Atlanta's Fastest-Rising Amenity? MARTA, But Not By Choice
The competition for office tenants is an amenities arms race, but in car-centric Atlanta, public transportation has become the trump card in negotiations for corporate relocations.
While other trendy features of an office building — its outdoor space, technological capabilities, hotel-like lobbies — have risen in prominence in leasing discussions, MARTA always comes up first, said Colliers International Senior Vice President Jodi Selvey, who leads the brokerage firm's occupier services division in Atlanta.
The MARTA priority is not because employees are demanding it. Rather, the number of employees companies are now packing into their offices has thrown parking ratios out of whack, and those companies have to present a driving alternative if they want to attract talent to their fancy new offices.
"Office tenants are being forced to get close to a MARTA station because there is simply not enough parking, that’s a fact," said Selvey, who recently brokered a lease for Insight Global to kick-start construction on an office tower being developed at the Dunwoody MARTA station. "MARTA has to be an option. Whether someone takes it, that’s a whole different story ... Adoption and office tenants wanting it are two very different things."
For new buildings in most urban neighborhoods in Atlanta, parking ratios are capped at two spaces per 1K SF, according to Cousins Properties Managing Director Thad Ellis, while most companies are looking for leases with around 150 SF per employee. The numbers do not add up for every worker to drive to work.
"As tenants renew or look for more space, they want to be more efficient, [with] tighter ratios, but the parking demand is still there," Ellis said. "If a big corporate user is in 100K SF today, looking ahead, they’d like to shrink that to 80K SF. They still have as many employees, and as much parking need, if not more."
The transition must happen — Atlanta is in the midst of a population boom, and the roads in the city are not made to handle the number of cars that drive on them now, let alone when the area is expected to grow by 2.3 million people in the next 30 years — even if current Atlantans are not quite ready to embrace it.
"We love our cars in Atlanta. We drive across the street for a dinner party," Selvey said. "I think [transit] will slowly become adopted and I think that the millennial generation is going to lead the way, because I think they’re going to draw the short end of the stick when parking spots are allocated."
While office landlords without locations close to MARTA cannot do much to add public transportation, two words are going to define 2018's office market, according to Selvey: hospitality and flexibility.
"We’ve had people in here pitching to us in the last few months, all of the lobbies use the term 'hospitality.' Last year it was 'activate,' this year it’s hospitality," she said. "They want the lobbies to feel more like hospitality, it needs to feel more like a hotel lobby than a cold office building."
Soon, the next buzzword might be connectivity. WiredScore, the company that rates buildings for how technologically advanced they are, launched its presence in Atlanta Wednesday. JD Jeske, a former office broker with Avison Young and CBRE, is heading up the company's operations in the city.
The company chose Atlanta as one of its next primary markets — it already has a strong presence in New York City, where it was founded, Boston and D.C. — because of the strong, and still growing, presence of technology and information technology jobs in the region. WiredScore rates buildings on connectivity, infrastructure and readiness, and buildings can receive a certification and scores of silver, gold and platinum.
"From my background in commercial real estate, tenants are asking these [connectivity] questions earlier in leasing decisions," Jeske said. "We’re shedding light on a really complicated pain point for tenants and landlords. Coming from the brokerage world, this is something that’s pretty important to tenants."
Learn more about the hottest topics in office design, technology and construction at Bisnow's Atlanta Office of the Future March 28 at Securities Centre.