Category: Commercial Real Estate

Demand for industrial space stays strong amid economic uncertainty

Nov30
2022
Posted by
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. Construction is nearing completion on both buildings, and 150,000 SF Building 100 is under construction.

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

Oct6
2022
Posted by
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

Aug15
2022
Posted by
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.

May27
2022
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

May18
2022
Posted by
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

Mar3
2022
Posted by
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.”

 

Wide Array of Lease Signings at Crabapple Market Pave the Way for Big Year of Restaurant and Retail Openings

Feb16
2022
Posted by
Marketing Staff

New additions at the Milton, Ga. mixed-use destination will range from barbecue and sushi restaurants to a gourmet market and brewery. 

This is shaping up to be a milestone year for Crabapple Market, the live-work-play destination in Milton Ga., in North Metro Atlanta.

Since its opening, the mixed-use development has been consistently growing its roster of office, retail and restaurant tenants. With construction now complete on a major expansion, Crabapple Market is getting ready for its busiest year of restaurant and retail openings.

More than a typical shopping destination, Crabapple Market is creating a new downtown “Main Street” environment, with a pedestrian-friendly streetscape lined with buildings featuring brick façade detailing and floor-to-ceiling arched windows. There is also The Green – a park-like gathering space for the community – as well as a stage for concerts, movies and theatrical performances.

As construction was buzzing throughout the past year, project leasing representatives Courtney Brumbelow and Haley Hartman of Ackerman Retail were busy completing numerous restaurant and retail leases that filled up all but one of the restaurant spaces in the expanded project.

So, what’s coming in 2022?

The restaurant openings will include:

DUA Vietnamese – An authentic Vietnamese restaurant specializing in Pho and noodle soups, as well as rice and egg-noodle dishes. Crabapple Market will be its fifth metro Atlanta location.

Roll On In Sushi Burritos & Bowls – Opening its second metro Atlanta location at Crabapple, the restaurant serves sushi burritos, tacos, bowls and donuts.

Spiced Right Ribhouse – An “old-school and authentic” Georgia barbecue restaurant offering ribs, pulled pork, chicken, brisket and smoked turkey BBQ meals, as well as BBQ tacos, sandwiches and salads. The restaurant also operates a Roswell location.

Six Bridges Brewing – A second location of the family-owned brewery, with a taproom, games and sports on multiple TVs.

Nest Café
– Marking the second location of the eatery, Nest Café offers breakfast, brunch and lunch in a laidback coffeehouse setting.

Buzzed Bull Creamery – Handcrafted ice creams and milkshakes, including alcohol-infused options. Buzzed Bull Creamery is also planning to open several other metro Atlanta locations.

Alumni Cookie Dough – Serving cookie dough by the scoop, with special items including cookie dough sundaes, milkshakes, pretzel bites and snickerdoodle bites. There is also a Marietta location.

“With the new restaurants, along with the growing retail lineup and the community-focused amenities, Crabapple Market is a place where visitors can enjoy everything from breakfast at a café in the morning, to a great lunch or dinner with family or friends, craft beers after work and community events at The Green,” said Courtney.

New additions to the retail lineup include:

Savi Provisions – A market specializing in gourmet and organic foods, wines and spirits.

Evimero Marketplace – Featuring artisan-made gifts and home goods.

Kitchens By Design Firm – Offering a range of kitchen and other installations, including cabinets, bathroom vanities, bookcases, entertainment centers and more.

Loveday Place – Curated by artist Donna Loveday, the artisan market concept features locally crafted artwork.

Dinna Eckstein Designs – The Store (Now Open) – Provides innovative home furnishings and accessories.

Prescott Design – A full-service interior design studio offering services for home remodeling and ground-up construction.

The expansion of Crabapple Market added 11 new buildings ranging from one to three stories. In addition to the diverse mix of restaurants and retailers, Crabapple Market also features Class A offices and luxury residences.

Oct12
2021
Posted by
Marketing Staff
After Initial Pandemic-Induced Challenges, Outlook Is Healthy for Medical Office Sector

During the initial months of the pandemic, the medical sector faced its fair share of challenges.

Job losses were on the rise, as some medical practices were forced to shut down temporarily. In all, there were 1.4 million healthcare services industry jobs cut in the first two months of the pandemic.

Vacancies also rose, peaking at nearly 9% nationwide.

But the sector recovered quickly – and at a much faster rate than traditional office – and long-term trends are on a healthy trajectory.

According to CoStar, nationwide vacancy rates in the medical sector are near decade-long lows, while the construction pipeline is extremely limited (less than 1% of total inventory). Healthcare trends are also favorable. Demand for services is picking up as patients schedule elective office visits and procedures that were postponed during the height of the pandemic. In the long-term, the aging of the U.S. population will drive demand for services that will, in turn, boost the need for medical space.

Kevin Ehringer, Vice President for Ackerman Medical in charge of leasing Ackerman & Co.’s portfolio of medical office properties in metro Atlanta, said he has been seeing robust demand for space, particularly in recent months.

“At the outset, healthcare practices were dealing with various issues caused by the pandemic or had to shut down temporarily – dermatology, ophthalmology, dentistry to name a few,” Kevin said. “Things are pretty much back to normal now. Primary care and specialty practices are going gangbusters.”

The heightened demand for space is reflected in recent statistics. According to CoStar, medical office space leased monthly has surpassed the five-year average for the past six months.

Ackerman is seeing solid demand for its medical office availabilities. The company, which has developed and acquired more 3.5 million square feet of medical office space since its inception, has been consistently completing leases with physicians and healthcare practices.

Recent leases Kevin has completed for Ackerman Medical include a 7,669-square-foot lease with Schilling Cosmetic Surgery & Aesthetics at 1050 Eagles Landing Parkway, a 3,320-square-foot lease with Avail Dermatology/Epiphany Dermatology at Prestige Park and 1,452-square-foot lease with Regenerative Spine & Pain Specialists at Prestige Park. Some of his major lease renewals include a 9,057-square-foot deal with Georgia Urology at Marietta Medical Center.

Although demand is strong, Kevin pointed out that snowball effects brought about by the lingering pandemic have led to one increasingly common criteria among tenants seeking space.

“Medical practices want built-out, turn-key space, rather than shell space that needs to be planned, engineered and constructed,” he said.

The increasing costs of construction materials, access to those materials and labor shortages, along with  delays in permitting, inspections and other municipal approvals are some of the issues tenants can avoid by moving into turn-key space.

The type of build-out space tenants are seeking are currently available at several Ackerman & Co. medical office properties, including the 58,317-square-foot 1050 Eagles Landing, 41,450-square-foot Prestige Park, 98,534-square foot Marietta Medical Center and at Perimeter Town Center, an Ackerman redevelopment.

While the ongoing pandemic and current economic uncertainty are creating challenges for all commercial real estate sectors, the medical sector is proving to be resilient and is expected to benefit from healthy long-term growth prospects.

Aug30
2021
Posted by
Marketing Staff

Braselton Crossroads industrial park provides direct access to I-85, a corridor connecting Atlanta submarkets & Southeast economic hubs.

Some of the highest performing industrial submarkets in metro Atlanta straddle Interstate 85, one of the busiest transportation corridors in the U.S. The ability to conveniently access fast-growing consumer markets in Atlanta and beyond has made the I-85 corridor an increasingly important location for distribution and logistics.

Ackerman & Co. has long recognized the strategic advantages of this corridor and has extensive experience developing and acquiring distribution centers along I-85 in Northeast Atlanta. The company constructed a 1 MSF speculative distribution center leased to and later purchased by Uline Inc., one of the country’s top business supply companies. Located in Braselton, Ga., the facility has become the consolidated hub for the company’s Southeast distribution operations and benefits from convenient access to two nearby I-85 interchanges.

As Ackerman & Co. strives to meet the growing demand for industrial space along the corridor, the company continues to pursue development of new Class A facilities.

Ackerman & Co.’s latest project in this area is Braselton Crossroads, positioned on a 65-acre site providing direct access to I-85. Ackerman plans to begin construction later this year on three facilities totaling nearly 500,000 SF: 161,000-SF Building 200, 150,000 SF Building 300 and 150,000-SF Building 400.

The Class A facilities will feature clear heights up to 32 feet, six-inch ProSlab concrete floors, white TPO roofing, abundant auto parking and truck loading bays.

“The I-85 corridor is a much sought-after location for retailers, distributors and manufacturers thanks to its strong population and economic growth,” said Brett Buckner, Senior Vice President in Ackerman & Co.’s Industrial Services Group. He’s teaming with VP Chris Miller to lease the space. “Braselton Crossroads provides a strategic location and will offer the most modern design features for today’s high-efficiency distribution operations.”

The neighboring Duluth/Suwanee/Buford industrial submarket has a lengthy stretch of I-85 access. Ackerman’s new project is located in the far northwest corner of the South Bartow submarket in the only section offering direct I-85 access, making it a highly desirable distribution location.

Demand for industrial space along I-85 in metro Atlanta is only expected to rise in the future. In fact, the portion of the I-85 corridor stretching from Atlanta to the North Carolina-Virginia border is increasingly recognized as an economic powerhouse.

“With strong demographic growth, locational and infrastructure advantages and pro-growth government entities, the corridor is primed to emerge as a ‘megaregion’ over the next several years,” according to a recent CoStar analysis. This stretch of I-85 already has a nickname – “Charlanta” for its two biggest cities, Atlanta and Charlotte. I-95.

Economic activity in Georgia, North Carolina and South Carolina is largely concentrated along I-85, with the 33 counties in this corridor accounting for $543.5 billion in gross regional product (GRP), or 43% of the GRP in the three states, according to CoStar.

Along I-85 and across metro Atlanta, demand is booming for well-located distribution, e-commerce and manufacturing space. The 29.1 million square feet of space absorbed in the past year in Atlanta is second- highest in the nation, behind only Dallas-Fort Worth.

The Class A facilities at Braselton Crossroads are expected to be completed by the end of 2022. In addition to leasing space at Braselton Crossroads, Brett Buckner and Chris Miller are also leading leasing efforts at two sites Ackerman & Co. has retained at the Class A Rockdale Technology Center in the I-20 East industrial submarket. Build-to-suit and pre-lease opportunities are now available.

Seeking industrial space? Contact Brett at bbuckner@ackermanco.net or Chris at cmiller@ackermanco.net

CRE Experts Agree Enhanced Amenities Will Be Crucial for Attracting Office Tenants In Post-Covid Landscape

Jul2
2021
Posted by
Marketing Staff

 

Atlanta’s appeal as a destination for corporate relocations is helping to boost its economy and fill office space in locations ranging from Midtown Atlanta to the suburbs. Despite these large corporate move-ins, the office market in metro Atlanta has been showing signs of demand softening – with vacancies up by 2.7% over the past 12 months – as the market continues to grapple with the lingering impacts of the COVID-19 pandemic.

What will it take to keep and attract new tenants in today’s evolving office market?

This challenge was a big topic of discussion at Atlanta Bisnow’s “What’s Driving Atlanta CRE?” event held at the new 712 West Peachtree tower in Midtown Atlanta. Representatives from four Atlanta commercial real estate firms offered their perspectives on the latest CRE trends, with an in-depth discussion on the office sector.

Taylor Smith, Southeast Regional Director for Rubenstein Partners, said COVID-19 impacts have accentuated trends that were already taking shape.

“You can look at COVID as an accelerant,” he said. At a time when more space users are experimenting with hybrid in-office and remote working options for their employees, his team has arrived at a clear conclusion.

“I think the one thing that will stick is a concentration on amenities,” he said.

Cousins Properties EVP Kennedy Hicks agreed. “I’m not convinced that the new normal looks much different than where we were heading pre-Covid. This has given everybody time to reflect on the office space needs for their company.”

She added: “You’ve got to make the environment something where people want to come to work. Companies will continue to focus on using their office space to provide the amenities, the lifestyle and the conveniences employees want.”

These conveniences and amenities can increasingly be found at mixed-use developments offering a variety of both indoor and outdoor amenities.

Ackerman & Co. SVP Steve Langford told the audience about two Atlanta projects that are representative of this trend.

Lee + White, a 433,000-square-foot adaptive re-use development in the West End of Atlanta co-owned by Ackerman and MDH Partners, is home to popular breweries, distilleries, food manufacturers and retailers. In the next phase of the redevelopment now underway, the investment partners are adding 150,000 square feet of creative loft office space that has already attracted a new HQ location for an innovative nanotechnology company.

A major draw for office tenants is the project’s diverse mix amenities, including ½ mile of direct Atlanta BeltLine access and an abundance of outdoor patio and green spaces. The current phase of the development will add more amenities, including a food hall and a great lawn for events and community gatherings.

There is also Six West, a planned $1-billion mixed-use project in the shadow of Hartsfield-Jackson Atlanta International Airport. Steve Langford is the exclusive land broker for the project, designed to be a 24/7 work-live-play destination incorporating Class A office, stores and boutiques, hotels, restaurants, and single-family and multifamily residential.

Langford said the project’s location at the doorstep of the world’s busiest airport combined with the varied amenities – which also include the nearby College Park MARTA rail station and a recreational trail circling the project – should help Six West stand out in its efforts to attract national and international HQ operations.

Taylor Smith pointed to Alpharetta’s Sanctuary Park office complex as another development that has added an array of amenities. A multimillion-dollar capital improvement initiative went into opening the Clubhouse, which offers tenants a food hall, athletic club and training facility. A newly added perk is a micro-mobility program offering tenants e-scooters, e-bikes and traditional bikes to navigate throughout the campus. The property also offers two miles of walking and jogging trails.

‘Firing On All Cylinders’
Since the ‘What’s Driving CRE?” event was held in Midtown in the fast-growing Tech Square corridor, it was only natural that the panelists discussed the emergence of Midtown Atlanta as an increasingly important tech hub benefitting from the resources and talent of Georgia Tech.

High-profile space commitments in Midtown include Google leasing 500,000 square feet at 1105 West Peachtree Street and Microsoft occupying 523,000 square feet at Atlantic Yards, with future plans also calling for the software and technology giant to establish an East Coast headquarters campus at Quarry Yards on the West Side.

While these and other relocations to Midtown including MailChimp’s 300,000 square foot expanded headquarters in the nearby Old Fourth Ward neighborhood are impressive, the Atlanta metro area as a whole is benefitting from high-profile corporate relocations.

“Atlanta is firing on all cylinders,” said Kennedy Hicks. “It’s not just Midtown. Companies will gravitate toward amenities and mixed-use development, and you can find those in Alpharetta at Avalon, in Buckhead [among other submarkets].”

Steve Langford said the influx of corporate relocations is influenced in part by the COVID-19 crisis, which spurred organizations to investigate lower-cost locations for their business operations. “When Covid hit, a number of businesses, particularly in the Northeast, started looking at the Sunbelt markets, especially Atlanta,” Langford said.

He added: “Atlanta really stood out. We’re fortunate that Atlanta has an increasingly diversified economy. This will really bode well for Atlanta going forward.”

While Atlanta’s CRE sector faces similar challenges to other markets across the country, the panel agreed that the metro area’s advantages, including its lower business costs compared to gateway markets, place it in a healthy position to continue thriving.