5 New Midtown Atlanta Office Developments That Could Soon Rise
The momentum in Midtown could be propelling developers to unload some 1M SF of shiny new office space without a single tenant in tow.
Cousins Properties, Selig Enterprises and Greenstone Properties are among the developers considering starting construction on new office projects in Midtown speculatively, meaning no company has committed to signing a lease. That would be on top of Hines Interests' T3 project, built on spec, expected to open by the end of the year, still without a tenant signed.
There are certainly big deals eyeing the Midtown market, including possible relocations for law firms Jones Day and Smith, Gambrell & Russell, as well as Starbucks. Those requirements are on top of some noteworthy companies already in Midtown with leases nearing their expiration has a host of developers considering new office projects.
“It's always a challenge to match supply to demand. But it's also true that Midtown is hot in ways that I don't think are likely to abate,” Transwestern Director of Research Keith Pierce said.
Pierce said some 1M SF of leases 75K SF or larger are set to expire between now and 2025. The earliest a new office building can be delivered, assuming it breaks ground right away, would be 2020.
Beyond existing Midtown tenants, there could be upward of 4M SF more in deals from companies looking to relocate into Midtown, Atlanta-based Greenstone Properties partner Chris Scott said.
The number of new potential office developments in Midtown mirror that of what happened in Buckhead in the run-up to the Great Recession. At that time, five office towers kicked off without a single tenant agreeing beforehand to take any of the space. It was a scenario that caused the Urban Land Institute to famously predict a “bloodbath" for office landlords in that submarket, a prophecy that turned out to be true in the short term.
But many do not expect a similar mishap in Midtown. For one, very few developments have started on a speculative basis, with the exception of Hines' T3 project.
“There's a lot more developer restraint right now than there was in 2006 and  when those developments kicked off,” JLL Managing Director Adam Viente said. “I would be surprised if any of the developments that are being pitched right now in Midtown will go 100% spec.”
Here are the handful of potential new Midtown office developments and their current status:
T3 West Midtown and Atlantic Yards
- Developer: A joint venture of Hines and Invesco
- Location: 383 17th St. in Atlantic Station
- Size: 203K SF
- Status: Under construction
Hines moved forward with this timber-framed office project last year, with expectations that it will deliver by the end of 2018. It is one of the few office developments in Midtown to launch completely on spec.
“We've taken a bold move to be first launched,” Hines Senior Managing Director John Heagy said. "And we think we're in good shape as a consequence of being launched."
Hines has already fielded interest from WeWork to potentially anchor T3, Heagy said. Hines was recently approached by the coworking giant about the T3 building, but said the developer has yet to submit an offer.
“A lot of buildings are talking to WeWork these days,” Heagy added.
“We have no new locations or ventures in the area to officially announce at this time,” WeWork Southeast General Manger Bobby Condon said.
T3 is part of a larger plan by both Hines and Invesco for 700K SF in new office at Atlantic Station. The other planned project is the two-building, 500K SF Atlantic Yards project. Heagy said Hines will decide by this fall whether the developer will break ground on Atlantic Yards on spec.
“By that time, we'll know we're ready to go spec like we did with T3, or if we'll go with a pre-lease,” he said.
8th & West Peachtree
- Developer: Cousins Properties
- Location: 901 West Peachtree St.
- Size: 470K SF
- Status: In planning stages
Fresh from its success with developing NCR's corporate campus in Midtown, Cousins secured this site earlier this year with plans for a 31-story office tower. And like Hines, Cousins is mulling whether to break ground on the tower without any tenants in tow, Cousins Managing Director Matt Mooney recently told CoStar.
“We have about six months remaining in the predevelopment process to make that decision,” Mooney told CoStar. "However, we are in a fantastic position with a strong pipeline of interest from [prospective] tenants, a low-leveraged balance sheet and a large untapped credit facility [to fund the development]."
1105 West Peachtree St. and 1125 Peachtree St.
- Developer: Selig Enterprises
- Location: 1105 West Peachtree and 1125 Peachtree streets
- Size: Nearly 1M SF of office combined
- Status: In planning stages
Selig, now in a development mode, has two mixed-use Midtown projects with significant office components in the pipeline. But at this point, the developer will only likely move forward on the larger 770K SF 1105 West Peachtree project with significant pre-leasing, Selig Development Chief Development Officer Steve Baile said.
The smaller, 1125 Peachtree could be another story, Baile said. That project has less office — 207K SF — but includes a larger mix of uses, including 56 residential units and 253 hotel rooms, according to plans filed with the Midtown Alliance.
Baile said there are no definitive plans at this point to go spec on the project, but it would be more likely to launch on that basis over 1105 West Peachtree if Selig decides to go that route. Baile said the developer could decide by the end of the summer.
- Developer: MetLife Investment Management
- Location: 1295 Spring St.
- Size: 500K SF of office
- Status: In planning stages
MetLife, in conjunction with JLL, recently revealed plans for its more than 8-acre mixed-use project on an assemblage that is home to a collection of older buildings and the Nan Thai Fine Dining restaurant. Aside from the office tower, MetLife is eyeing 87K SF of retail, a hotel and residential situated around a central pedestrian promenade.
It is unclear as of press time whether MetLife would go spec on the project.
“We’re continuing to see strong interest from potential tenants on leasing space at Midtown Union,” said a MetLife Investment Management spokesperson, who declined to comment on leasing specifics or the timeline for breaking ground.
14th & Spring and NOVEL Midtown
- Developer: Greenstone Properties and Crescent Communities
- Location: 1150 Spring St.
- Size: 250K SF
- Status: Working toward a Q4 groundbreaking
Atlanta-based Greenstone Properties plans to deliver its office portion of the mixed-use project by the end of 2020. At the moment, it is working with the city toward obtaining a land disturbance permit on the 2.5-acre site, Greenstone partner Chris Scott said.
The $100M project will include a 10-story, 250K SF office building connected to a parking deck. Crescent is on tap to develop a 350-unit apartment complex on the site as well.
Scott declined to name its equity partner in the project, but said that it already has given the green light to move forward even without a tenant.
“It's much easier to feel comfortable going spec on an office project in Midtown,” Scott said. “The equity that is coming into our deal feels a lot more comfortable with our size.”