Welcome Back, Bullishness
Polish up those resumes: The new Braves stadium could land Cobb County with 50,000 new jobs in the next 30 years, we learned yesterday at our Atlanta 2014 Forecast event. (How many of those jobs will be for second lefty relief pitchers?)
Cumberland CID's cxec director Malaika Rivers revealed that prediction during her keynote speech at St. Regis, noting that the CID's initial predictions see the $672M Braves stadium and $400M surrounding mixed-use development will also lead to 28,000 new Cobb residents over the next 30 years. (The line at Starbucks is about to get a bit longer.)
But how will that ultimately impact land valuations? That's a question Malaika says the CID is just now tackling. “I am in the process of reaching out to local real estate experts to get some opinion on 10-year trends on what they feel property valuations will be” to better predict budgets, she says. “I think that will help us get a good snapshot."
Many of our expert panelists used a word not heard about Atlanta in quite some time: “Bullish.” (In fact, for a couple years the word was banned from all schools and churches.) That's from both a real estate and an economic perspective. That includes Jamestown Properties' Matt Bronfman (on right with Seefried Properties' Ferdinand Seefried), fresh from huge success at his Ponce City Market project.
AMLI's Greg Mutz (on right with North American Properties' Mark Toro) is also bullish on Atlanta even though it lagged coming out of the recession—which actually may have been a benefit. Greg says he's seeing a slowing in areas of the country that roared into recovery earlier. (The tortoise and the hare seems to apply.) The company has a $2.2B development pipeline, and says its Old Fourth Ward project is “exceeding all our expectations,” leading AMLI to seek other development sites in Midtown and Buckhead. Still, rents will moderate from their rocketing growth rates in previous years, Greg predicts, perhaps to 4% this year across the US. “But I don't see a bust. I don't think we'll bubble at this point. It doesn't feel like '06/'07 to me.”
Carter chairman Bob Peterson was a little more cautious than most on the surge of development—particularly in multifamily—being fueled by Millennials' desire to live in town. Developers getting ahead of demographic shifts is “one of the dangers of an oversupply,” Bob says. “In my career, the best markets, if they're not supply-constrained… they will typically boom the best and bust the best.” He also says he expects Atlanta's economy to continue improving this year, but questions “whether it's going to be a little or a lot.”
Mark thinks it would be worse news if we didn't get out ahead of demographic shifts. “The consumer doesn't look like us. The consumer looks like our kids.” (Lip rings optional.) Mark says for the younger generation, walkability, being close to amenities, and a social scene is more important than a sprawling suburbia environment many of the older Atlantans were used to growing up in. “There are certain aspects of the real estate industry that are over. Maybe not forever, but I don't think I'm going to be building a power center in the suburbs in the next 20 years.”