic Places.

In December 2022, the property was acquired as a renovation and redevelopment opportunity by New Grant Acquisitions, LLC, an entity formed as a joint venture between Wolfe Investments and Bluelofts Inc. The building was roughly 10% occupied at the time of sale, with plans to convert the historic office asset into a 155–165 room serviced apartment or hotel-style use. Overtime, there was discussion of being converted to Sonder, which is now a bankrupt hotel brand. 

The acquisition was financed through a layered capital structure that included a $36.5 million loan commitment from UC Funds and an additional $6.5 million loan from Lincoln Savings Bank.  Despite early progress on interior preparation, the project stalled, end up with liens, the entity was sold to the general contractor, and ultimately entered Chapter 11 proceedings. The property also reportedly qualified for historic tax credits, though it is unclear the current status of such, or how much value could be as a result of the credit.The property is now being marketed through a court-supervised bankruptcy sale process in the U.S. Bankruptcy Court for the Northern District of Georgia (Case No. BK 25-61599-PWB).

What Led to This Outcome:

While bankruptcy filings often reflect multiple converging pressures, this case highlights several structural and market dynamics that frequently challenge historic adaptive reuse projects:

• High Leverage on a Transitional Asset: A multi-tier capital stack for a conversion project on a historically older building, made it difficult to service layered debt during a period of limited occupancy left little margin for schedule delays or cost overruns.

• Execution Risk in Historic Conversions: Adaptive reuse of landmark buildings often uncovers unforeseen construction and compliance complexities. Even when a project is “prepped for full interior build-out,” as marketing materials note, execution risk remains materially higher than ground-up or stabilized assets.

• Changing Strategies: Based on previous news articles, this project was originally slated to be apartments. It was then converted to be operated as a hotel for Sonder. It is currently being marketed as a hotel, but would most likely generate the highest value as apartments in this location.

• Market Shifts During Project Timeline: The planned repositioning coincided with a period of elevated interest rates, tightening construction financing, evaluated construction costs, and shifting demand dynamics for downtown lodging and serviced apartment concepts factors that disproportionately affect long-duration redevelopment projects.

None of these factors are unusual in isolation. Together, they illustrate how timing, leverage, and structural complexity can compound risk in historic redevelopment efforts.

Why the Entity Structure Matters

The bankruptcy filing of New Grant Acquisitions, LLC brings renewed focus to how entity design influences outcomes when projects encounter stress.

Properly structured bankruptcy-remote entities can help isolate risk at the asset level, clarify creditor rights, and create more orderly pathways for restructuring or recapitalization. Features such as independent directors, clearly defined separateness covenants, and disciplined governance frameworks do not prevent market disruption but they can create earlier intervention opportunities and reduce uncertainty when conditions deteriorate.

For complex redevelopment projects, particularly those involving layered debt and long construction timelines, entity structure is not merely a legal formality. It is a risk-management tool that shapes how challenges are addressed long before a court filing becomes necessary.

A Broader Pattern the Industry Should Note

The Grant Building case reflects broader pressures facing adaptive reuse projects in urban cores nationwide. As older office assets seek new life through conversion to hotel, residential, or mixed-use formats, sponsors are navigating a narrow corridor between preservation costs, financing constraints, and evolving demand.

Across markets, similar projects have encountered stress where capital structures assumed uninterrupted access to capital markets or underestimated the duration and complexity of historic redevelopment. In this environment, resilience increasingly depends on conservative leverage, flexible governance, and entity structures designed for durability, not just execution speed.

For lenders and sponsors alike, these cases offer an opportunity for pattern recognition rather than hindsight critique.

Final Thought:

Historic vision without structural durability increases risk especially when market conditions shift mid-project.

Building Resilient Structures

For sponsors and lenders pursuing complex redevelopment or adaptive reuse strategies, early attention to SPE structuring, governance design, and bankruptcy-remote protections can meaningfully influence outcomes. These considerations are most effective when addressed at formation well before capital is deployed and timelines are compressed.

Source: Morningstar/news