Real Estate Notes — ‘Times Square South’ proposed

Atlanta Business Chronicle – by Doug Sams

Date: Friday, October 21, 2011, 6:00am EDT

Two veteran Atlanta developers want to build a 350,000-square-foot office building in downtown’s Luckie Marietta district and make it part of a new “Times Square” environment.

Seven Oaks Co. and Legacy Property Group have formed a joint venture to develop the project, known as 285 Marietta. It would be geared to creative or high-tech companies with an influential Generation Y workforce.

A more specific target might be Atlanta-based Turner Broadcasting System Inc. The company has talked about expanding downtown for years, according to real estate observers.

It would be the first big downtown office project since developer Hal Barry completed Allen Plaza, turning a collection if vacant parking lots near Centennial Olympic Park into two office buildings, retail, hotel and condos.

“This is a contrarian play for traditional office, and really meant to appeal to those Gen Y companies and their young workforce,” said Seven Oaks founder Bob Voyles, one of the city’s wellknow developers going back to his days with Hines. “But, it’s also downtown, and every great city needs a healthy downtown.”

The project, designed by architect Cooper Carry, Inc., would include a video wall on its façade – meant to evoke the feel of Times Square. It aims to complement the existing entertainment attraction already drawing people to the distric, including Philips Arena, the Georgia Aquarium, World of Coke, CNN Center and coming attractions such as the College Football hall of Fame.

“We’re even calling this Times Square South,” Voyles said.

The project faces tall hurdles, as Atlanta’s job market is one of the slowest to rebound since the Great Recession ended. The metro area’s office vacancy rate is still north of 20 percent, and it is difficult enough to fill up existing buildings whose owners are asking $30 per square in rent. A new building would need to charge even higher rates. The era of spec-development is also over for now, so the majority of the project’s office component will need to be leased before any lender will consider a construction loan.

More than anything, though, 285 Marietta suggests some optimism about the city’s future has slipped back into the conversation. The development would not have been marketed a year ago.

The project would take some 24 months to complete, and by then its developers believe Atlanta’s job market will have recovered. “We are not a Pollyanna about the market,” Voyles said. “But we also know Atlanta has competed recently on office and facility assignments, and this project is geared to companies with younger employees who want to be in town. There is also no shortage of retail interest on this site, either.”

The most surprising characteristic of the project might be its location. Few would have pegged downtown as the site for a new office building.
Development basically shut down after the last Buckhead tower was finished a few years ago. Regent Partners LLC wants to create a mixed-use project with an office component on Peachtree Street near the Buckhead MARTA station, and Hines won the assignment to market a more than 400,000-square-foot proposed office building just outside the Perimeter.

Otherwise, most new development is apartments.

The project, however, is one of many in the downtown development pipeline.

The city of Atlanta is seeking options for its 19-acre Civic Center campus that might include redeveloping the site. Developer Jamestown and partner Green Street Properties hope to redevelop the massive Sears building on Ponce de Leon Avenue (City Hall East) into one of the most important project on the Atlanta Beltline.

Cousins Properties Inc. (NYSE:CUZ), meanwhile, will serve as master developer for the proposed Multi-Modal Passenger Terminal, a transit hub in an area between CNN Center and the Georgia Capitol known as “The Gulch.”

Part of the optimism about downtown revitalization stems from Mayor Kasim Reed, who pushed for such redevelopments as Jamestown’s Ponce City Market. Reed also wants to connect downtown’s most visited attractions with a proposed streetcar that will link the Martin Luther King Jr. Historic Site to Centennial Olympic Park.

“He has a lot to brag about even in these tough economic times,” Metro Chamber President Sam Williams said.

If successful, 285 Marietta can animate an increasingly popular part of downtown, adding class A office for businesses that want to locate in a vibrant entertainment district, said A.J. Robinson, president of Central Atlanta Progress, an influential group of downtown business leaders. The Luckie Marietta District also appeals to conventioneers and leisure travelers, said William Pate, president and CEO of the Atlanta Convention & Visitors Bureau.

The project would stand next to the 321-room Embassy Suites hotel, with a 70-room addition in the works.