Asana Going Spec On Office Adaptive Reuse Of Historic Former Coke Plant
A developer is planning on taking the risk of speculative office construction in the height of the coronavirus pandemic, betting that the appeal of working in a single-user building converted from a former Coca-Cola bottling plant in Atlanta's historic Old Fourth Ward neighborhood will make its bet pay off.
Charlotte-based Asana Partners is readying to kick-start the conversion of the 100K SF former bottling plant at 560 Edgewood Ave. into an office building that will deliver in 2022, Capital Real Estate Group founder Bennett Gottlieb said.
Gottlieb's firm has been tapped by Asana to lease the property, which sits along the BeltLine Eastside Trail. Gottlieb said the project is unusual for adaptive reuse in Atlanta, where former warehouses and strip centers become mixed-use projects, but typically don't offer office footprints bigger than 50K SF.
“If you're a tenant in that size range, there aren't single-tenant opportunities in the Old Fourth Ward,” he said.
Despite the economic fallout from the pandemic, Midtown, both Eastside, where the Old Fourth Ward is located, and Westside has remained active with office users looking for space. Last month, email marketing firm MailChimp announced that it would anchor New City's $300M 760 Ralph McGill Blvd. development with a 300K SF lease. MailChimp was one of two major leases inked in Metro Atlanta during the third quarter.
“These notable deals represent the ongoing attraction of metro Atlanta for companies to locate and expand, despite the pandemic,” Colliers International officials wrote in a recent report. “This is further validated by the Metro Atlanta Chamber of Commerce’s pipeline of projects. When recently asked about their outlook for business activity in the region, leaders have noted they have never been busier with prospects.”
Gene Kansas Commercial Real Estate founder Gene Kansas, who specializes in leasing historic and adaptive reuse properties in Atlanta, said these projects have been relatively unaffected by the coronavirus-caused office leasing slowdown. The activity has encouraged developers to move forward with adaptive reuse projects during the pandemic.
“It's not just, 'Well, we think someone will like this,'" Kansas said. "We're getting the phone calls."
This is Asana's latest move into Atlanta's trendy neighborhoods with adaptive reuse projects. The firm purchased both the iconic Krog Street Market and Stove Works back in 2018. And this past March, Asana bought Brickworks, a 194K SF adaptive reuse project at the corner of Marietta Street and Howell Mill Road.
Gottlieb said one of the potential draws to 560 Edgewood, is its location in a qualified opportunity zone. While Asana didn't take advantage of raising funding from an opportunity zone fund for the project, Gottlieb said, the developer sees the designation as an added incentive for potential tenants, who can claim a tax break for locating in the area.
Gottlieb said single-tenant office projects in hot Midtown neighborhoods also will gain more popularity in a post-pandemic world, especially when companies will have the ability to control access to the space.
“[Tenants] are formulating plans related to their re-entry to the workplace, and control seems to be the most important thing,” he said. “When you're in a big mixed-use building, control is harder to accomplish.”