Here's a little Christmas gift for you readers out there -- some good news that things are perking up in the icebox that has been Atlanta's commercial real estate market.
Last week we received news of a new residential tower going vertical in Midtown.
Atlanta's own Novare Group is partnering with a Boston-based developer to build Skyhouse, a 23-story, high- rise apartment building. Novare Group is of course known for its prolific construction of high-rise condo towers before the Great Recession.
We're not sure how Novare survived the financial markets collapse and the (partially self-created) condo glut in Atlanta (racy photos of bank executive spouses??), but with the dearth of vertical development in Atlanta's urban core over the past couple of years we're hoping their project will be a great shot in the arm.
The shift by Novare from condos to apartments is notable. Apartments and multi-family housing has been one of the few bright spots in the market over the past few years, and this project is an attempt to capture the trend of higher rent rates. Their ability to procure significant financing for the project suggests confidence in the lending community of the trend to continue. This is such positive news for the industry and for Atlanta we'll ignore that the building name sounds like it was lifted from the Jetsons.
Moving up Peachtree Street a few miles and into the office market, there are signs that the over-saturated Buckhead office market may be reviving. Occupancy rates are pushing up and the wasteland of high-end office space around Phipps Plaza is slowly filling. There is even talk of pre-development of a new tower.
Projects going vertical, banks lending, buildings filling up -- all this great news led one tenant broker to remark that "Capitalism is winning." While we don't know what other subversive economic theories may have been in play in Buckhead over the past years, there is no question this is all positive news.
Before folks start popping corks and declaring the Champagne Era returned, there is still a glut of condos and office space in Atlanta that will still take some time to burn through. As we build out of this low, hopefully the response by developers and lenders is a more measured approached this time around
In the meantime, if you take a little nip and cheer the return of Atlanta's real estate market, we won't tell anyone. Happy Holidays.