- CIM Group is tapping into the municipal bond market with two bond issues totaling $556M to help fund its $4.2B Centennial Yards development in downtown Atlanta.
- The project will transform a defunct rail yard, known as “The Gulch,” into a pedestrian-friendly development with over 2.6K apartments, 2.9K hotel rooms, retail space, and a data center.
- Centennial Yards aims to complete its entertainment district before the 2026 FIFA World Cup, which will feature matches at nearby Mercedes-Benz Stadium.
CIM Group is turning to the municipal bond market to help finance its ambitious $4.2B Centennial Yards development in downtown Atlanta, as reported in Bloomberg.
Financing The Transformation
The ambitious project will convert a 16-block area, currently used as a parking lot and tailgating spot, into a vibrant mixed-use district featuring thousands of apartments, hotel rooms, retail spaces, and a data center.
The bond sales, totaling $556M, will be underwritten by JPMorgan Chase (JPM) and sold through the Atlanta Development Authority. These bonds are a crucial part of the financing plan, alongside a $175M loan from JPMorgan. The bonds are unrated and are being marketed exclusively to qualified institutional buyers due to their risk level.
Behind the Scenes
The pedestrian-friendly Centennial Yards development will add over 2.6K apartments and 2.9K hotel rooms to Atlanta’s downtown. The project will also include an entertainment district featuring a hotel, as well as 300 KSF of space for a data center.
The bonds will finance critical aspects of the development, including infrastructure and reimbursements to the developers for property taxes collected in the project area.
The first phase of the project is scheduled to be completed ahead of the 2026 FIFA World Cup, with Mercedes-Benz Stadium, located nearby, set to host eight matches.
High-Yield Appeal
The two bond sales reflect the strong demand for high-yield municipal bonds, which have outperformed investment-grade muni bonds in 2024. Investors are paying attention to the Centennial Yards project, given its scale and potential impact on Atlanta’s downtown.
Earlier this year, CIM Group employed a similar financing strategy for Miami Worldcenter, a mixed-use development in Florida.
Bonds for that project, due in 2041, were initially priced with a yield of 5.25%. Investor demand has driven yields down to about 4.8%, indicating strong market interest in high-yield municipal debt tied to large-scale real estate developments.
Why it Matters
The success of the Centennial Yards bond sales will be pivotal in determining the future of the $4.2B megaproject, which is poised to transform downtown Atlanta.
Despite some opposition to the incentives provided to CIM Group, the development’s progress will be closely watched as it pushes forward in the lead-up to the World Cup.
