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Real Estate Bisnow (ATL)

3630 Peachtree Ready To Break Records?

Could Chicago-based Heitman be breaking all pricing records for Buckhead trophy towers? (If so, we're gonna need more liquid paper because some jerk wrote all these records in ink.)

That's the word on the street. Sources say Heitman is under contract to buy 3630 Peachtree Tower, the Duke Realty/Pope & Land building in Buckhead that was put on the market in February. Sources also tell us Heitman could be paying somewhere around $380/SF, which would be a Buckhead record price per SF (and value the 425k SF tower at $161.5M). If this closes, it would eclipse the previous Atlanta tower sale record set by Parkway Properties, which purchased 3344 Peachtree for $346/SF in 2011 (although it paid a total of $167M) and the $343/SF sale of Pinnacle to TIAA-CREF in 2004. Sources say the firm could close on the deal as early as next month. (You all have one month to clean up in anticipation.) Officials with Heitman declined to comment and officials with Pope & Land Enterprises, Duke, and CBRE (who is brokering the sale) did not return calls seeking comment.

CohnReznick (Field) MATL
Fairlead (34 Park Tower)

Don't Ignore The Startups

Why has Atlanta's office market been so strong lately? Well, you should credit tech companies for some of that strength, says Technology Association of Georgia's Tino Mantella. Tino outlined the economic and CRE impact the Atlanta tech industry has had on the office landscape during our first annual Creative Office & Tech Summit yesterday morning at 271 17th St. “In my 10 years on the job, it's probably the best time it's been for technology,” Tino tells our audience of some 200. Tech firms netted some 20,000 new jobs here, and it's the highest-paid sector, with average salaries around $84k/year (about on par with journalists, we hear). The focus has been on financial (80% of payment processing is run through Georgia) and health IT mainly, but there's been growth in telecom, marketing, and data centers as well. 

AT&T Foundry's Roger Mahler says that Atlanta's tech industry still needs help, particularly with retaining and investing in startups that have segued to growth mode. “There is a chasm between the epiphany of an idea and that,” Roger says. “If I have one more person say, 'I'm going to move out to Silicon Valley,' I'm going to slug them. I've been to Silicon Valley and it's horrible.” (There's a man who's willing to back up his words.)

One way, certainly, is through incubator space, which Atlanta Tech Village's David Lightburn says has been borne out from the demand at its 100k SF Buckhead facility. The building at Lenox and Piedmont roads, undergoing $11.5M renovation, is more than 90% leased. And David says there's a waiting list for the suites being renovated now. (It's easier to get into a nightclub.) “Over 50% of our building is shared space, community space. There's a feeling of more stability in that,” he says. “If you're on your own and silo'd by yourself, it's very easy to succumb to those highs and lows [of running a startup].”

Uber's Keith Radford (on right, who traded quips with CrowdVested's Grady Thrasher, who moderated our panel) spoke about the challenges of startups and office space. When he launched Uber in 2012 in Atlanta, he was quickly kicked out of his first West Atlanta office space because of all their drivers who came by the office. Now in The Lumberyard, his firm has almost 20 employees locally. “Atlanta doesn't get the recognition that is deserves in terms of startups,” he says.

For landlords, bandwidth has become the new utility, says North American Properties' John Kelley. NAP is putting gigabit Internet at Avalon, and John says that's been a huge lure for prospective tenants. And Atlanta, he says, needs to catch up: “Cities like Provo [Utah] and Austin, these cities are way out in front of the curve by getting these gigabit structures.” And the bandwidth has nothing to do with today's data usage. The pace of technological innovation, when you look out 10 years in the future, it's something landlords will need to invest in and upgrade. “We'll never have to upgrade what we have in Avalon,” he says. (Someone should tell iTunes to adopt that model and stop asking us to upgrade to a new version every six hours.) “By bringing that in on the front end, we're trying to get ahead of the curve.”

Stewart Title (29Senior) ATL
Cushman Wakefield (OnTop) ATL
REFM (Valuate) ATL
Bisnow (Niche-White) HALF

Live from BLIS!

Yesterday, Daily Caller editor and TV talking head Tucker Carlson kicked off our national hotel investment conference in DC, BLIS, saying swift changes in demographics, free markets, religion, and ideology are having a profound effect on politics—citing Mitt Romney's recent support of a minimum wage hike as a prime example of how things have shifted. As for 2016, Tucker says that while Hillary Clinton is the presumed Democratic frontrunner, Massachusetts Sen. Elizabeth Warren is actually his pick to take the nomination, since her politics are more with the party than Hillary's.

450 hospitality pros have descended on the brand-new Marriott Marquis hotel in Washington, which is—at 1,175 room—the largest hotel in the city. We also heard from Trump Hotels COO Jim Petrus, Thayer Lodging chairman Fred Malek, and 40 other hotel experts.

Anybody have a spare $400/SF so we can beat Heitman? Let Jarred@Bisnow.com know.



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