MassMutual Latest Win For Peachtree Corners Landlords
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For the Peachtree Corners office market, you win some and you lose some.
The latest victory: Financial services firm MassMutual just opened a new office in the suburban Gwinnett County city — some 20 miles north of Downtown Atlanta — in 11K SF at 3720 DaVinci Court. MassMutual is moving its local headquarters from Central Perimeter.
Peachtree Corners made sense for the company since many of its employees live in the suburban bedroom community and it serves many clients in the area, MassMutual Managing Partner Jeffrey Bulvin said.
When the firm did a scattergraph of where employees and clients lived, 80% were located in Gwinnett County and the northern metro area. On top of that, Bulvin said traffic conditions in Central Perimeter were becoming more of a burden to his workforce, which encompasses 100 employees here.
“We just realized that with the traffic patterns … this was a better move,” Bulvin said. “People who live in Johns Creek traveling 9 miles to Concourse, it was taking them an hour.”
MassMutual is the latest gain for Peachtree Corners office landlords in recent months. Last month, CarMax announced plans to open a 300-employee, 98K SF customer experience center at 5707 Peachtree Parkway. Last year, Hapag-Lloyd America, a division of German shipping giant Hapag-Lloyd, announced that it is expanding its office presence with a $5.5M investment, adding 363 jobs to its service center with positions in administration, technical support and customer service. And in 2016, Crawford Co. moved its headquarters from Central Perimeter to Peachtree Corners.
But some companies have packed up and left the submarket. Last week, Fleetcor announced that it was moving its longtime Peachtree Corners headquarters at 5445 Triangle Parkway for a 46K SF lease at Terminus 100, a 660K SF office tower in the heart of Buckhead. Other big losses for the submarket include RentPath's move to Buckhead in 2015 and Fiserv's move to Alpharetta in 2014.
Peachtree Corners is part of the larger Northeast Atlanta office submarket, which struggled last year, recording the metro area's worst office absorption with a loss of 257K SF, according to a recent Colliers International report. Northeast covers the larger Gwinnett County office market and not just Peachtree Corners.
Despite the exodus by many companies to Atlanta's urban core in recent years, cities like Peachtree Corners may be growing in attraction to smaller companies. They are drawn not only to the lower costs to lease office space — average office rents topped $18/SF in Peachtree Corners compared to $26/SF metrowide — but also because millennials are beginning to reconsider suburban life, especially as they have families, Stream Realty Partners Vice President Brian Howell said.
Howell represents more than 50K SF in office projects in the suburban city. He noted that some companies find Peachtree Corners attractive since they can build out spaces there with Midtown-level furnishings at a fraction of the cost.
Case in point, Stream recently helped audio-video company Avyve ink a new showroom next to its offices in Peachtree Corners to demonstrate its wall-mounted video screens.
“On the outside ... it kind of looks like an old vintage single-story flex property,” Howell said. But inside, Avyve was able to fit out rooms with giant video screens that would have cost much more to duplicate in Midtown — and at higher rents.
Peachtree Corners also is luring companies like MassMutual whose employees and customer base are on the metro area's northern ring. Leasing in Peachtree Corners allows for a more attractive commute, Howell said.
“Employers who live in that area don't want to deal with traffic,” he said.
Even though many companies have fled to Midtown or Buckhead in an effort to be more attractive to a millennial workforce, Bulvin said MassMutual is not concerned that a Peachtree Corners location will be a detriment to that, especially since many employees can telecommute to work from home. The firm is looking to nearly double its Atlanta office workforce within three years, with a big push to hire more millennials, he said.
“For me, to move to Midtown would have been a disaster for our firm. I have one human being who lives in Midtown. One. Why would I do that?” Bulvin said.
UPDATE, APRIL 9, 12:54 P.M. EDT: The story was updated with an interview with MassMutual Managing Partner Jeffrey Bulvin.
CORRECTION, APRIL 10, 9:20 A.M. ET: A previous version of the story incorrectly stated the address of MassMutual's new headquarters. The story has been updated.