Food Halls, Food Trucks And WiFi: How Suburban Offices Are Striving For An Urban Feel
A Central Perimeter office campus could become home to a Krog Street Market-like courtyard in the owner's efforts to attract tenants who want a more urban-like setting.
KBS Realty Advisors is considering transforming a grassy expanse in front of its Crown Pointe office park into a possible boutique retail and food hall destination, PM Realty Group Eastern division President Bill Weghorst said. KBS purchased the two-building, 516K SF property off Crown Pointe Parkway for more than $80M earlier this year from MassMutual.
The potential development is being considered as part of the larger, ongoing renovation taking place at Crown Pointe, Weghorst said.
“If you have to scratch your head and say, 'What was it that makes Ponce [City Market] work? And then what makes Avalon work?'” Weghorst said.
The formula appears to be giving tenants' employees the ability to get out of their cubicles, roam around on foot with things to do, while also being connected to WiFi, Weghorst said. That could also include open collaboration space in lobbies or in other public areas within buildings.
"It's a less formal work environment to accommodate today's workforce," he said. "We're trying to create more places to get people out of their offices."
These features, a hallmark of many of the top urban office developments in the city center, are now what suburban office landlords are trying to replicate in office parks well outside the urban core, according to a recent report by Savills Studley.
“The suburban campus is far from dead in Atlanta. Some campuses are experiencing a revival, thanks to savvy owners adding urban attractions — restaurants and cafés — as well as services such as cleaning and catering," Savills Studley officials said in the report. "As major employers expand their local workforce, they are spending substantial amounts of capital in their facilities, acknowledging that amenities that serve their employees are critical in such a competitive labor market."
Savills Studley Executive Vice President and market leader Chris White said the key feature for suburban office buildings luring tenants wanting an urban feel is a campus where there are nearby amenities, preferably within walking distance. For companies, those features are critical in a fight to lure and retain top talent in Metro Atlanta, especially at a time when unemployment is low — less than 5% as of June — and urbanization is in full effect, White said.
“We're seeing companies willing to pay up a little bit [in rent] when there are those kind of amenities available,” White said.
Jackson Healthcare is an example of this, according to the report. The healthcare provider is undergoing a $100M expansion at its Alpharetta headquarters. Aside from a new eight-story, 267K SF office building, Jackson Healthcare also is developing a 39K SF amenity facility that will include an indoor pool, a fitness center, a restaurant and other services like a dry cleaners and a hair salon.
CBRE Senior Vice President Bryan Heller said owners of every suburban office asset he is working with are renovating to create urban-like environments in some way.
“It's just about creating more amenities," Heller said.
Those features include converting open spaces and courtyards into public gathering places, high-speed WiFi, bringing in food trucks and hosting events, Heller said. The goal is to get people to linger, he said.
He credits renovations on The Hub, a 120K SF suburban office building in Peachtree Corners, for helping CBRE push occupancy up to 75% with three deals. Minnesota-based Onward Investors and its partner WHI Real Estate Partners purchased 3567 Parkway Lane in Peachtree Corners two years ago. The owners renovated The Hub with a new outdoor lobby, open ceilings and high-speed WiFi, he said.
“There's a lot of things we're trying to do to get away from the historical office,” Weghorst said. “We're all playing with different ideas to invent new ways to create different experiences for the tenants.”
The Savills Studley report warned that not all suburban office properties, nor all suburban markets, are created equal, especially given that companies are chasing millennials who have particular tastes in office environments.
“There is a limit however to how far suburban office parks can replicate the setting of a Buckhead or Midtown. When looking for the perfect place to work, millennials are searching for a live, work and play environment,” according to the report. “Although such areas are being developed in the suburban markets, the character of an authentic, repurposed industrial district cannot be replaced.”
CORRECTION, AUG. 9, 3:30 P.M. ET: A previous version of this story misstated Bill Weghorst's title. He is President of the Eastern Division of PMRG. The story has been updated.