Office Could Rise On Piedmont Next Door To Disco Kroger
A new office building could rise in Buckhead next to the famed Disco Kroger.
Coro Realty Advisors' John Lundeen told a packed house at Wednesday's Bisnow Buckhead Update event that the firm was eyeing a possible office development next to Piedmont Peachtree Crossing, the Kroger-anchored shopping center off Piedmont Road that became known as the “Disco Kroger,” due to a famed dance club in the center during the 1980s.
The site is adjacent to Coro's Buckhead Place mixed-use center. When pressed for details following the panel, Lundeen said, “we're not there yet” on the office project. He said it would be built on a parcel originally slated for residential. There is no finalized design nor has any debt been secured for the project, he said.
The topic arose during a panel discussion on the future of Buckhead office rents, during which Tishman Speyer managing director Chris Ahrenkiel predicted they could rise to $50/SF in the next decade, given there are only a handful of viable sites left to develop office, especially Regent Partners' planned, $400M, office-centric project at 3354 and 3356 Peachtree Road, behind Capital City Plaza.
The project could include 550k SF of office and retail space, along with 300 apartments, in a JV with Batson-Cook Development Co. Ahrenkiel said beyond that, new office development would likely be done by demolishing older properties, a process that adds cost to the investment basis, and means developers would at least need to achieve $50/SF office rents.
“We'll get there eventually, but you know it will be a challenge,” he said.
“It is a balancing act coming up with the right numbers,” Lundeen echoed after mentioning Coro's potential office project.
Lundeen did not offer details on the office but said he believed the developer could build 20 stories on the site. He also said achieving rents in the $40/SF range could justify development.
Ahrenkiel and Lundeen were part of a panel focused on Buckhead's mixed-use environment, including EDENS' Herbert Ames, Loudermilk Cos' Robin Loudermilk, SRS Real Estate Partners Ray Uttenhove and moderator Jeffrey Graham of The Graham Group.
Uttenhove said had both Lenox Square and Phipps Plaza been built today, they would be open-air shopping destinations. Nonetheless, the two malls are the prime destinations for luxury retail shopping.
“I'd be worried about Macy's and Lenox and Phipps if they weren't where they are with the kind of shopping coming from the Southeast,” Uttenhove said.
But today's brick-and-mortar retailers are facing the need to transform business practices in light of e-commerce by having fewer stores, a smaller footprint and using multi-channel outlets to sell to consumers, she said. It has been a trend that has been “accelerating the demise of retailers that should have gone away a long time ago."