MetLife Inc. received conditional approval Tuesday to move ahead with its 9-acre mixed-use project in Midtown at 17th, Spring and West Peachtree.
The project, which includes a 25-story office tower and 250-key hotel, was presented to the Midtown Development Review Committee. Its suggestions for how the giant project should be scaled into the northern edge of Midtown, one of the city’s most walkable neighborhoods, will be passed on to the city of Atlanta for final approval.
“Midtown Union,” as the project is officially known, will also include up to 350 apartments and 87,000 square feet of retail.
The design will feature a connection between the Woodruff Arts Center and the mixed-use town center Atlantic Station, which stands across the 17th Street Bridge. Including “Union” in the project’s name reflects the idea of connection, said Tom Ryan with MetLife Investment Management. Midtown Union includes the latest in a series of newly unveiled Midtown towers. For example, Cousins Properties Inc. (NYSE: CUZ) recently revealed the design of its 30-story tower at 7th and 8th streets. Selig Development Co. has 1125 Peachtree St., which includes more than 200,000 square feet of office space. Greenstone Properties is also planning a 10-story building at 14th and Spring. It will be interesting to see when the towers move from concept to reality.
Hines said it will break ground this month on its new building at Atlantic Station. Plans for T3 were first introduced to the market almost three years ago. Hines confirmed it will move forward as a spec development.
MetLife Inc. (NYSE: MET) remains undecided if Midtown Union will start on a speculative basis, Ryan said. It plans to differentiate the project from others by focusing on its connectivity.
“Its location sets it apart in that it deliberately brings together business, the community, and the arts,” said Mike Sivewright, market director with Jones Lang LaSalle Inc. Its leading the Midtown Union development team.
The design derives from the art and landscape of its pedestrian promenade, said Bill Halter with Cooper Carry, the architect for the mixed-use development.
“Through this project, we will introduce a new standard of design to the workplace by establishing meaningful connections between people and nature,” he said.
T3: an $80 million project that echos the industrial roots of Atlantic Station.
Hines goes spec
A development partnership led by Hines will start construction this month on a new Atlantic Station office building, a sign of growing confidence in the market’s fundamentals.
Known as T3, the $80 million project will feature a design that echos the industrial roots of Atlantic Station, a former Midtown steel plant.
Hines, along with partners Invesco Real Estate and the nation’s second-largest public pension fund, California State Teachers Retirement System (CALSTRS), will begin work on the 230,000-square-foot building amid a historically restrained level of spec development, or projects started without office tenants signed to leases. In Midtown, only 725 Ponce — aka the former Murder Kroger — is underway as a spec office development. It includes 360,000 square feet of office space.
In recent years, Midtown has lured big corporate expansions, including Anthem Inc. and NCR Corp., along with numerous research and development centers around Technology Square.
Midtown’s office fundamentals have responded. Quoted office rents have jumped to more than $36 per square foot, a 21 percent year-over-year increase, said John Heagy, a senior managing director with Hines. In the first quarter of this year, office rental rates climbed more than 5 percent.
Midtown vacancy is hovering around 9 percent.
“We are seeing unprecedentedly low vacancy and an increase in rates that justifies new construction,” Heagy said.
T3 will officially break ground May 17. Hines wants to complete the building by summer of 2019.
New South Construction won the job as the project’s contractor.
It will be interesting to watch if more capital sources are confident they can justify underwriting the construction of new buildings and still have the ability to exit the deal, even when those costs exceed $400 a foot.
The restraint lenders have shown for new construction have allowed rents to not only soar. It’s provided an opportunity for towers such as Three Alliance in Buckhead to trade for such a high price. Because it had fewer new buildings to compete with for tenants, it was able to lease-up at higher rents.
Buckhead Tower will be the new North American HQ for Networx Systems.
Networx Systems is relocating its North American headquarters to a 19-story office tower by Lenox Square. Networx Systems will relocate to Buckhead Tower, where it expects to nearly double to about 200 employees by 2020. CEO Steve Storch said the move is a significant upgrade from the company’s current offices at 8800 Roswell Rd. Networx needed more space and wanted an environment that could match its growth-oriented culture.The tower is adjacent to the Buckhead MARTA station and counts among its tenants State Bank, Gables Residential, Applied Systems and Crowe Howarth.April Parrish, Kirk Diamond, Erin Smith and Stephen Bellwood of Cushman & Wakefield secured the lease on behalf of Networx Systems. Adam Viente and Jeff Frantz of Jones Lang LaSalle represented the landlord of Buckhead Tower, Parmenter Realty Partners.Noro Management has picked up the Peachtree 25th building in south Buckhead for slightly more than $62 million, according to Fulton County property records. The seller was Peachtree 25th Property Owner LLC, an affiliate of Atlanta Property Group, or APG. It acquired the 365,560-square-foot building in the Brookwood area just north of SCAD Atlanta more than a decade ago. It invested in significant upgrades, including improvements to the building’s exterior.
Marcoux is president of Opus MedStrategies Inc.
Opus MedStrategies Inc. is putting its North American HQ in Alpharetta. It will be housed at Sanctuary Park, Oak View I building. The company is taking a small space now, but its goal is to expand to at least 100 employees over the next few years, said Bob Marcoux, who is leading the expansion in Atlanta. Opus MedStrategies offers risk management and consulting for health care benefit plans and providers. Alpharetta’s history as a healthcare IT hub played a significant role in Opus MedStrategies choosing Sanctuary Park.A 21-building portfolio of suburban Atlanta business parks has traded hands for $41 million. The Ardent Companies acquired the 880,000 square feet of warehouse/flex properties. The two separate business park included nine buildings in Marietta’s Franklin Forest Business Park and another 12 in Norcross’ Northwoods Business Office Park. Ardent paid about $47 a foot, or $41.4 million, according to people familiar with the transaction. Managing Director Scott Werbel said the real estate company will start capital improvements to the properties and launch a strategy to attract new tenants.Ardent acquired the portfolio in a partnership with Axonic Capital LLC and Taconic Capital Advisors LP. Axonic is a New York based investment advisor founded by Clayton DeGiacinto in 2010. Taconic is a global institutional investment firm founded in 1999 by former Goldman Sachs partners Frank Brosens and Ken Brody. Ardent has completed several large transactions over the past year, including an expansion of its ownership in Buckhead’s Piedmont Center, where it now controls nine buildings and 63 percent of the project.After recently putting a trio of apartment buildings near SunTrust Park on the market, the Atlanta Braves may offer more pieces of The Battery mixed-use project to investors. Mark D. Carleton, CFO of parent company Liberty Media Corp., told analysts today that The Battery is performing “well above projections” and that the club will consider selling other pieces of it if that makes sense. “In general as we look at those projects down at The Battery, to the extent that we think it makes the most sense to sell those off to our partners or others, we’ll certainly look at those…” Carleton said. “So far, we are performing well above I think what our projections have been on lease-up and on revenue and on activity down there. So it’s going very well.” The Braves own part of the Omni Hotel and the Comcast building at The Battery. Carleton said being able to maintain the look and feel of SunTrust Park and The Battery the experience for fans is key. “We’ll be opportunistic as some of these projects get closer to completion and fully online,” he said. Liberty CEO Greg Maffei went a bit further. “We think the Battery combined with The Braves is a unique live experience. Our strength comes from developing interesting opportunities around that, including residential including office, including the Live Nation music environment we have there — all of those things. “But we don’t necessarily see ourselves as long-term holders of real estate assets,” he said. “We see ourselves as people developing interesting opportunities.”
ATLANTA RISING: The latest plans filed from across the region
Lawrenceville has unveiled plans for a new $26 million downtown arts center that will connect to the existing Aurora Theatre.
With more than 50,000 square feet of space, the new center will include the new 525-seat Cabaret theater, classroom and practice space and offices.
“This exciting project continues the transformation of the downtown area,” Lawrenceville Mayor Judy Jordan Johnson said. “Lawrenceville is the heart of Gwinnett [County] and maintains a central area rich with activity for all generations.
This facility will bring the arts community together with educational opportunities and all the other amenities that our vibrant community has to offer.”
The city is partnering with design firm Stevens & Wilkinson. A request for proposals has been issued to select a construction contractor during the next 60 days.
Construction is expected to begin early next year, and the project is due to be completed by mid-2020.
A developer is proposing two seven-story apartment buildings next to the Kensington MARTA station, according to plans filed with DeKalb County.
The 2.7-acre property along Memorial Drive would be developed with 218 one-two-and-three-bedroom units.
The site, which stands across from a fenced-off surface parking lot that once served the MARTA station, needs to be rezoned for high-density residential use, according to an application submitted to DeKalb County.
The developer, Kensington Station LLC, said the project will allow for higher-density residential uses around the station. It’s also proposing a six-story parking deck as part of the redevelopment.
The rezoning would become a spark for other projects within the Kensington-Memorial Drive Overlay district, according to the application.
A South Carolina developer has taken another step on a giant mixed-use project in Covington, Ga. that would feature multiple hotels, several hundred residential units and 400,000 square feet of retail.
The Foxfield Co., based in Bluffton, S.C., has submitted the project as a Development of Regional Impact, or DRI.
The process has triggered the Northeast Georgia Regional Commission to get involved to prepare for the development’s effect on local traffic and infrastructure.
The DRI typically reflects a project’s maximum density for an area, but it doesn’t necessarily mean it will be developed to that scale.
Covington Town Center is planned along Alcovy and City Pond roads. It would include 400,000 square feet of retail and commercial space, 400 residential units, 250,000 square feet of office space, and 450 hotel rooms, according to DRI filing.
The project would also rise close to a nearly 200-acre film studio and entertainment complex in Covington, which is about 35 miles east of Atlanta.
The Foxfield Co. could not be reached for comment, but President Harry Kitchen told Atlanta Business Chronicle last year that the town center project will get a boost from being developed near the studio.
Covington Town Center is expected to take at least five years to complete.