The Downtown Atlanta submarket seems to be making a comeback, and the recently announced renovation and repurposing of the Flatiron building, the city’s oldest skyscraper, promises to accelerate the momentum.
Over the last seven or so years, development activity in the Downtown Atlanta submarket has increased substantially, and 2014 promises to bring more of the same. Forty-eight new developments and renovations are underway in Downtown this year, including the new Falcons “nest” stadium, the College Football Hall of Fame, the Center for Civil and Human Rights, Georgia State University’s new law school, and renovations of the old Coca-Cola headquarters and the Georgia Aquarium. Meanwhile, Downtown’s Georgia State University continues to grow, with 32,000 students now on its rolls. Downtown crime rates have reached a 50-year low, thanks in part to an increased police presence and to the Downtown Ambassador Force, whose 67 members provide information and assistance to residents, tourists, conventioneers, employees and business owners visiting Downtown.
Given these trends, the time is ripe for the Flatiron’s redevelopment into the collaborative, loft office space that real estate investor Arun Nijhawan envisions. Built in 1897, the 40,000-square-foot, 11-story, wedge-shaped Flatiron building on Peachtree and Broad Streets has the historic panache that many Millennials – precisely the segment Nijhawan hopes to attract – crave. Its 4,000-square-foot, triangular floor plates, a hindrance to previous development attempts, are perfect for start-ups seeking a smaller space with room to grow. The space will be developed into highly desirable loft office space, for which the market is currently tight. And at an average $18.50 per square foot (versus an average $24 per square foot in Buckhead) Downtown’s cheaper leasing rates add to the allure for young workers and start-up businesses.
When completed, the Flatiron development will include more than 36,000 square feet of collaborative workspace and 5,600 square feet of boutique retail and entertainment space. Single desks and private suites will be rented on a monthly basis so that tenants have the flexibility to grow (or shrink) as their business dictates. In another appealing aspect for Millennials – who typically eschew long commutes – the building is within walking distance from two MARTA stations, and the Atlanta Streetcar will connect it to the Beltline and its bike trails.
The Flatiron deal is under contract and expected to close this month, with renovations slated for completion by the end of 2014. Acquisition and renovation costs will likely top $10 million, $1.5 million of which will come from Invest Atlanta. The Invest Atlanta loan will be forgiven in seven years if the space is used for start-ups and a women’s entrepreneur center, according to the Atlanta Business Chronicle.
If successful, the Flatiron building will extend south the entrepreneurial hubs that have sprung up in Midtown and Buckhead. It will emulate developments like the 103,000-square-foot Atlanta Tech Village on Piedmont Road, which currently hosts about a hundred businesses, and the historic King Plow Arts Center on West Marietta Street, a magnet for creative businesses where most tenants occupy only about 2,000 square feet. And perhaps most exciting, as its tenants’ businesses grow, the Flatiron will spur demand for space in surrounding office towers, giving Downtown’s ongoing recovery another shot in the arm.
Blog contributed by Hugh Rader, Advisor, Cresa Atlanta. Hugh is a tenant representative with expert knowledge about the Downtown submarket. For more information, call Hugh at 404-257-8866.