How old buildings are attracting young talent

Atlanta loft office developer Parkside Partners is planning an $8 million modernization of an aging low-rise building along West Peachtree Street — the latest in a series of “adaptive reuse” projects sweeping across Midtown. The building is overshadowed by Midtown’s gleaming office towers and newly repositioned mixed-use projects such as Atlantic Station.

1438 W Peachtree

But, the property’s obscurity compared with higher-profile undeveloped sites such as the Symphony Center tract near the Four Seasons Hotel Atlanta is also part of what makes 1438 West Peachtree attractive, developers say.

A few blocks south, Parkside Partners is already planning a similar adaptive reuse project of a building at 16th Street next to the former Trump Towers site. That $12 million overhaul will be called 16th Station.

The goal of both projects: provide creative office space in high demand from firms that want to be in Midtown, near MARTA, Georgia Tech and amenities such as Piedmont Park and the Atlanta Beltline, said Parkside’s Eli Green.

Parkside isn’t alone in scouring Midtown for diamonds in the rough. Atlanta real estate company Carter is remaking Midtown’s former J.C. Penney Co. regional headquarters building into a hub for co-working space and fledgling technology companies. Carter, in a joint venture with private equity firm Pacific Coast Capital Partners, already has at least one undisclosed tenant signed to a lease in the 10-story building just north of the Fox Theatre, the Georgian Terrace hotel and Hotel Indigo at 715 Peachtree St.

Matt Delicata, a vice president with Carter, said loft-office projects such as 715 Peachtree increase competition for landlords of traditional Midtown high-rise towers. “There is more out there for tenants to choose from,” he said.

More adaptive reuse projects are being launched as the construction of new office towers without an anchor tenant remains difficult for some developers, said Josh Hirsh, a senior managing director with real estate services giant Jones Lang LaSalle Inc. Premium Midtown land prices caused by multifamily projects is one hurdle, he said. Prices have climbed to at least $8 million an acre across parts of Midtown. Soaring construction costs is another challenge for developers, he added. For example, the cost to build a new trophy intown office building has risen to slightly more than $400 a foot. By contrast, Carter is redeveloping 715 Peachtree for about half as much.

More tenants are also demanding a different type of working environment from the garden-variety office. Consider Ponce City Market, the redevelopment of the former 2-million-square foot Sears building on Ponce de Leon Avenue in the Old Fourth Ward neighborhood next to the Atlanta Beltline. The former brick warehouse now features loft offices, apartments and a food hall. It’s already landed several creative-class companies.

“It’s all about attracting young talent,” said Ben Hautt, co-managing partner with Stream Realty’s Atlanta office. Stream has adaptive reuse projects in West Midtown on Ellsworth Industrial Drive and in Brookhaven. “The young talent companies want is drawn to adaptive reuse projects because they provide a unique experience,” he said. “They don’t want to ride up an elevator to an office where they work in a cubicle. They have a huge desire for uniqueness.”

Parkside is striving for that at 1438 West Peachtree. Architect MSTSD Inc. is designing the project, which will include up to 14-foot ceilings and skylights on the second floor. The building, which will be 80 percent leased when Payscape takes occupancy this fall, will feature the remaining loft office space as an alternative to the glass towers on Peachtree Street, Parkside Partners said.

Demand for creative loft office space doesn’t appear to be waning, either. “Given the growth in Midtown multifamily development that caters toward young professionals, you are going to see this trend continue for a while,” Hirsh said.

Written by Douglass Sams for Atlanta Business Chronicle

GE puts North American IT HQ in Midtown ATL, will add more than 400 jobs

General Electric Co. (NYSE: GE) has picked Atlanta as the North American headquarters of its Information Technology unit. The conglomerate will, over time, add more than 400 jobs in midtown Atlanta as it shutters the Fairfield, Conn.-based IT HQ and consolidates work from around the country.

GE Article

GE Digital Chief Technology Officer Chris Drumgoole will manage the Atlanta operation. GE Chief Information Officer Jim Fowler lives in Atlanta.

On June 9, Atlanta Business Chronicle first reported on San Ramon, Calf.-based GE Digital’s plans to put a $3 million, 250-job IT center in Midtown. That facility will be GE’s IT headquarters in North America. GE will, over time, relocate to Atlanta most of the 250 jobs at Fairfield. “There’ll be jobs from all over GE moving (to Atlanta) over time,” Fowler said. “As GE grows, you would expect the (Atlanta) operations to grow with it.”

The majority of the initial 250 jobs being added in Atlanta are related to off-shored work outsourced to third-parties that will be brought in-house. The IT business is part of GE Digital, which applies Big Data technologies to help industrial companies manage assets and operations more efficiently. Big data refers to the crunching of massive and complex data sets that can’t be processed by database management tools.

“At GE Digital, we connect streams of data and information coming from machines to analytics, artificial intelligence and machine learning and we are create new outcomes for industrial companies,” Fowler said.

GE is in midst of its largest transformation in 100 years, Fowler said. “By putting software and analytics together with hardware and machines, we are able to create new levels of industrial productivity never possible before,” he said.

Atlanta was picked for the North American HQ because of the quality and cost of talent in the area. “More than 130 Tier 1 CIOs are located in Atlanta (and) they come here for a reason,” Fowler said. “Atlanta is a place where talent wants to live. The quality and the cost of talent can’t be beaten anywhere else.”

GE is considering 10 buildings around Georgia Tech for the IT hub, Fowler said. The company is likely to take temporary space in the city in the interim. One site could be Coda, a 750,000-square-foot office tower planned for Tech Square. That building, which will be anchored by Georgia Tech, is targeting companies who work on Big Data technologies, and would benefit from the in-house 40,000-square-foot data center. Coda, however, would not be ready until early 2019.

For GE, anchoring a big data hub in Atlanta makes sense. The Internet of Things hinges on a host of technologies including wireless connectivity, sensors, cybersecurity and data processing. As a telecom hub dating back to the days of BellSouth, Scientific Atlanta and Internet Security Systems, Metro Atlanta has capabilities and talent in those technologies. Startups such as Bastille and NexDefense — which protect Internet-connected devices and industrial equipment from cyberattack — have emerged in the city.

GE considered Atlanta for its global headquarters before settling on Boston.

Written by Urvaksh Karkaria for Atlanta Business Chronicle

Colony Square’s New Look Revealed (Fly Through)

Here’s what could be the new look for one of Atlanta’s oldest mixed-use urban properties.

Colony Square New Look

North American Properties revealed the Colony Square redesign imagery yesterday, designs the firm says are based on 200 interviews with nearby community leaders.

The design was conceived by NY-based Beyer Blinder Belle and Lord Aeck Sargent. The team is aiming to alter the perception of Colony Square from “dated,” “concrete” and “boring” to “urbane,” and a Main and Main public space fixture in Midtown, according to a company release.

 

Written by Jarred Schenke for Bisnow Atlanta

14th Street tower could soar to 70 stories

Two years after first pitching the project, developers are tweaking a plan for Midtown’s former Symphony Center site to include a 70-story skyscraper, potentially making it one of the tallest buildings in the city.

Symphony Center Design

Symphony

In 2014, New York developers including Ashkenazy Acquisition Corp. and Olympia Heights Management pitched one of the city’s largest mixed-use projects for the four-acre site at 98 14th Street — a $650 million plan to build a trio of twisting towers. The project would include up to 1,300 residential units, 90,000 square feet of retail and a 340-room hotel.

“Tower C” was to rise 60 stories, with 340 hotel rooms and 200 residential units. That tower is now being considered for an additional 10 stories, allowing it to reach at least 800 feet, or about as tall as Midtown’s One Atlantic Center, the city’s fifth-tallest office building, Atlanta Business Chronicle has learned. The original plans also called for a 57-story residential tower with ground-floor retail and a 38-story residential building with retail. Now, one of those buildings would be scaled back, sources said. An attorney for the development group — identified as an affiliate of New York-based Ashkenazy Acquisition Corp., Olympia Heights Management and architect Arquitectonica — was not immediately available for comment. The Atlanta office of Perkins + Will is also designing the initial phase of the project. An announcement could come toward the end of May.

The new proposal is being discussed with planners in Midtown and the city of Atlanta, sources familiar with the plans say. An initial site plan is already approved. “The original concepts for this site were bold but achievable, and we appreciate that the development team is taking their time,” said Midtown Alliance President and CEO Kevin Green. “Given the amount of investment and momentum in Midtown and our city, the value proposition is becoming more compelling.” Green added, “This is a premier site in the heart of Midtown that offers a lot of opportunity. If you are going to build something remarkable, this is a great place to do it.”

The plan would face growing headwinds. Financing high-rise apartment towers is becoming more difficult, as banks are growing wary of overdevelopment, with several thousand units already under construction in Midtown alone and rents starting to peak. While Atlanta’s economy bounced back after the national recovery began, and the Atlanta Regional Commission projects the region will add about 320,000 jobs between 2015 and 2020, it’s uncertain how much longer the expansion will last. The average U.S. economic cycle in the postwar period is seven years. The average of the last three cycles is nine years.

When the project was presented in 2014, the goal was to build in phases over several years with the thinking that Midtown would continue becoming an even greater magnet for investment and jobs. Since then, the expansion of NCR Corp. to Midtown and the launching of the next phase of Technology Square have done little to diminish that hope. Pursuing an option to build an even taller skyscraper could make sense, especially if the project intends to attract an upscale hotel brand, such as Mandarin Oriental or Park Hyatt, said Atlanta developer Jarel Portman.

“No question that developers love height because they can see their building from any point in the city,” said Portman, whose current projects include a luxury condo project in Buckhead called Emerson. He added that Ashkenazy is known for interesting architecture. “That is just their DNA.”

Deal Lets Popular Atlanta Music Venue Play On

Smith’s Olde Bar, an Atlanta venue that’s helped foster the city’s music scene since 1993, has a new lease on life with the help of an Atlanta real estate developer. Charlie Hendon, president and CEO of Hendon Properties, has entered into a 50/50 partnership with Smith’s owner, Dan Nolen. Hendon bought out previous co-owner Mike Reeves and plans to inject some needed capital into the neighborhood bar.

Smith's Olde Bar

The deal marks an exciting outcome for Smith’s, which just a few months ago was almost forced out of its 9,000-square-foot spot at the Morningside Strip Center, which sits at Monroe Drive and Piedmont Avenue. When the property’s original owner, Beverly Taylor, died in March, the building was put up for sale. Smith’s soon received a 60-day notice to vacate, and in response, filed a lawsuit to fight the eviction. In December, Atlanta’s Selig Enterprises Inc. stepped up and purchased the strip center for $3 million, and Hendon and Nolen were able to sign a new 5-year lease.

Now, the new partnership could help Smith’s grow toward the future, with some planned improvements in the works.

“Charlie came in and it was just like an earth angel showing up,” Nolen said. “There are certain things in Atlanta that need to stay. It’s got so much soul and so much history.” For Hendon, it’s an opportunity to further pursue his passion for music. While his day job focuses on developing and managing retail centers — including a new 100-acre project in Dawsonville next to North Georgia Premium Outlets — musical themes have dotted his career. Two of Hendon’s three sons have played at Smith’s Olde Bar. Hendon has his own recording label, Madison Records, and counts big-name artist Elton Johnamong his friends.

Artists who have played at Smith’s include David Bowie, Lenny Kravitz, Leon Russell, Warren Zevon, Johnny Winter, Kings of Leon, Train, and My Morning Jacket. Maroon 5 has played there, as have Grace Potter, Billy Joe Shaver, Pat Green, Ray Wylie Hubbard, John Mayer and Zac Brown. “Smith’s has a niche,” said Live Nation Atlanta President Peter Conlon. “It serves a purpose for bands in the emerging stage — both local and regionally. It usually gives them that first important play in a major music market.” Conlon added, “Agents understand what it is, and people who are familiar with the market know where it fits in the industry. I’m glad to see it’s going to keep operating.”

Moving forward, Smith’s could see some upgrades, such as lighting and sound system improvements. Selig Enterprises will help fund some of the work. “We are keeping what’s great about the venue and subtly improving upon it,” Nolen said. “From a new roof and HVAC system to an enhanced bar and food menu, Smith’s Olde Bar will remain a neighborhood bar and live music scene with an improved customer experience. We want to keep the tradition going with our loyal customers, as well as bring in new friends and neighbors.”

Written by Amy Wenk and Phil W. Hudson for the Atlanta Business Chronicle

Parkside Partners Plans an Overhaul on West Peachtree St

Parkside Partners, known for its loft office projects across Atlanta, plans a $12 million overhaul of a forgotten 3-story building on West Peachtree Street — which happens to sit amid nearly $1 billion worth of planned development. Parkside Partners has reached an agreement with the building’s owner, Providence Bank, to buy and redevelop the property, which stands at the corner of West Peachtree and 16th Street next to the former Trump Towers site.

West Ptree Building

Parkside Partners will call the project 16th Station, and renovations would begin once the developer lands a tenant to anchor the 40,000-square-foot building. The redesign, led by architect MSTSD Inc., would aim for a building with a character and feel like those in the Westside Provisions District.

Parkside Partners joins other developers embracing the adaptive reuse trend, as what vacant land remains within the intown Atlanta neighborhoods continues to climb back to pre-Recession prices, and construction costs for new buildings soar well over $400 a foot. Rents in existing trophy buildings, meanwhile, are rising to some of the highest levels in years, forcing more tenants to consider less expensive alternatives.

Parkside also likes all the projects planned on the northern end of West Peachtree. Consider that MARTA is seeking developers for its mixed-use project at Arts Center station, at 15th and West Peachtree. Nearby, MetLife has assembled more than eight where it’s planning a large mixed-use development. Next door to 16th Station, AMLI Residential is developing a tower on a 1.8-acre site at 15th and West Peachtree Streets. And, several transportation improvements are also in the works, including converting West Peachtree into a two-way street, which could turn the corridor into less of a thoroughfare and create the opportunity for more street-level retail.

Written by Douglas Sams for Atlanta Business Chronicle

Midtown Hotel Sold to Make Way for More

North Point Hospitality Group has unloaded its dual-branded Midtown hotel to pave the way for $155M in new hotel projects in the Southeast. The Atlanta-based hotel developer sold its Hilton Garden Inn/Homewood Suites Atlanta Midtown hotel, a 228-unit hotel off 10th Street to NY-based Carey Watermark Investors for an undisclosed sum. “We continue to be optimistic about the Atlanta market and our growing presence there,” says North Point CEO Jay Patel. “The timing of the sale was such that it represented significant value for both buyer and seller.”

Dual Hotel

Patel says the sale “paves the way for our future development plans. By year end, we expect to break ground on four hotels in the Southeast.” That includes some 605 rooms and a total development cost pipeline of $155M, he says. Patel did not disclose specific hotels, but the firm is opening its 162-unit Homewood Suites in Savannah’s Riverfront historic district this summer—part of a larger River Street East mixed-use development that will include hotels, retail and dining space for $150M. The firm also announced in April that it will develop a $120M tri-branded Marriott hotel in Nashville, including AC Hotel by Marriott, Residence Inn and SpringHill Suites, totaling more than 400 rooms.

Svannah HOtel

 

Written by Jarred Schenke for Bisnow ATL

It’s Selig’s Olde Bar Now

One of Atlanta’s founding real estate families has bought one of the city’s most popular bars. Selig Enterprises has purchased the retail center occupied by Smith’s Olde Bar for more than $3M, according to Databank.

Seligs olde bar

The property, called Morningside Strip Center, consists of nearly 18k SF of retail and another 27,400 SF of land, and has been owned by the estate of Beverly Taylor for more than 90 years. City Realty Advisors’ Tim Holdroyd brokered the sale. “We already have a substantial investment in the area, including Ansley Mall and Ansley II, and this seemed like a natural fit,” Selig CEO Steve Selig says in an emailed statement to us. The center made headlines earlier this year when it was put up for sale, casting a cloud of uncertainty over the fate of the popular Atlanta music venue on the northwest corner of Piedmont Avenue and Monroe Drive. Sources say the owners of Smith’s have signed a short-term renewal. Steve tells us, “Our plan is to improve the premises, work with the owners of Smith’s Olde Bar and lease the balance of the property.” Calls to the Smith’s owners were not returned as of press time. For Selig, the buy represents an opportunity to redo a portion of a prime Atlanta corner just across from Ansley Mall into an urban retail or entertainment complex.

Written by Jarred Schenke for Bisnow ATL

Midtown boom continues with 16 active construction projects

The Midtown boom continues with 16 active construction projects underway, according to a report from the Midtown Alliance. The majority of the projects are mixed-use residential apartments and condo buildings that will add 4,000-plus residential units and 100,000 square feet of retail space to the district.

Midtown Developments map

On the office side, construction crews have begun work on Fortune 500 company NCR’s global headquarters at Spring Street and 8th Street, placing the tech giant near Georgia Tech’s Technology Square. Construction is anticipated to be finished in 2018, and once completed, will add 500,000-plus square feet of office space and labs.

Several projects were completed this year, including two new major residential developments—University House Midtown and Square on Fifth—which moved 1,300 students into the heart of Tech Square during the summer of 2015. The Center for Puppetry Arts also wrapped up the 8,000 square foot expansion of their Spring Street location, making room for new cultural attraction the Worlds of Puppetry Museum and the most comprehensive collection of Jim Henson-designed puppets.

As the year comes to a close, just shy of 40 development projects are now either under construction or in design, having cleared the Midtown Development Review Committee (DRC). Among these are a dual-branded hotel on 14th Street at Peachtree Walk, a Whole Foods store, the redevelopment and expansion of SCAD’s student housing campus Spring House, and a collection of mixed-use residential buildings that range from a 28-story tower to a 4-story infill project.

To see a list and renderings of all the projects, take a look at the Midtown Alliance’s handy Development Tour.

-Written by Collin Kelley for Intown Atlanta

$200M Proton Therapy Center Faces New Questions

A Texas billionaire is claiming millions of dollars of his money was fraudulently used to develop the Emory Proton Therapy Center now under construction in midtown Atlanta.

Written by Douglas Sams and Ellie Hensley for Atlanta Business Chronicle

Oct 9, 2015, 6:00am EDT

Proton Center

Kelcy Warren, founder of Dallas-based natural gas pipeline giant Energy Transfer Partners, claims in Texas court filings the developer of the Emory Proton Therapy Center, Advanced Particle Therapy LLC of San Diego, Calif., improperly transferred $40 million, much of it from Warren. The proceeds were allegedly used as a “piggy bank” to fund other proton therapy centers.

“APT then transferred the funds it took from [business entities in Dallas] to its separate entities in Baltimore and Atlanta, where the funds were presumably used to develop those separate proton therapy centers,” Warren claims in a Sept. 24 court filing in federal bankruptcy court in Dallas. (To read one of the court filings, click here.)

APT’s proton therapy center in Dallas filed for Chapter 11 bankruptcy on Sept. 17. Warren had loaned $20 million to APT for that center.

Warren’s claims are another challenge for the $200 million Atlanta project, which has already fallen months behind.

The 107,000-square-foot Emory Proton Therapy Center broke ground a little over two years ago on Ponce de Leon Avenue at Peachtree Street, just a block from Emory’s Midtown hospital. At the May 2013 ground breaking, Mayor Kasim Reed called the launch of the center a “moment of auspicious beginnings.”

The project was supposed to be completed by November 2016, but Advanced Particle Therapy is now targeting a January 2017 completion date. For now, the project is about 85 percent complete.

In a statement, Advanced Particle Therapy indicated the legal issues surrounding the Dallas project would have no effect on its progress in Atlanta.

“Dallas Proton Treatment Holdings and Dallas Proton Treatment Center are separate entities from the Atlanta project,” said Ashley Preisinger, an APT executive director leading development of the Emory Proton Therapy Center. “Major building construction on the Emory Proton Therapy Center is complete. The next phase of the project is delivery, installation and clinical acceptance of the equipment leading to first patient treatment.”

Preisinger added, “The Emory Proton Therapy Center is committed to this project and its ability to deliver cancer treatment to the metro Atlanta area.”

The proton center would be staffed by physicians from Emory University’s Winship Cancer Institute and Emory Healthcare. Asked about the issues involving APT, Emory Healthcare issued a brief statement to Atlanta Business Chronicle, saying, “Emory is set to operate the proton center once it opens.”

For now, Warren’s allegations give the appearance the Atlanta project is in trouble, said David Smith, a president with Kearny Street Consulting Inc. “If they’re trying to use funding from Dallas across the board and that wasn’t part of the agreement I would say they’re in trouble in general,” he said.

Smith also noted the legal issues come during a critical point in the Atlanta project ­— financing the purchase and installation of its equipment.

The centerpiece is a 9-by-12-foot cyclotron, an incredibly dense piece of high-tech machinery that uses powerful magnetic and electrical fields to accelerate protons — highly energetic subatomic particles — that can be focused precisely on cancer cells. It’s not clear what the machine costs, but the company expects to secure $120 million to $150 million in senior debt for the second phase.

Earlier this summer, APT CEO Jeff Bordok said the company has raised $47 million in convertible equity and $72.4 million from its capital partners for the Midtown proton center. It also entered advanced talks with lenders to finance the second phase, including the purchase of equipment and its installation.

The new legal issues linked to the Midtown project raise the question of whether Emory will have to step up financially to get it moving, Smith said. “Emory has deep pockets. They may be able to find a donor or [pony] up on this, but it’s a big ask to get that type of money.”