After Starting On Spec, TPA Lands Tenant For Second Edison Office Building
TPA Group quietly started speculative construction on a loft-office project in Alpharetta in March, and just a few months later, it's close to filling the entire building.
3M Health Systems has signed a 35K SF lease for 1 Edison Drive, a 100K SF project near the intersection of Windward and North Point parkways in Alpharetta, sources familiar with the transaction told Bisnow.
TPA Group also is in talks with another tenant that could possibly lease the rest of the building by the time it delivers at the end of this year, a source said. Officials with CBRE, which is leasing the project, and TPA declined to comment.
One Edison Drive is part of a $40M, two-building loft office campus just 2 miles north of Avalon in North Fulton County, an affluent suburb 25 miles north of Downtown Atlanta. The first building, 3 Edison Drive, started as a spec office development in 2016. By the time that office delivered in 2018, E-Trade had agreed to lease the entire building.
TPA's project continues a string of success for the area. Nearly a half-million square feet of Class-A office space is under construction in the North Fulton County submarket — an area 25 miles north of Atlanta that is one of the city's most affluent suburbs — but most of that space has already been claimed.
Hines and Cousins Properties are underway with the second office building at Avalon, known as 10000 Avalon. Last summer, AXIS Capital Holdings announced that it would occupy 76K SF of the 251K SF there.
“Pre-leasing at 10000 Avalon in Atlanta increased to 52% at the end of second quarter, and we have a deep pool of additional prospects looking at the remaining space,” Cousins CEO Colin Connolly said during his company's July 25 earnings call.
So far this year, landlords in North Fulton have seen tenants absorb more than 305K SF of prime space, according to Transwestern. That outpaced Midtown, Buckhead and Downtown Atlanta, which absorbed 289K SF of Class-A office combined. In Midtown, arguably the hottest office submarket in Atlanta this cycle, more than 2M SF is under construction.
Developers in North Fulton have cashed in on the demand for office properties in an urban-style setting with lots of amenities and creative, loft-office layouts, without having to travel to the city.
"Avalon was really the game-changer for what we call the urbanization of the suburbs, where welcoming ecosystems are developed in order to generate energy and make people — renters, shoppers and workers — want to gravitate there,” Transwestern Director of Research Keith Pierce wrote in an email. “These projects are new and offer something unique, which allows them to achieve higher rents and often gives them an advantage when companies are looking for space, as long as pricing is less important to them than the environment.”
While TPA's Edison project is not directly part of a mixed-use campus, it is close to Avalon and offers a look that is unique in North Fulton, Pierce said.
“Those buildings look and feel like something you’d find on the West Side in the city, and not like other properties in North Fulton,” he wrote.
SK Commercial Realty Office Properties Group President Tom Parker said if a new office project is in or close to a mixed-use setting, it is a differentiating factor in a world where companies have been laser-focused on luring and retaining talented employees.
“I think that the Avalon effect is a real trend in the marketplace, something that the Halcyon project is trying to take advantage of on McFarland Road,” Parker said, referring to the 135-acre mixed-use project by RocaPoint Partners north of Avalon.
“The market smiles on large, mixed-use projects like Avalon, especially when you have a great mix of restaurants, entertainment and higher-end shopping,” he said. “But Avalon is new, it's slick and it meets the HR perspective of what a 'livable work environment' is supposed to look like today.”