Category Archives: Uncategorized

Introducing: Sweetwater Design District

By Wes Vaughan

Cool, loft-style office space in Atlanta is in high demand these days, particularly for the “creative-type” firms like technology companies. As the demand has risen over the past five years, this type of space has become hard to find for some tenants.

The West Midtown area of Atlanta has flourished in this niche market for a number of years now, with properties such as White Provisions, King Plow Arts Center, Brickworks and Lumberyards attracting many a hip tenant. The West Midtown vacancies are few and far between these days and tenants have been forced to look elsewhere in Atlanta, particularly on the East side of the city – Southern Dairies, Float Away, Stove Works, Studioplex, none of which are particularly hurting for occupancy either. Jamestown has been so successful with their White Provisions development that they bought the old City Hall East property, all 2 million square feet of it, which they are currently renovating and plan to deliver as Ponce City Market in early 2014.

Parkside Partners, a local Atlanta commercial real estate development firm led by Kyle Jenks and Gary Matthews, has focused on creating this type of environment in their properties around the city as well – Inman Alley (home of Rathbun Steak…yum), 5256 Peachtree in Chamblee, Glassworks, to name a few. Parkside’s latest venture is 225 Ottley Drive, about a nine iron from the newly renovated Sweetwater Brewery in what used to be known as the Armour Industrial area. On a side note, if you have never been to a happy hour or tour of Sweetwater, you need to check it off the bucket list; it’s quite the scenic experience…sometimes just to get in the door. Back to business, Parkside just purchased a 53K square foot warehouse facility, which they plan to redevelop into 42K square feet of loft office. They also have an adjacent pad site that can accommodate a 16K SF user right next to it. Parkside is banking on this area, newly dubbed the Sweetwater Design District, to be a success and why shouldn’t they? The property is right on the Beltline Overlay District, neighboring businesses include Mason Murer Fine Art, Pineapple House, Planters, Bottega Stone and, of course, the makers of those delicious craft beers at Sweetwater. When 500 thirsty people line up on Ottley Drive every Wednesday through Friday for tours and happy hour, you know something sweet is in the air…pardon the pun.

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Filed under Atlanta, Business, Commercial Real Estate, Technology, Uncategorized

Atlanta Capital Markets – A New Season

By Wes Vaughan

In 2006, NFL running back LaDainian Tomlinson, then with the San Diego Chargers, was undoubtedly the best player in the game. LT had an unbelievable MVP season in 2006, rushing for 1,818 yards, scoring 31 touchdowns and setting numerous other records along the way, while helping his team to a franchise-best 14-2 record. It was the peak of Tomlinson’s career. Similarly, the Capital Markets sector of the Atlanta commercial real estate world had an MVP-like season in 2006 as well, with equally unheard-of numbers.  Deals were being made left and right and the deals were doozies. The starry skies of 2006 are a distant sweet memory for the Atlanta Capital Markets sector (for Tomlinson as well), and although we may not see the likes of that activity level for quite some time, if ever again, the next two years should prove to produce the most activity Atlanta has seen since those glory days.

In the Spring of 2011, Atlanta finally started to see some capital market transactions again, and if you’ve been reading the papers recently, many of the office buildings in the core submarkets of Atlanta are trading hands again (Promenade II in Midtown, 201 17th Street in Atlantic Station, Ten Peachtree Place just this week) and many more have a For Sale sign on them today (in Buckhead alone: Tower Place 200, Prominence and Two Alliance Center). Granted this activity is not necessarily an entirely positive change for our industry, as many of these trades are due to poor investments, loan maturities, or the seller’s desperate need for liquidity, which shows in the drastically reduced sales price. And there is concern over more distressed assets coming back on the market at distressed prices, which will reset the bar even lower (see Resurgens Plaza foreclosure in Buckhead at the end of 2011). However, the increase in activity is generally a good thing and we should see plenty more of it for a couple years, including some positive momentum. For example, the 96% leased Prominence is reportedly close to selling to Crocker Partners out of Florida, which is expected to give onlooking investors a new market standard on the high end. The market during the next few years holds many loan maturities due to the huge amount of sales activity in 2006-2007, combined with the multiple loan restructures in 2009-2010 and the fact that roughly 70% of the CMBS market will expire in 2015-2017 from deals done in the heyday of 2006-2007. Again, Atlanta will have various deals to be done.

Atlanta is not a “Gateway Market” (see Tier 1 cities like NYC, LA, Bay Area), nor will it ever be. However, the fundamentals of the Atlanta market are improving, and there is no new construction on the horizon…yet. There is a lot of foreign capital looking at Atlanta, particularly Isreali companies, and there are capital sources from the Northeast U.S. that are getting priced out of the Gateway cities so they continue to take a good, long look at Atlanta opportunities as well. There are value-plays in our city and hopefully the gradual recovery of the global economy and the creation of new jobs will continue to push the Capital Markets sector of Atlanta back up the hill along with it.

I think I can, I think I can, I think I can…

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