Need For Speed: Southside Developers Race To Get Projects Started Before Next Recession
One of the biggest redevelopment efforts south of Atlanta is pushing to get started very soon in a bid to get ahead of the next recession.
Leaders of the Fort McPherson LRA are expected to roll out a new master plan for the future redevelopment of a 145-acre portion of the former U.S. Army base with an effort to start it very soon, Fort McPherson LRA Executive Director Brian Hooker said during Bisnow's Southside Atlanta event Wednesday.
“A lot of [people] recognize that we're at the end of this real estate cycle. Getting a project like ours on the Southside off the ground, we got to do it before the downturn,” Hooker said. “Projects like ours suffer the most in a recession.”
While Hooker did not disclose details of the new plan, he did tell Bisnow following the panel discussion the first phase will include 1.2M SF, valued at $240M of the total estimated $700M build-out of the project. Hooker also said there are plans for a 200K SF office building. Phase 1 is targeted to break ground in the next 12 months.
When asked when he expects a recession, Hooker said he was unsure.
“That's why we're looking to move fast,” he said. "[But] I'm optimistic that it's not going to come that soon."
Atlanta-based Macauley Investments has been tapped as the master developer. On its website, the developer described the project as consisting of four districts: a town center and destination district that will include residential and retail, an office district, a historic district and a park district.
“The project will be a national model of sustainable, transit-oriented and mixed-use development, focused on education, job creation and training, affordable housing and healthy living,” Macauley officials said.
Once the pioneer developers establish the Fort McPherson project, Hooker said he expects success to breed success.
“This isn't something that every investor in Atlanta is coming to,” he said. “[But] we are planning to have some pretty high-dollar land sales at Fort McPherson in Phase 3.”
AAC Group, which is in final talks to manage a $500M, 320-acre mixed-use project for the city of College Park near Hartsfield-Jackson Atlanta International Airport, is also looking at speed to market as a key factor in its success, partner Jim Lowe said.
“This is the time,” Aerotropolis Atlanta Alliance Chairman Shannon James said. "And if we don't do the job that we're supposed to do during this period, we could miss the boat."
Panelists at the Southside event, speaking before a packed house of more than 200 at Virginia Crossings in Hapeville, highlighted various trends affecting commercial real estate, from the price of land to the tightness in the area's industrial market.
"Nationally, we've got a product problem with industrial," Red Rock Developments President John Barker said. "There's not enough of it."
When it comes to housing, there is a lot of pent-up demand in the Southside, panelists said. Newmark Knight Frank Executive Managing Director Steve Morgan said there is a lack of housing in the area to accommodate the growth, alongside Delta Air Lines' headquarters employing 6,000 people and Wells Fargo with another 3,000 people nearby.
Air Realty Partners Managing Partner Rod Mullice saw that pent-up demand when he delivered ThePad on Harvard project. One of the Southside's first Class-A apartment project in years — completed in February 2017 — is now more than 90% leased.
Air Realty is planning a second ThePad on Harvard development on an undisclosed site in the area, Mullice said. He saw evidence of housing demand given that the College Park area has 75,000 people during the daytime, which dwindles down to 15,000 at night; a sign of a commuter population.