Capital One Leads A Pack Of Companies Looking For Big Atlanta Offices In 2019
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A D.C.-based banking giant is looking to open a tech office in Atlanta, which would add new jobs to the local market.
Capital One is scouting the Midtown Atlanta office market for between 75K and 100K SF, numerous sources with knowledge of the requirement told Bisnow. Sources said Capital One planned to use the office space for IT and other technology functions.
Details were scant on what properties Capital One is eyeing, or how many jobs would be involved, but based on an industry standard of one employee per 125 SF, Capital One could be looking to have an office with at least 600 employees.
CBRE has been tapped by the company for its search, sources with knowledge of the search said. CBRE declined to comment.
Capital One also declined to comment through a spokesperson, stating in an email that the company does not “comment on market rumor or speculation.” The company just opened its new headquarters in Tysons, Virginia, a 31-story, 970K SF tower that is the tallest in the D.C. metro region.
The bank, known for its credit card commercials and catchphrase, "What's in your wallet?", is the latest in big deals scouring the Atlanta office landscape seeking space that has some real estate pros proclaiming optimism for the coming year.
“I think the big story for 2019 will be these large users sort of circling around the limited large blocks of space, and if any of them make a move to kick off new construction,” Savills Studley Executive Managing Director David Rubenstein said. “It's sort of a race to see who is the first one to secure one or several of these users to break ground.”
There are a handful of large office deals currently in the market that are likely to carry over into 2019, Colliers International Atlanta principal Jeff Kelley said. Some of those companies include law firm Jones Day, Starbucks, WeWork with multiple locations and a new iHub for BlackRock, which could take up to 200K SF in Midtown.
“At least for the foreseeable future, [the market] remains pretty positive,” Kelley said. “[Companies] are not putting the brakes on for any trade tariffs or accounting issues.”
This could be good news for an office market that has seen healthy, if somewhat anemic, growth so far this year. For the first nine months of 2018, absorption in Atlanta office space — the metric used to measure net gains or losses in office usage — was essentially flat, according to Transwestern.
But the last quarter is poised to offer a different story: a big rebound in companies finally signing the dotted line on leases.
“I do think we are looking at in excess of half a million square feet of net new absorption this quarter, which would be the strongest single-quarter performance in a couple of years,” Transwestern Director of Research Keith Pierce wrote in an email.
The end of 2018 has seen some banner leasing deals, including Norfolk Southern moving its headquarters from Virginia to Atlanta and anchoring a new Midtown office project that will be developed by Cousins Properties.
But even with many companies consolidating office use in Atlanta — most notably AT&T, which is vacating 1M SF in Midtown — many other companies expanded their presence in the metro area throughout 2018, including:
- Thyssenkrupp, which signed a 210K SF lease for its elevator division's U.S. headquarters at The Battery at SunTrust Park.
- Northside Hospital, which consolidated its back office operations to 1001 Perimeter Summit and added 400 new jobs.
- Arby's Restaurant Group, which decided to move its headquarters to Three Glenlake.
- Insight Global, which spurred a new office development at Twelve24 with its 204K SF lease.
- E*Trade, which landed at the 215K SF Edison in Alpharetta creative office development with a 107K SF deal.
“It seems like we have a lot of potential activity, so I will say I'm cautiously optimistic,” Kelley said. "But until a deal's done, it ain't done."
While Atlanta's economy has been on a tear, producing more than 68,000 new jobs this year, some experts believe things will slow in 2019, with only 51,900 new jobs coming online in the metro area. And recent headlines that augur potential risks in the overall economy — Wall Street's recent dives, an inverted yield curve, a trade war with China and turmoil with Brexit in the U.K. — are giving corporate executives some pause in regards to huge capital expenditures in the coming months, Rubenstein said.
“I think there's just a lot of questions people have on where the economy is going to be in the next 24 months,” Rubenstein said. “On balance, we are very optimistic. And we got a really full pipeline right now. But as you know, things change quickly in the world these days.”