April 29, 2016
Amy Wenk, Staff Writer Atlanta Business Chronicle
A new loft office project is in the works for Atlanta.
But this time, the project is planned for English Avenue, a neighborhood between Atlanta’s trendy Westside and downtown that’s seen little new development in recent years.
Atlanta developer John Ayers is planning to remake the former Hudgins & Co. Inc. salvage yard at 640 North Ave. NW.
The roughly 2.5-acre property today includes two existing warehouses that will be converted for loft office space. Future phases include building additional office buildings and possibly residential.
In total, the project could offer about 40,000 square feet of loft office space.
Ayers closed on the property last September and could deliver the first phase by early 2017. The project is set to go before Atlanta’s Zoning Review Board on May 12.
Richard Taylor of Taylor Architecture is designing the project. Mel Stowers of Stowers & Co. is the leasing agent. The hope is to lure technology companies, such as those coming out of Georgia Tech’s Advanced Technology Development Center (ATDC).
“I think it will be a great project for the neighborhood,” said Ayers, who’s worked on adaptive reuse projects in Atlanta since the 1990s, including Brushworks Lofts, Inman Schoolhouse Lofts, Candler Park Connection and LaFrance Street Lofts. “Once this development is done, I think the rest of it will come shortly behind.”
It could mark a turning point for English Avenue, a long-neglected area of Atlanta plagued by a lack of new investment and blight, including many vacant homes.
Big institutional players are starting to invest nearby.
MetLife Inc. just paid $63.4 million for the Northyards Business Park, which consists of 17 acres of former warehouses that have been converted into loft offices near Georgia Tech. The project is known for tenants such as The Coca-Cola Co.
Loft office rents are certainly growing across Atlanta. According to new data from Cushman & Wakefield, average asking rents for loft office soared to their highest level yet in the urban core — to more than $30 a square foot in first-quarter 2016. That’s up from $23.50 a square foot in first-quarter 2015.
Vacancy, too, is down — from 8.8 percent in first-quarter 2015 to 7.9 percent in first-quarter 2016.
Perhaps no project has better illustrated the demand for loft office space than Ponce City Market.
In the old Sears building, Atlanta developer Jamestown appears to have struck the right chord, especially among technology companies including athenahealth, Atlanta startup MailChimp and software firm Cardlytics.
Some early skeptics had believed the project was too far from the heart of Midtown at Peachtree and 14th streets. But today, office rents at Ponce City Market are pushing $40 a square foot, close to the same rates for office space in Buckhead, the city’s ritziest district.
Now, more loft office projects are popping up around Atlanta and even in more suburban areas such as Brookhaven and Chamblee.
Among them, Atlanta developer Third & Urban is underway on Armour Yards. The project is transforming a collection of warehouses into loft office space along Armour and Ottley drives and near Atlanta’s largest craft brewery, Sweetwater Brewing Co.
“We are very pleased with the interest we’ve seen so far,” said Pierce Lancaster, managing partner of Third & Urban, noting even traditional office tenants are taking tours. It’s not just creative or tech companies that are seeking out alternative space to the glass office towers of traffic-choked Buckhead and Midtown.
“We are seeing demand across the market,” Lancaster said. “It’s not just intown or in creative neighborhoods. We are feeling a more macro shift in the way people want to experience their work day.”