Some Atlanta Suburbs Craving Walkability Are Coming Around On Apartments
Density is still a dirty word in many suburban cities and towns throughout Georgia. But some cities in Atlanta’s belt of northern suburbs are starting to embrace larger developments with apartments and a mix of commercial units, at times defying NIMBYism, developers said during Bisnow’s Atlanta State of the Market event last week. “Suburban and municipal governments in every northern arc city and county in Metro Atlanta has been afraid of density, afraid of multifamily residential, afraid of anything that threatens their life behind the gates of their golf course communities,” said Toro Development Co. founder Mark Toro, who developed Avalon in Alpharetta while at North American Properties, one of the region’s first urban-like dense mixed-use developments to sprout up in suburban Atlanta. Avalon has more than 500 apartment units, an aspect of the project that was met with pushback during its municipal approval process. But Toro and other panelists at the event, held at The Ritz-Carlton Atlanta, said apartment dwellers are critical to the health of the retail and commercial aspects of these popular projects, which rely on sales to survive. “Those sales are driven by density,” Toro said. “If you’re going to fuel downtown, town center districts, you better have a lot of people.” Despite the need for customers — and the ongoing housing crisis in the region — anti-apartment attitudes remain strong in many suburban cities and counties in Metro Atlanta, with a handful of districts imposing new moratoriums on multifamily over the past year. Since 2022, Henry County and the cities of Marietta and Roswell have enacted moratoriums on new apartment development. Stockbridge also blocked accepting applications for any new rental units, including build-to-rent homes, in 2021. Sandy Springs Mayor Rusty Paul vowed to block new apartment applications within the city’s borders for three years during a Bisnow event last summer. But other city leaders have sought out developers willing to build apartments to transform their town centers. Despite some initial pushback, the city of Snellville, 25 miles northeast of Downtown Atlanta, entered into a public-private partnership to create the Grove, an $85M mixed-use city center that includes 250 apartments. The success of the Grove has helped to ease some attitudes toward multifamily in other suburban cities of Gwinnett County, Smallwood principal Greg Bennett said. Duluth, Lawrenceville, Sugar Hill and Peachtree Corners also have approved multifamily within mixed-use projects in recent years. “I think the success of that project is a testament to the sort of breaking the logjam” against multifamily, Bennett said. “People realize they want convenience, they want walkability, they want connectivity. And as long as you provide it, that’s kind of, sort of, what the secret is.” North American Properties received approval last year to develop more than 600 apartment units across two properties in Peachtree Corners, including more than 300 units as part of its revamp of the Forum on Peachtree Parkway shopping center. That approval was not unanimous among all city council members and area residents. North American Properties Managing Partner Tim Perry said apartment dwellers are critical to fueling sales in the retail tenants in these projects, which in turn help to generate more tax revenues to support more infrastructure and school spending, particularly in traditional suburban bedroom communities. “All of these single-family subdivisions don’t pay for themselves. They don’t pay for the wear and tear on the roads, schools or anything else,” Perry said. “It comes down to me on leadership … within these municipalities. They either accept the burden of their elected position and understand that they need to make decisions for the citizens years down the...
read moreAtlanta Office Leasing Picks Up Speed, But Sublease Availability Is Growing Faster
Companies offering their space for lease to other businesses are an increasingly large factor in the Atlanta office market. There was 7.7M SF of office space on the sublease market in Atlanta at the end of the first quarter, 34% more than a year ago and a new all-time high for the region, according to Avison Young’s quarterly report. Roughly 2.1M SF of that availability is currently vacant, while the majority of the sublease space is being occupied but marketed nonetheless, said Sara Barnes, the director of insight for Avison Young’s Southern region. But the 5.6M SF of office space on the sublease market is raising alarms for the health of the office market overall and exemplifies the continued uncertainty companies have with just how much office space will be enough at a time when hybrid work has become the norm, Barnes said. Four of the top 20 leases signed in the first quarter were sublease deals, including Procure Advisors’ 44K SF sublease at One Overton Park in the Cumberland/Galleria area, Colliers said in its quarterly report. Chronic uncertainty on office space needs can easily turn to actual vacancies once company leases run out. “Less space is the ultimate need of most companies,” said Kirk Demetrops, the founder of MidCity Real Estate Partners, a firm that has developed a number of corporate offices in Atlanta, including buildings for JAS Corp. in Central Perimeter and DataScan’s headquarters in Alpharetta City Center. “[Sublease space] is going to be a competitor in the marketplace.” As companies continue to gravitate toward newer offices in their efforts to recruit and retain workers, subleases are becoming a more viable option. With some subleases being offered with furnishings, taking over the space of another company is allowing corporate executives to tamp down on real estate expenses, Demetrops said. More offices were emptied than filled in the first quarter, with Metro Atlanta’s absorption turning a negative 42K SF, keeping the overall vacancy rate at 22.7%, according to Avison Young. While the 1.3M SF leasing activity was up by 1.7% over the fourth quarter, according to Cushman & Wakefield, much of that activity was dominated by companies renewing their leases. Some of the largest renewals this past quarter included Q2 Solutions’ 81K SF lease at 1600 Terrell Mill Road in Marietta and Paradies Lagardere’s 47K SF renewal at Overlook I in Cumberland/Galleria, according to Avison Young. “The day Covid hit in March ’20, the fate of our space has been debated in the newspapers,” Demetrops said. “Right now, it appears that it’s not coming back in the old form.” This article first appeared on the site Bisnow.com on April 24, 2023 by Jarred Schenke. To see the original article, click...
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