By: Felipe Rivas
4 min read December 2020 — The on-going health crisis initially placed unprecedented pressure across industries and sectors and will continue to do so into 2021. The advent of remote work, instruction and entertainment, for example, is causing corporations and individuals to reconsider important real estate decisions that will likely shape the landscape of the local economy and communities for years to come. However, the Peach State’s business friendly reputation, strategic geographical location along the sunbelt, excellent education system and world-class tourism and outdoor destinations are poised to attract business and individuals alike with many of them likely settling throughout the Atlanta metro area. Though COVID-19-related challenges abound, local real estate leaders told Focus: Atlanta that they remain optimistic about the commercial and real estate market but expect trends such as the minimal rent growth, people flocking to in-town neighborhoods and increased demand for industrial space to continue for 2021.
John Roberson, Managing Director of Development, Greystar – Atlanta
My team is directly responsible for 12 projects at different stages in their life cycles, ranging from pre-development design to lease-up. We also have a very wide asset range, from suburban, garden to high-rise construction in Midtown and Downtown. Of note, it’s worth highlighting our development in Downton – named Ascent Peachtree Center, which is a partnership with Banyan Street Capital and Invest Atlanta. We’re building a structure on top of the existing parking deck that Banyan owns. The first units will be delivered in early June 2021.
We have two projects under construction in Cobb County around the Braves’ stadium. One is geared toward traditional multifamily renters and the other is an over-55 active adult community. Our fourth deal that is still under construction is another active adult community in Downtown Duluth, which will diversify the Downtown square.
It is now taking a significant amount of time and data processing to underwrite new development projects. We are regularly updating rents and velocity and absorption, so we are very capable of identifying trends before they hit the wider market. We are now ensuring our new underwritings assume minimal rent growth for the rest of 2020 and into 2021.
David Marvin, Founder & President, Legacy Venturesopens IMAGE file
There are two areas that are really taking off. The central perimeter area is very strong, and went into the next orbit when Mercedes-Benz decided to put its headquarters there, and then State Farm consolidated its operations there. That’s very exciting. I think the West Midtown area is also a very exciting area and I think the attraction there is the confluence of Georgia Tech and technology-oriented companies that help in the recruiting of tech-oriented talent.
In those areas, we have a couple of properties in development. We have a hotel in the central perimeter area and in Tech Square we’re planning a restaurant, which is a very exciting opportunity that has been put on ice pending the outcome of the pandemic.
Scott Askew, Owner, Engel & Volkers Intown Atlanta
Theropens IMAGE file e is a good mix of buyers clamoring to be in in-town Atlanta neighborhoods. A majority are young and affluent, but we also have baby boomers who want to downsize and reside in the same communities. When I got started in this business in the late ’70s, the suburban areas were the growth areas. That’s where everybody wanted to go. But now, people are flocking to in-town neighborhoods where they can ride their bikes and walk to restaurants and bars.
Additionally, the West End is just starting to expand its “rebirth.” Investors have been, and are still, aggressively buying everything they can, and smart millennials are taking advantage of the opportunities being presented to them.
Michael Bull, CEO, Bull Realtyopens IMAGE file
Industrial real estate is performing well. At this point, multifamily is still performing well, followed by office. Retail and hospitality are ranked at the bottom of the rung. This crisis really just sped up existing trends, reflecting an increased focus on e-commerce and a lower propensity to go out to physical shopping centers. In the office market, landlords have been as flexible as they should be working with tenants on rental payments during COVID, and even more so on the retail side. Ongoing concessions will really depend on each individual market.
Ray Uttenhove, Executive Vice President & Managing Principal, SRS Real Estate Partners
opens IMAGE file Successful retailers have been using multichannel offerings for years. With COVID, the pressure to expand and enhance online integrated with traditional brick and mortar shopping is an important measure of a successful retailer. When a crisis happens that affects consumer demand, struggling retailers can no longer pretend. As a result, we are seeing a large number of closings and repositioning, particularly for retailers that were having problems before the pandemic. A return to the pre-COVID paradigm is unlikely.
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