Underground Atlanta developer WRS Inc. has hired commercial real estate services giant Jones Lang LaSalle to market opportunities for new development at the project.
WRS is working with Jones Lang LaSalle Inc. (NYSE: JLL) on Block One, a 1.9-acre site within the overall project. It stands along Peachtree Street at the northwest corner of Pryor and Upper Alabama next to MARTA’s Five Points Station.
WRS sees Block One is an integral part of the redevelopment.
Underground Atlanta involves a four-block transformation of the long-strugging project into a mix of housing, office, retail and a hotel.
Block One is an anchor of the project.
JLL’s Scott Cullen and Mark Lindenbaum, who lead the firms’ land and development services platform, will oversee the marketing and selection of a developer for Block One. That includes air rights for the property.
The site’s proximity to Five Points Station makes it one of the most compelling transit oriented development projects in the city, said Lindenbaum.
JLL expects to see global interest in the development opportunity.
WRS bought Underground Atlanta in 2017. It has since shifted some of its original plans and has continued to meet with community leaders about how the project should be developed.
Its timing seems good. Few neighborhoods anywhere in the country are poised for a greater metamorphosis than Atlanta’s historic South Downtown, with roots dating back to the commercial beginnings of the city. It has more than $1.5 billion worth of new projects in the works, including Underground Atlanta and the proposed $400 million development of “The Gulch,” a collection of railroad lines and vacant parking lots that once formed an important railway hub for the Southeast.
Newport U.S. RE also has sweeping plans for several dozen buildings and parking lots along Peachtree, Mitchell and Broad streets. It recently bought 222 Mitchell Street, a collection of tank-like buildings that sat vacant for years. The property could be remade into housing, retail space and office space, and a hotel.
A $6 million makeover of Midtown’s 730 Peachtree is about to get underway.
Owner Crestlight Capital unveiled the redesign of the 11-story building to tenants Thursday. It bought the property, which is just a block from Technology Square, last year.
The architect is Gensler, which is known for its work on similar projects. For example, it led the conversion of a five-story 1980’s-era building into Atlanta Tech Village.
The last major renovation for 730 Peachtree, formerly the Veterans Administration building, came almost 20 years ago.
The work gets underway in June and should finish by December.
Lincoln Property Co. is overseeing leasing and management of the building. The makeover should put Crestlight in position to land more technology companies and startups that want to be close to Georgia Tech and Tech Square.
Big apartment sale
A joint venture purchased a 431-unit midrise Buckhead apartment complex on Lenox Road for $72.5 million.
It plans to complete a renovation begun in 2015.
Wilkinson Corp. of Yakima, Wash., and New York City-based Torchlight Investors acquired 32Hundred Lenox. The seller was Elite Street Capital.
Cushman & Wakefield brokered the transaction.
A profound shift in Atlanta development patterns continues to gain speed, suggesting decades of suburban sprawl may remain stuck in neutral.
Consider that roughly 61 percent of all new construction of trophy office buildings falls within within walking distance, or a half mile, of MARTA rail stations, according to a recently released report from Cushman & Wakefield.
The study looked at construction and rent performance at both office and residential properties within a half-mile of the stations.
Among the findings:
Office buildings within walking distance of MARTA stations achieved rents that were up 5 percent year-over-year at the end of the first quarter.Those buildings also saw less vacancy and a 25 percent higher rental rate than the overall Atlanta market.Rent for trophy office properties near Midtown’s MARTA stations averaged $35.21 per square foot, the highest of any neighborhood with access to rail.Since 2008, there have been three times as many residential units developed within a half-mile of MARTA stations. Rents for those units were almost 50 percent higher than apartments outside that half-mile radius.Projects under construction, such as the 350-unit Hanover West Peachtree, are quoting $2.70 per square foot in asking rents. Lilli Midtown, at 693 Peachtree Street, is getting almost $2.50.
Cushman & Wakefield’s Chad Koenig was lead author of the report, which painted a picture of have-and-have-nots — a growing disparity between the performance of properties near transit and those that aren’t.
“This is not to say that projects located outside the MARTA market can’t be successful, but a critical mass and momentum have been reached when it comes to how Atlantans live and work,” the report said. “The city is shifting from ‘all cars all the time’ to a much more urban approach to transportation found in Chicago, Washington D.C., San Francisco and New York.
One closely watched trend is companies putting more employees into tighter office spaces, as a way to reduce real estate costs. For example, some ratios are down to one employeee per 175 or even 150 square feet of office space. On the surface, that creates greater density and the need for more parking.
However, attitudes toward Atlanta’s autocentric development patterns are changing. In fact, intown neighborhoods such as Buckhead, Midtown and downtown have continued to shrink parking maximums. Midtown’s office and residential parking caps are now the tightest in the city.
At the same time, new projects continue to eat up what parking lots remain.
“Surface lots are disappearing as new construction continues and the cost of deck parking is on the rise,” the report concludes. “This provides businesses with more incentive to locate within walking distance of MARTA rail stations.”
MARTA continues to expand its transit oriented development program, which features partnerships with developers that build new residential and office projects around the stations. MARTA launched its program at three of its stations. It then put four more TOD projects into its pipeline.
Recently, new plans emerged for a long-sought project at MARTA’s King Memorial station.
More than a year ago, MARTA announced a joint venture with Place Properties and H. J. Russell & Co. for a $51 million transit-oriented project on a 4.4-acre surface parking lot on the southside of the King Memorial station.
For MARTA, there is a link between more development near the stations and increased ridership. For suburban counties such as Gwinnett, which is not served by rail, the report underscores how investment and economic development are increasingly associated with MARTA.
Cousins Properties have said more companies won’t consider occupying a building unless it’s a short walk from a transit station.
“Clearly Atlanta thinks about MARTA differently than it once did,” said Amanda Rhein, senior director of tansit oriented development and real estate. “We are becoming the antidote to authocentric development.”