Category: Commercial Real Estate

A Bright Spot in Office Leasing: Mixed-Use Projects

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Marketing Staff

These are challenging times for the office sector.

Vacancy rates have surged as the hybrid home/office work model and job cutbacks in high-tech and other sectors are leading companies to reduce their office footprints. The vacancy rate in metro Atlanta has risen to 15 percent, the highest level since the global financial downturn of the late 2000s.

Tenants increasingly favor newer buildings and also have the option of exploring potential bargains in the growing amount of sublease space in the market. These trends present hurdles for landlords working to fill vacancies in their buildings.

However, in its recent Atlanta office sector report, CoStar points out that one of the bright spots in the market is the stronger leasing demand in areas of 18-hour activity. These areas frequently feature mixed-use developments as their focal point – including The Battery Atlanta at the Atlanta Braves’ Truist Park and at Ponce City Market along the bustling Eastside section of the popular Atlanta BeltLine multi-use trail.

These districts offer an exciting mix of amenities that are attractive to employers seeking to attract talent. Truist Bank is developing a 250,000 SF office tower at the northwest side of Truist Park, a location offering walkable access to the Battery’s array of restaurants, bars and retail offerings. Sage Software has committed to occupying 57,000 SF at a timber loft-office building under development at Ponce City Market, setting a rental rate record of $70 per square foot.

In the West End, a neighborhood just south of Downtown Atlanta, the Lee + White adaptive reuse development has become a hub of the community, attracting visitors to its breweries, retailers and outdoor spaces. One of the project’s biggest draws is its four direct access points to the Westside BeltLine.

These amenities at Lee + White were a significant factor in the decision of two high-tech companies to open headquarters featuring creative offices and production space in the refurbished Building 1050 – cleantech energy company JTEC Energy Inc. and nanotechnology innovator Carbice Inc.

After opening its new facility, located right next to the BeltLine, JTEC Energy CEO Mike McQuary spoke about the benefits of selecting Lee + White for its new home.

“Our offices, including our All-Hands Room, are designed for collaboration and communication. And the team is enjoying exploring our new neighborhood, trying all the restaurants and walking on the Beltline at lunch,” he said.

The 442,562 SF development, a partnership between owners Ackerman & Co. and MDH Partners, is transforming the former “Warehouse Row” in the West End. In addition to the breweries, food manufacturers and retailers that opened in the first phase of the redevelopment, the newest phase is adding a 19-vendor food hall and Class A creative offices in the redesigned 929 Building, which offers more than 100,000 square feet across two floors.

The food hall is now open, and the loft-style offices of the 929 Building, featuring floor-to-ceiling windows overlooking the BeltLine, are nearly completed.

With BeltLine accessibility unmatched by any other development in Atlanta, several newly opened food hall eateries – with more to open very soon – expanding retail offerings, and popular breweries available to tenants and visitors alike after a busy day of work, Lee + White could be viewed as the West End’s version of The Battery or Ponce City Market.

Ponce City Market and The Battery have certainly attracted high-profile office leases. Lee + White has already announced a few of its own and is hoping to complete even larger ones soon now that the 929 Building is available.

Mid-Year Atlanta Market Review – Retail Continues Its Comeback

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Marketing Staff

The year is now half over, and some clear trends are emerging in commercial real estate.

Chuck McShane, Director of Market Analytics for CoStar, recently presented the “Atlanta State of the Market,” and one of the positive stories is the ongoing resilience of the retail sector.

This resilience comes at a time when the office sector faces the challenge of large amounts of sublease space entering the market, and the multifamily sector is experiencing flat absorption and a slight decline in rental growth amid a surge of new supply. The industrial sector continues to shine, although its record-setting performance appears to be entering a new phase of more modest absorption and demand levels.

Limited New Supply Creates Competition for Retail Space
In Atlanta’s retail sector, the vacancy rate at the mid-point of the year is 3.7%, a historic low for the market. In addition, year-over-year rent growth is 6.7%, positioning Atlanta as one of the few markets in the country where rent growth is outpacing inflation.

What accounts for these impressive stats?

Metro Atlanta is benefiting from continued strong job growth – which has doubled the U.S. average over the past few years – and the return of robust population increases, posting a 1.5% rise in new residents as of the first quarter of 2023.

“Because of the population growth, what we’ve seen in Atlanta is we’re one of the top markets for total absorption and for rent growth,” said McShane.

There has been minimal new retail supply added to the market, and the growth of experiential concepts is heightening demand for space, backfilling vacancies including those that are occurring due to some high-profile retail brand bankruptcies.

“We haven’t built a lot of spec development, so we’ve only built the property that we need, really. And over the last 10 years, we’ve seen leasing activity in retail outpace new deliveries, so that’s led to a compression in vacancies,” McShane said.

He added, “Free-standing retail, power center retail, neighborhood centers, places close to people’s homes that provide experiential retail, and that provide goods and necessities that can’t necessarily be bought online, are really seeing very tight compression because there’s not enough new supply coming online. Not much has been built since 2010.”

Negative news, including the declared bankruptcies of Bed, Bath & Beyond and David’s Bridal, are not likely to have a major impact on the market.

“These announcements of bankruptcies have captured a lot of headlines, but if you look at what’s happening to these spaces they’re vacating, I guarantee there’s several letters of interest going out for those spaces in every market that are high-quality, well-located retail space, which is very scarce in every market.”

He said the retail sector can expect headwinds due to the shaky state of the economy, but noted that Atlanta is in a strong position to weather potential obstacles.

“We do expect rental growth to slow down going forward because we are starting to see a little bit of a slowdown in consumer spending and retail leasing,” he said.

But the long-term prospects are encouraging for the retail sector in Atlanta, as population growth continues to drive demand while the new supply pipeline remains comparatively limited.


Meeting Patients ‘Where They Live’

Posted by
Steve Webb

Grady Healthcare System to open outpatient clinics at Ackerman & Co.-owned properties in metro Atlanta to bridge healthcare gap.

Grady Health System is striving to cover gaps in healthcare access, particularly in underserved areas of Fulton and DeKalb Counties.

Two new neighborhood health centers that Grady will open later this year in these parts of metro Atlanta are important steps in that initiative. These centers, located in Ackerman & Co. properties, will provide comprehensive primary care and specialty services.

Grady, which is one of the largest safety net health systems in the U.S., will establish a 16,342-square-foot outpatient center at Lee + White, the popular mixed-use development in Atlanta’s West End community. The health system will also open the Cascade Outpatient Center at 3355 Cascade Road in Southwest Atlanta.

These new centers are examples of Grady taking steps to meet patients closer to where they live to remove barriers to health treatment. In opening the new centers, Grady is seeking locations that are close to dense housing and that provide convenient transportation options.

Lee + White definitely meets those criteria. It’s in the heart of the West End community just south of Downtown Atlanta, walkable from the surrounding residential streets, and it’s less than a half mile away from the West End MARTA rail station, further improving its accessibility. The Cascade Road neighborhood center is conveniently accessible via Cascade Road and I-285 and is surrounded by Cascade Heights and other neighborhoods.

“We conducted research and identified these neighborhoods that have seen significant population growth but have historically lacked access to primary and specialty care,” said John Haupert, President and CEO at Grady in an announcement about the new centers.

He added in an interview with WANF (Atlanta News First): “We care about health improvement and health equity, and to achieve that you’ve got to get services where people live.”

By opening neighborhood-focused health centers, Grady is also able to tailor services to meet the needs of the community. The Lee + White and Cascade Road centers will provide comprehensive primary care and specialty services, including cardiology, HIV services, mammography, rehabilitation, x-ray, lab and pharmacy.

“Based on the communities’ health issues, we custom-design the availability of specialty care to that neighborhood,”  Haupert said.

These new outpatient centers at Cascade Road (scheduled to open in July) and Lee + White (targeted for a late 2023 opening) also address the impact of the closures of Wellstar Health System’s Atlanta Medical Center and Atlanta Medical Center South. Grady received federal and state funds from the Georgia Advancing Innovation to Deliver Equity (GA-Aide) program to open the two new centers.

Lee + White’s Diverse Offerings Now Include Medical Services
In acquiring the Lee + White mixed-use development in 2019 and continuing the transformation of the 442,562-square-foot property, Ackerman & Co. and investment partner MDH Partners had a goal of diversifying the offerings by expanding the roster of breweries, retailers and restaurants to include office users and essential services benefitting residents of the West End.

In the past year, the owners have added a number of businesses and service providers, including high-tech companies such as Carbice and JTEC. Healthcare providers Westside Dental and Team Rehab also have recently opened at the mixed-use hub.

“With Grady occupying Building 1000, we are getting closer to Lee + White becoming a one-stop-shop for all dining, shopping, entertainment and practical service needs,” said Jeff Small, CEO of MDH Partners.

Frank Farrell, Ackerman & Co. Senior Vice President, noted that the addition of Grady and other tenants are an important asset to the West End community. Farrell completed the lease with Grady on behalf of ownership at Cascade Road, and Cushman & Wakefield’s Porter Henritze and Melanie Garlock completed the lease with Grady at Lee + White.

“In addition to a shortage of healthcare services, this part of Atlanta has been underserved in retail, restaurants and office space, and Lee + White is helping to fill the void,” Farrell said. “With Grady opening at Lee + White as well as on Cascade Road, residents will be able to travel a short distance instead of having to drive to Buckhead or another part of the city for healthcare services.”

Coming up later this year, Lee + White will also be opening a 19-vendor food hall and more than 100,000-square feet of Class A creative offices in Building 929.

Ackerman & Co. and MDH Partners’ Lee + White Project Wins CoStar Impact Award

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Marketing Staff

‘It is helping to push the West End to be the new bright spot in Atlanta’

Some of the key members of the Ackerman & MDH  Lee + White team

The buildings formerly known as “Warehouse Row” in Atlanta’s West End have been transformed from the days when they served as packaging and distribution facilities for regional grocery stores. Now called Lee + White, the adaptive reuse project encompassing 442,562 square feet now houses popular breweries and restaurants, cutting-edge technology and energy companies, a whiskey barrel house, a climbing gym, co-working space, food manufacturers, charitable organizations – and soon, a 19-vendor food hall and “Great Lawn” gathering space.

The transformation of the property together with its impact on the surrounding community recently earned Lee + White a CoStar Impact Award for Redevelopment of the Year in Atlanta.

Ackerman & Co. and MDH Partners acquired Lee + White in 2019, continuing the redevelopment of the property.

The CoStar award judges emphasized that Lee + White is helping to revitalize the West End.

“This development is bringing life to an area that has long suffered. It is helping to push the West End to be the new bright spot in Atlanta,” said Avison Young Research Manager Sara Barnes.

Added Christa DiLalo, Director of Research at C&W: “As a frequent visitor to Lee + White’s experiential and food/beverage tenants, I feel Ackerman and MDH were truly successful in ‘place-making’ and with the addition of high-profile office tenants, they are continuing to drive revenue to the West End.”

The growing tenant roster at Lee + White includes food and beverage favorites ASW Exchange, Best End Brewing, Box Car, Hop City, Monday Night Garage and Wild Heaven West End Brewery.

There are also a wide mix of retailers, experiential destinations and medical service providers such as The Overlook Boulder + Fitness, Beya Salon Studios, A Chiropractic Hub, Team Rehab, Cultured South and Doux South Pickles.

Perhaps the most anticipated part of the project, the food hall will feature an eclectic mix of established and newly launched concepts: Cielito Lindo, Costa Coffee, Crème de la Crepe, Dough Boy Pizza, Gekko, Good Azz Burgers, Honeysuckle Gelato, Mochinut, The Original Hot Dog Factory, Pastaholics, Sakura Sake Bar & Bottles, Sweet Red Peach, Vietvana and World Chicken. The food hall is scheduled to open later this year.

In addition, the 929 Building (which will also open in 2023) will offer state-of-the-art loft office space that will attract additional businesses to this increasingly vibrant hub of the community. Flex Building 1050 has attracted innovative technology companies: Carbice, a nanotechnology company, moved into a 23,367-square-foot headquarters with state-of-the-art production space in the building last year, and renewable energy producer JTEC signed a lease to create an 18,755-square-foot lab and collaborative office space. The expanding mix of businesses and services also include Utility Energy Services, a Michigan-based energy consultant that established a new Georgia office at Lee + White, and The Reinvestment Fund, a non-profit community revitalization organization.

Demand for industrial space stays strong amid economic uncertainty

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Marketing Staff

Leasing holding up ‘remarkably well’ but market changes could curb unprecedented momentum.

Ackerman & Co.’s Braselton Crossroads project

An uncertain economy combined with an increase in project deliveries hasn’t done much to slow down the industrial sector. The Atlanta industrial market – the fifth largest market in the country with an inventory of 794 million SF – continues to chug along, with strong demand keeping vacancy levels at near-historic lows.

Despite a significant uptick in construction activity in metro Atlanta, the vacancy rate registered an impressively low 3.3% in November, according to CoStar, near the record low of 3.1% set in the Atlanta market in late 2021. The construction pipeline has been growing to meet rising demand, with 40,548,868 SF of industrial space under construction in the third quarter of 2022 compared to 30,487,470 SF at the same time last year.

E-commerce, 3PLs, cold storage, retail, biomedical, construction and automotive are among the industries boosting demand and contributing to low vacancy levels.

However, troubling economic signs – including two quarters of negative economic growth in 1Q and 2Q 2022 – and the increase in project deliveries are among the trends that could limit leasing velocity.

“U.S industrial leasing has held up remarkably well in recent months, even as rising inflation and interest rates have begun to wear on the broader economy,” CoStar reports in its 3Q 2022 National Industrial Report. However, the report added, “Risks that industrial leasing will moderate back down toward more normal levels in 2023 are accumulating. In addition, the report continues, “Leading indicators of economic growth… have been flashing warning signs since the Federal Reserve began raising interest rates in early 2022.”

Rising construction activity in the sector is likely to produce a slight increase in vacancies. “Barring a severe shock to the U.S. economy and industrial leasing, the volume of space under construction looks set to drive a modest increase in vacancy, but not to dramatically shift the market in tenants’ favor,” CoStar reports.

Ackerman & Co.’s current developments are leasing fast
Ackerman & Co. is among the developers of industrial space that heightened investment in new development in response to surging demand, and the firm anticipates continued steady demand for distribution space.

The firm’s current industrial projects include three distribution facilities at Braselton Crossroads in Atlanta’s I-85 North corridor totaling 460,000 SF, and a 168,000 SF distribution facility at Rockdale Technology Center in Atlanta’s I-20 East corridor.

Ackerman has also expanded into Texas, where it is developing Doerr Lane Logistics Center, a 307,000 SF Class A distribution center located in the fast-growing market between San Antonio and Austin.

“We have leased 260,000 SF before completion of the buildings at Braselton. Activity is very strong,” said Brett Buckner, Senior Vice President of Ackerman & Co.’s Industrial Services Group.

He and Chris Miller, Vice President of Industrial Leasing at Ackerman, have succeeded in pre-leasing all of 160,000 SF Building 200 at Braselton Crossroads and have pre-leased two spaces totaling 100,000 SF in 150,000 SF Building 300.

At Doerr Lane, Ackerman is in the process of negotiating leases that could soon fill up the 307,000 SF facility.

“We’re optimistic that demand will remain strong from a wide mix of users, particularly for Class A properties with high ceiling heights and strong Interstate access like the facilities Ackerman is currently developing,” Chris Miller said.

Shipping Containers Attract an Eclectic Mix of Retailers at Lee + White

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Marketing Staff

Container village opening this fall provides a unique, affordable brick & mortar option for new and growing businesses.

For businesses seeking brick-and-mortar space to sell their products, conventional storefronts can present challenges. Retail space is becoming increasingly scarce – CoStar reports that Atlanta’s 3.9% vacancy rate in 3Q 2022 is the lowest this century – and leasing costs are on the rise.

Businesses interested in expanding beyond an online presence or opening a new location have an affordable and unique option at the popular Lee + White mixed-use development in Atlanta’s West End neighborhood – shipping containers.

Investment partners Ackerman & Co. and MDH Partners are integrating a container village at the property. Five shipping containers – located steps away from the project’s retailers, offices, breweries and restaurants – have attracted a variety of businesses ranging from an electric bike shop to specialty goods and eco-friendly retailers.

Featuring brightly painted exteriors with glass-door storefronts and entries, the containers occupy a prominent position on the property facing White Street next to a paved path providing access to the Atlanta Beltline.

“There’s no better or more affordable way for a business to get a start in a brick-and-mortar location than at a container space like this,” said Ackerman Retail SVP Kelly Wilson, who is leading the retail and food hall leasing efforts at Lee + White on behalf of ownership. “We’re excited about the unique mix of businesses that will be opening in our container village providing an affordable alternative for retailers to grow their businesses, and we’re thrilled that sustainable and eco-friendly products are part of the mix of items offered.”

Instead of a traditional lease, businesses sign a short-term license agreement (often 12 months or less), with costs included for power and other utilities. The lower cost and the short-term length of the agreement provide flexibility for businesses, which typically have the option to extend the license agreement to stay in the container space, or may ultimately choose to move into a larger leased space.

The Lee + White container village is launching this fall with a dynamic and eclectic group of businesses. Kelly has completed agreements with: Atlo, specializing in eco-friendly refills of everyday products; Coastal Green Wellness, a seller of organically produced CBD and hemp products, opening its second Atlanta location; Edison Bicycles, a locally-owned business selling its own brand of electric bikes, launching its third Atlanta location; Erin Smith Art, offering unique greeting cards, gift items and party supplies; and Highfalutin Press, selling a variety of gift products and specialty items.

The container retailers will benefit from heavy foot traffic from visitors to Lee + White’s exciting mix of tenants, which in early 2023 will include a 19-vendor food hall. They’ll also be able to draw customers from the bustling BeltLine trail, which is accessible via four direct entrances at Lee + White, unmatched by any other development in Atlanta.

Acquired by MDH Partners and Ackerman & Co. in September 2019, the ongoing adaptive reuse redevelopment recently welcomed the grand opening of the new headquarters and production facility for nanotechnology innovator Carbice. The lineup of food hall tenants so far includes Lake & Oak BBQ, The Original Hot Dog Factory, Gekko Hibachi & Sushi, Honeysuckle Gelato, Pastaholics, Crème de la Crepe and Cielito Lindo taqueria, with more eateries to be announced soon.

Community Engagement: Ackerman & Co. Includes Properties in West End CID to Benefit Community Initiatives

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Marketing Staff

Ackerman & Co. and MDH Partners are making exciting progress transforming the former “Warehouse Row” buildings in Atlanta’s historic West End community into a go-to mixed-use destination.

But the investment partners are involved in more than real estate development in the West End. In addition to forging ahead with the adaptive reuse development – which includes the addition of a food hall and Class A offices at the popular entertainment destination – Ackerman & Co. and MDH Partners are committed to supporting efforts to improve the community.

An example of this is the decision to include two projects in the West End Community Improvement District: the 442,562-square-foot Lee + White project at the corner of Lee and White streets that Ackerman & Co. co-owns with MDH Partners and the Ackerman-owned 1200 White Street, a 212,500-square-foot facility now included within the CID.

Formed in 2017, the CID funds a variety of infrastructure, public safety and other initiatives. Ackerman & Co. will contribute extra property tax revenues from its properties located within the CID to help fund the CID’s programs.

West End Improvements
“We’re very happy to support the wide variety of initiatives underway in the West End CID that will benefit West End residents and those visiting the community,” said Leo Wiener, President of Ackerman Retail, the division of Ackerman & Co. spearheading retail and restaurant leasing at Lee + White.

Added Evan Ziegler, Senior Vice President of Investments for Ackerman: “As the owner of the recently acquired 1200 White Street Building, in addition to Lee + White, we see great value in becoming a member of the West End CID. It’s exciting to see the expansion of the CID along White Street.”

The West End CID’s initiatives include community programs such as the weekly Fresh MARTA Market and the Soccer in the Streets program at the soccer field next to the West End MARTA station.

The I-20 cleanup and landscaping project at the Lee Street and Joseph E. Lowery Boulevard interchanges and a storefront redesign program and pedestrian improvements along the Ralph David Abernathy Boulevard corridor are among the current West End CID priorities.

The CID also has received a dedicated patrol car that will be used for safety patrols in the community.

“Ackerman bringing their properties into the West End CID is a huge win for us,” said Chris Pierre, Project Manager for the West End CID. “The fact that Ackerman sees the benefits of the CID speaks positively to other property owners who might be interested in including their projects in the CID.”

More about Ackerman & Co.’s West End Projects
A reinvention of mid-20th century warehouse buildings in Atlanta’s historic West End, the trendsetting Lee + White mixed-use development is a melting pot of homegrown entrepreneurs and innovative businesses. Craft breweries, distilleries and food manufacturers are among the pioneers that joined Lee + White in the first phase of the redevelopment. The next phase of the transformation is adding creative loft offices, a 19-vendor food hall, unique retail concepts and a Central Lawn gathering place.

Located just down the road from Lee + White, 1200 White Street is a 212,500-square-foot facility providing convenient access to two nearby MARTA rail stations and MARTA bus service.

Posted by
Marketing Staff

The economic news has been a bit gloomy in recent months.

Inflation has reached a 40-year high. The Federal Reserve raised interest rates twice in a two-month span to fight inflation. Consumer confidence is shaky.

At this time of economic uncertainty, it was a perfect opportunity for the NAIOP Georgia May Breakfast panel topic focusing on trends in commercial real estate investment.

Moderator Lance Patterson of Patterson Real Estate Advisory Group, started off the panel by quoting some famous opening lines from literature: “It was the best of times, it was the worst of times… It was the spring of hope, it was the winter of despair…”

Those lines from A Tale of Two Cities, he said, are a reminder that our current circumstances aren’t uniquely challenging. “We always think these times are hard, and no doubt they are, but we also think there are some good opportunities. So we’re going to try to be positive as well as realistic about what’s going on,” Patterson said.

He was joined in a wide-ranging and lively discussion on the current state of CRE investment by Kris Miller, President of Ackerman & Co., Tuba Malinowski, COO of Stockbridge, and Travis Johnson, Investment Director of Principal.

The panelists agreed that it’s important not to get carried away by the doom and gloom of today’s headlines.

“Ultimately, nothing’s as good as we think it is and nothing’s as bad as we think it is,” said Tuba Malinowski.

Kris Miller emphasized that, as a real estate investor, you shouldn’t become too distracted by economic and capital market considerations.

“Run the real estate as real estate. Make real estate decisions and the capital market issues will sort themselves out. Overall, you will be much more profitable in the long run doing what’s right for the real estate and you’ll also have way less angst,” he said.

Office investment opportunities
Buoyed in part by the boom of e-commerce, demand for industrial space has reached historic highs and made the sector a favorite among investors. While the office sector faces significant challenges, including an abundance of sublease availabilities, there is good reason for investors to keep office investment on their radar.

“The positive thing to me about the office market is that many of us decided we like going to work. We like consuming the product of office space and we don’t like working in our basement. We don’t like not seeing other people,” Miller said.

Opinions from some experts that the work-from-home model would become commonplace in a post-COVID world were likely overstated. Strong leasing volumes nationwide over the past three quarters demonstrate that companies are definitely returning to the office.

“They [office users] are looking for office space that is memorable,” Miller said. “You have to offer something that’s better than other office product, and that can be a lot of different things.”

Malinowski said Stockbridge continues to pursue office investment, but added her firm tends to be more selective in its office acquisitions than its industrial investments.

“It’s a matter of looking on an asset-by-asset basis, looking at the historical vacancy, and is it an asset that people want to come to, whether because of the people who are there or the amenities around it or the general surrounding area. I think all of our decisions about office properties are really on an asset-by-asset basis, whereas for industrial we can make more of a broad market decision,” she said.

Travis Johnson of Principal noted his firm is taking precautions by factoring in economic conditions when evaluating assets.

“We do a simulation of a moderate recession where we take each asset and plug it in… and see how that property performs under that type of stress,” he said.

While Kris Miller said his firm is keeping an eye on economic and capital market conditions, he added: “Our view is that inflation and interest rates are going to bump up, but it shouldn’t really change which properties you like and which you don’t.”

In other words, keep your focus on the fundamentals of real estate in the best of times and worst of times.

Industrial Developers Are Picking up the Pace of Projects to Meet Growing Demand

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Marketing Staff

Demand for industrial space has reached record levels, and developers are moving fast to keep up with demand.

In a recent report, “The Race for Industrial Space,” JLL notes that “given the heightened demand experienced in 2020 and 2021 and the velocity at which it is going forward, we are starting to see the first wave of a supply crunch.”

Ackerman & Co. is one of those developers jumping in to meet the need for Class A industrial space, and the firm is making sure to offer design features that are highly sought after by today’s modern distribution operations.

“Companies in industries such as e-commerce, 3PL and logistics and distribution companies are leading the way with… utilization of modern facilities to attract labor as well as move goods in and out,” the JLL report states. Particular features today’s distributors are seeking include high ceiling heights, plenty of auto and truck parking, and convenient access to major interstate corridors.

Providing the most efficient space
New projects Ackerman & Co. is currently developing new projects from Georgia to Texas that offer the key advantages today’s distributors seek.

In metro Atlanta in the I-85 North corridor, Ackerman & Co. is developing Braselton Crossroads, a Class A master-planned park that will feature three distribution buildings totaling 470,000 square feet – two 160,000-square-foot buildings and a 150,00-square-foot building. Now under construction, the facilities will feature 30 to 32 feet clear heights and rear-road configurations. A crucial benefit is the direct access to Interstate 85 less one-half mile from the project, and the buildings will offer abundant parking.

Also in the Atlanta market in the I-20 East distribution corridor, Ackerman & Co. is developing facilities of 168,480-square feet and 50,000 square feet. The site, part of the Ackerman-developed Rockdale Technology Center development in Conyers, GA, offers high visibility along the Interstate and convenient access to the nearby full-diamond interchange, only one mile away. It also will feature the crucial high ceilings (30 feet).

The features that Ackerman & Co. is incorporating at its projects are important for e-commerce, logistics and other industrial space users looking for space with the most efficient designs and strategic locations to reach customers quicker than ever before.

As Ackerman continues to heighten its presence in strategic logistics markets, it is expanding in Texas. The firm has begun construction on Doerr Lane Logistics Center, a 307,000-square-foot, Class A distribution center positioned between San Antonio and Austin in an area known as the Texas Triangle, the fastest-growing region in Texas.

The state-of-the-art facility will feature 32-foot clear heights, extensive auto and trailer parking and quick access to I-35, Loop 1604 and I-10.

In another Texas project in the same submarket, Ackerman is planning more than 500,000-square-feet of distribution space with 32-foot clear heights at a site providing great access to the I-35 access road, only ½ mile away.

“We’re seeing strong interest for our available space from users ranging from retailers, food distributors and medical supply companies to e-commerce operations and manufacturers,” said Brett Buckner, Senior Vice President of Ackerman & Co.’s Industrial Services Group, who is leading the leasing efforts at Ackerman’s Georgia industrial properties along with Vice President Chris Miller.

Industrial market outlook remains strong
As Ackerman & Co. moves forward with these projects – with more planned developments coming up in Texas, Alabama and its core market of metro Atlanta – developers nationwide are also ramping up their development pipelines.

There is certainly good reason to pursue development given the ongoing robust demand. Atlanta set a record for annual absorption in 2021, registering more than 39 million square feet of positive net absorption for the year, according to CoStar. Nationwide, vacancy rates have hit a record low of 4.0 percent.

Although there is a significant uptick in the construction pipeline – to a record of 816 million square feet nationwide – the additional inventory is not expected to tilt the market unfavorably, CoStar states. However, the rise in inflation has the potential to “erode consumers’ purchasing power and dent the current boom in consumer goods spending and industrial leasing.”

Still, the outlook for industrial demand remains positive for developers.

“National rents are poised to continue growing well ahead of inflation over the next several months given the current near-record low level of vacancy,” CoStar reports.

Atlanta’s Surge in Adaptive Reuse Development Continues from Intown Neighborhoods to the Suburbs

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Marketing Staff

Developers say they are committed to incorporating affordable options and community-focused services to offset potential gentrification.

Adaptive reuse projects are booming across metro Atlanta.

The projects range from repurposing old warehouse properties into mixed-use developments to converting factory buildings into loft-office space and restoring small retail spaces housed in historic buildings, among other examples.

Although adaptive reuse development was largely concentrated in intown Atlanta when the trend took off in the 1990s – with King Plow Arts Center in West Midtown one of the prominent examples – it is now increasingly common in the suburbs as well.

In a recent Bisnow adaptive reuse event, representatives of several Atlanta commercial real estate companies discussed notable adaptive reuse projects – both completed and under development – and the challenges of bringing these projects to fruition.

Developers are increasingly being called upon to address gentrification. Projects can face opposition over concerns that they will price out residents and businesses who were part of neighborhoods before developers arrived on the scene.

No stranger to those concerns are developers such as Jamestown, credited with energizing the adaptive reuse movement in Atlanta with its hugely successful Ponce City Market redevelopment and Newport RE, whose Hotel Row project is part of its larger vision of revitalizing the once-bustling commercial districts on Mitchell and Broad Streets in South Downtown.

“About 20 percent of the square footage we purchased was occupied, probably half of those to tenants that no one in the neighborhood wanted,” said April Stammel, Senior Vice President at Newport. “I think it’s about telling the right story and letting people know what the real impact is.”

The story Newport is emphasizing to the community is how their development will revitalize a historic but long-neglected part of the city’s urban core.

“This story is about the opportunity. We’re turning the lights back on. We’re bringing life back to these buildings,” she said.

Creating Affordability
Michael Phillips, President of Jamestown, said his company is committed to integrating community-focused features into its projects such as workforce housing and more affordable business rates.

“You can’t whitewash the fact that we’re changing the demographics of neighborhoods,” Phillips said. “We all have to be committed to creating opportunities and economic benefits for everyone. We’re just starting… but we all have to find our ways to do it.”

Tapping into local, state and federal incentives can provide funding that developers can use to pass along savings to prospective residents and businesses. Newport received $8 million in Tax Allocation District (TAD) funding for their South Downtown project.

“What that’s going to give us the ability to do is offer affordability in both the residential and commercial components,” said April Stammel. “When you think about what that means in the diversity of tenancy, not only diversity of residents, it’s incredible. We can now offer certain spaces for tenants like arts groups who can’t pay market rent or new restauranteurs who can’t afford market rent.”

Arun Nijhawan, Managing Principal of Lucror Resources – which renovated and repositioned Downtown Atlanta’s famous Flatiron Building – said there are also plenty of examples of projects receiving community support. Such was the case with the company’s $80-million Waldo’s Old Fourth Ward, a mixed-use development featuring a hotel, office space, retail and townhomes.

“To the surprise of our team, we got zero resistance. The question was, ‘when are you going to start?’” he said, noting that the project’s location several blocks away from the BeltLine in an area where “you had a certain amount of urban blight” contributed to the support from the community.

From the West End to Northlake
Ackerman & Co. is also active in adaptive reuse development. With partner MDH Partners, Ackerman is investing $85 million in its Lee + White project, an adaptive reuse redevelopment of the former “Warehouse Row” buildings in the historic West End neighborhood of Atlanta. Already home to popular breweries, a whiskey tasting room, a rock climbing gym, among other retailers and businesses, the partners are in the process of adding loft office space, a food hall, unique retail and a Great Lawn fronting the BeltLine.

“Our goal in continuing the redevelopment of Lee + White is to diversify this project beyond its popularity as an entertainment destination to serve the practical and daily needs of the community, as well as offer affordable business opportunities. New businesses and services coming to Lee + White include a family dental practice and Beya Salon Studios, which will open its newest flagship location at Lee + White, giving stylists and other salon professionals the opportunity to grow their businesses,” said Evan Ziegler, Senior Vice President of Investments for Ackerman.

“Lee + White’s container pop-up village will also open this year, providing small businesses high-visibility locations to sell their products at shorter-term lease commitments than traditional retail,” he added.

In addition, the project’s Great Lawn will be a gathering spot for the community, hosting a variety of events throughout the year.

Another adaptive reuse project Ackerman & Co. is involved in is Northlake, the transformation of the former mall northeast of Downtown Atlanta into a mixed-use project featuring offices, retail and restaurants. Ackerman Retail’s Kelly Wilson and Suzanne Shank are currently leading leasing efforts for the project’s restaurants and food stall spaces.

“With its 300,000 square feet of new medical office and office space, this redevelopment has attracted new offices for Emory Healthcare and CDC Credit Union that will bring 1,800-plus employees to the property,” said Suzanne. “For the restaurant spaces, we envision a mix of fast-casual restaurants, full-service eateries, chef-driven concepts, coffee shops and brewpubs. In revitalizing this property, this redevelopment is bringing new businesses and new retail and restaurant offerings that will benefit the surrounding community.”