Is Buckhead Land Tapped Out?
That's the assessment from two of the district's top developers during our Buckhead Renaissance event yesterday. Tishman Speyer's Chris Ahrenkiel and Regent Partners' David Allman declared that the commercial district of Buckhead is now officially supply-constrained, with no more prime development sites left--at least after they finish their mega projects. David says this dynamic is present “for the first time in history in Atlanta.”
There may be some truth to this argument beyond marketing posturing. AGH's Wes Hudson (our moderator) points out there are 480 hotel rooms, in excess of 5,700 apartment units and more than 1M SF of new office underway or in the pipeline in Buckhead. At the same time, nearly all of that prime Class-A space is filled, with only four blocks of 50k SF or more left in the submarket for office tenants, Chris says. Unless dynamics change, there are no real prime sites left to play with in Buckhead's commercial district.
With more than 250 on hand at the St. Regis, the all-star Buckhead lineup included: Wes, OliverMcMillan's Hunter Richardson, JEDunn's Michael Bartlett, Simon Property Group Mall COO John Rulli, Cushman & Wakefield's Aileen Almassy, Chris and David. (Buckhead CID's Jim Durrett is not pictured but was also a panelist.)
OliverMcmillan's Hunter Richardson cited projects from The Hanover Co and Gables as evidence that the Buckhead Village area was seeing a resurgence. In fact, over the next two CRE cycles, Hunter says development in Buckhead will focus on the Village and south along Peachtree Road as land plays in the commercial district run dry. “There are more and more things happening that are changing the character of the Village,” he says.
John says existing landlords could look to redevelop in supply-constrained environments--even higher than before, assuming they control air rights. (Can birds be NIMBYs, or NIMSkys?) Case in point: Simon is looking to do a 56-story office/condo project in Downtown Boston since virgin territory is nonexistent. While not going sky-high here, Simon is adding an AC Hotel and a six-story residential project to Phipps Plaza. John also called its two Buckhead malls--Phipps and Lenox Square, with 30M visitors/year combined--among the top eight malls in the country, a “shopping mecca” that is comparable to the best shopping districts in the country, including Madison Avenue.
After the panel, David confirmed for us that, yes, Concourse Corporate Center will hit the market. In fact, it did so officially this week; Eastdil Secured was tapped to sell the 2M SF Central Perimeter office complex with the iconic King & Queen buildings. Regent itself purchased the property for an eyebrow-raising $300M back in 2012.