The 10 Biggest Atlanta CRE Stories Of 2018
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Commercial real estate news in 2018 was filled with words like scooters, Midtown, Gulch and Amazon.
Even though Atlanta didn't win Amazon HQ2, there were plenty of projects that made headlines in a busy year for developers and brokers, from new headquarters buildings to new areas of the city heading for a development renaissance.
Not all news is good news, and Atlanta found itself grappling with things like protests over developer incentives, rising housing costs within the city and ever-present gridlock.
Here are Bisnow's top 10 stories for 2018.
10. The Westside Boom
Midtown Atlanta has been celebrating a renaissance in recent years. Companies have been clamoring for space to take advantage of Georgia Tech's steady stream of educated prospects. Developers added more apartments to make way for new residents seeking a lifestyle away from the suburbs. But 2018 saw a boom-within-a-boom as developers flocked to West Midtown (aka Westside).
The reinvention of the Bellwood Quarry as a new park and the continued extension of the Atlanta BeltLine were both catalytic in sparking new developments, including with former New York Yankees and Atlanta Braves first baseman Mark Teixeira, whose firm, Urban Creek Partners, is developing a mixed-use project next to the quarry. Other developers, some better known for traditional office towers, are taking the gambit in the Westside on adaptive reuse projects, such as Selig Enterprises' The Works development.
9. Scooters Become A Thing
Who knew that motorized skateboards with handlebars would create so much buzz in the city? But electric scooters, and the booming business of scooter rental companies, are an urban phenomenon that appears to be here to stay.
Many proponents highlight their convenience — many allow a user to pick one up and drop it off anywhere in the city — and the fact they are a more efficient way to travel around the urban landscape.
“To me, the answer to these traffic problems are these scooters,” Transcend CEO Patrick Braswell recently told a Bisnow audience.
With change comes pain. Scooter companies operate in 65 cities in the U.S., often appearing overnight and without local input.
Some complain that scooter users clutter sidewalks with the devices, blocking wheelchair ramps, and weave through crowds and ignore traffic rules. That has led to certain cities banning their use or severely limiting the number of companies that can operate.
Atlanta could soon join them. Officials this year have begun to study possible regulations that may come to fruition next year.
8. Affordability And Gentrification
While affordable housing has been a mounting issue since the end of the Great Recession, and as millennials and retirees flocked back to the city to live, this year Atlanta's struggles took the national stage after a Wall Street Journal story.
Issues of gentrification are especially prominent along the BeltLine. On the Westside and West End neighborhoods along it, single-family home and condo prices rose 54% and 110%, respectively, from 2014 to 2018, the WSJ found.
This has led to a number of efforts to boost the city's affordable housing stock, including Atlanta BeltLine Inc. seeking to add 10,000 new affordable units by 2030. Atlanta Mayor Keisha Lance Bottoms recently named Atlanta Department of Planning and Community Development Deputy Commissioner Terri Lee as a sort of affordable housing czar for the city, leading various initiatives to preserve and boost affordable units.
City officials are looking to expand the BeltLine's year-old inclusionary zoning rules to encompass for-sale product as well.
7. Developers Make Big Downtown Bets
The Gulch may have grabbed all the headlines, but many other developers are active in Downtown Atlanta, creating what may be the city's core 21st century renaissance. That includes the new Mercedes-Benz Stadium as well as the redevelopment of Turner Field into a stadium for Georgia State University.
Developers such as Kaplan Residential, Drapac Capital Partners and German investor Newport are making big investments in the area. Newport revealed redevelopment plans for more than 40 Downtown buildings along Peachtree, Mitchell and Broad streets as well as along Martin Luther King Jr. Drive.
“For us, it's a wave. I think Downtown is finally in the right position to be able to start to develop a lot of the properties,” Kaplan Residential founder Morris Kaplan previously told Bisnow. “The commitments of other developers coming in, whether it's WRS or Jamestown [Properties] or Newport, all these developers are coming in here.”
6. Famed Apartment Developer John Williams Dies
Known as the grandfather of the modern garden-style luxury apartment, Preferred Apartment Communities co-founder and CEO John Williams died unexpectedly in April. His legacy, though, will reverberate in Atlanta multifamily for years to come, being one of the first to tie a company's brand into the idea of luxury living.
The founder of Post Properties, Williams brought lush apartment living to Atlanta's suburbs during the 1980s and 1990s. After resigning from Post in 2003, he moved on to create Preferrred Apartment Communities, which invested beyond just apartments.
“John was a legend in his time in the apartment business,” Trillist Cos. CEO Scott Leventhal told Bisnow. "I think he single-handedly defined what luxury apartment living is in the United States."
5. AT&T Consolidates
While many companies announced expansions and relocations into the metro area, one of Atlanta's biggest corporate citizens went the opposite way.
At the start of the year, AT&T announced that it was consolidating its vast office footprint in the city, including vacating the Carl Icahn-owned AT&T Building in Midtown, a 49-story, 1.4M SF tower that the telecommunications giant occupied out of for years. The company also vacated two of its buildings at its Lenox Park Buckhead campus, moving employees to Midtown I and II off West Peachtree Street.
The consolidation dumped more than 1M SF of office availability into the Midtown and Buckhead submarkets. Icahn Enterprise Holdings has begun renovating the tower in a plan to start marketing it to multiple tenants.
4. Thyssenkrupp Moves HQ To The Battery at SunTrust Park
What do baseball and elevators have in common? They are co-locating in Cobb County.
Thyssenkrupp announced earlier this year that it was developing a facility for its U.S. elevator headquarters division at The Battery at SunTrust park, a project that will include a 420-foot elevator testing tower.
The $200M, 235K SF project will allow Thyssenkrupp Elevator to house 900 full-time employees — 6% of its workforce — in the facility, including information technology, engineering, administration and training positions.
3. Atlanta, CIM Group Overcome Resistance To Approve Gulch Deal
It appeared that the stars were finally aligning for a vast sea of asphalt in Downtown Atlanta when Los Angeles-based CIM Group expressed interest in buying the property from the city to turn it into a massive mixed-use development.
But not everyone shared in that vision, or at least supported the massive amount of incentives that were ultimately approved by the city to make the numbers work for CIM at the Gulch.
Opponents came out in force against a proposed $1.9B incentive package during city council meetings, expressing concerns about further gentrification of the city and crying foul at the enormous tax breaks handed out to a developer.
After public support from some heavy hitters, including former Atlanta Mayor and U.N. Ambassador Andrew Young, the city approved the Gulch incentive package in November.
But the fight may not be over. Opponents to the Gulch deal — known as Redlight the Gulch — are headed to Fulton Superior Court Friday to offer a host of objections to the validation of the Gulch bonds.
2. Norfolk Southern Moving HQ To Atlanta
In one of the biggest headquarters wins since Mercedes-Benz moved from New Jersey to Atlanta, Virginia-based Norfolk Southern announced plans in November to not only move its headquarters to Atlanta, but also to have Cousins Properties develop a new office building for it in Midtown.
The win, though, was hard-fought, and intricately tied into whether the city of Atlanta was ultimately able to approve a $1.9B incentive package for CIM Group to redevelop the Gulch, of which Norfolk Southern was part owner.
1. Atlanta A Bridesmaid For Amazon's HQ2
When the retail giant announced a 20 localities as finalists for its much-ballyhooed second headquarters project, there were some in Atlanta who saw a chance for the region to shine again like it did when it hosted the 1996 Summer Olympics.
The $5B project promised thousands of new high-paying jobs and a real chance for the winning city to rise in stature on the world economic stage. Rumors swirled around business and real estate circles for months, even creating an online community of conspiracy theorists poring through clues that may have hinted where Amazon would ultimately put the project.
The result was a shocking curveball: Amazon instead split the second headquarters in two: Long Island City, New York, and in Northern Virginia. Atlanta, like 18 other regions in North America, was left out in the cold, prompting criticism over Amazon's decision and strategy.