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Project Yogurt Just The Tip Of The Economic Development Iceberg

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Mercedes-Benz. PulteGroup. Starbucks. Pandora.

Now, Atlanta can add another company coming from elsewhere with a major office requirement. But all we know about this economic development coup is the code name: Project Yogurt.

Midtown Atlanta skyline
Midtown Atlanta skyline

Invest Atlanta, the economic development agency for the city, is expected to vote Wednesday on an incentive package for an unidentified company moving an office operation into the state that will create 500 jobs and invest $16M, according to Invest Atlanta documents. Invest Atlanta is voting whether to approve $250K from its Economic Opportunity Fund, which is an incentive program awarded based on either job creation or retention within the city. It can be used to fund real estate acquisitions, equipment purchases, parking subsidies, relocation costs and workforce training, according to Invest Atlanta.

Little else is known about the deal other than the company is expected to occupy Class-A office space. Given industry standards for square footage per employee, at 500 jobs, the company could be seeking as much as 150K SF.

Project Yogurt is the latest win for the metro area in terms of an in-migration of companies. In recent years, Atlanta secured big economic development coups, including headquarters for Mercedes-Benz and homebuilding giant PulteGroup from out of state.

These come during a time when Atlanta is among 20 regions in North America chasing the Stanley Cup of economic development trophies — Amazon's second headquarters project, a deal that promises to create 50,000 new high-paying jobs and invest $5B in a major corporate campus over a decade.

Whether or not Atlanta ultimately wins the assignment, Amazon has created a halo effect around the region that appears to be drawing in other companies, Transwestern Managing Director Bradley Fulkerson said.

“Atlanta's always been on the list when people consider multiple locations. But I think now Atlanta is getting the business. I think we bumped up from a choice to a top competitor,” Fulkerson said.

Some of this activity could be attributed to job growth momentum in recent years. Since 2010, the Atlanta metro area has experienced year-over-year job growth, Bureau of Labor Statistics Regional Commissioner Janet Rankin stated in a recent report. As of June, 49,000 new jobs were added to the local economy, according to the BLS.

The Amazon halo effect also has certainly helped Atlanta's office market, which is experiencing record rents in some submarkets, especially in Buckhead and Midtown, where asking rents are topping $33/SF, according to a recent Cushman & Wakefield office report.

“As the office market fundamentals, economic growth and in-migration, remain strong, the Atlanta office market’s remarkable run should continue through 2018 and beyond,” Cushman & Wakefield officials stated in the report. “Insatiable demand resulting from a strong economy and the accompanying war for talent coupled with limited vacancy has caused record rent growth, which will price many prospective tenants out of the CBD submarkets. This should lead to a recovery for suburban submarkets struggling to rebound from several large corporate relocations.”

This bullish attitude on Atlanta's economic prospects bled over recently with Georgia Gov. Nathan Deal telling an audience at the Rotary Club of Atlanta that the state is negotiating with “20 good prospects, each of them going to bring an average of 850 new jobs to our state,” the Atlanta Business Chronicle reported. Since 2011, the state saw 700,000 new private sector jobs and more than 600,000 new residents, the ABC reported.

“People are coming. They are coming for a reason. That reason is job opportunities,” Deal told the audience.

Just this past Monday, online radio giant Pandora Media announced that it inked a 50K SF lease at Campanile in Midtown. And aside from Amazon, Starbucks also is scouting Atlanta for a regional operations center that could bring hundreds of jobs, The Atlanta Journal-Constitution recently reported.

According to Colliers International, some 2.5M SF of potential office deals are companies looking to come from outside the state, not including Amazon.

Atlanta's low cost of office coupled with affordable housing options is fueling the interest to move to the city, Fulkerson said.

“We used to be a alternate choice for corporate location. And we also used to be a backup or alternate choice for a young graduate if they didn't go to New York," he said. "Now we're right up there as a top choice for a young worker. Those both energize each other.”