Buckhead a study in contrasts: Mobility to improve as office market sags, construction slumps

By David Pendered

Buckhead provides an interesting glimpse into the mixed bag that is metro Atlanta’s commercial real estate industry, a vital piece of the region’s economy.

The Buckhead skyline. Credit: tinafountain.com

The Buckhead skyline. Credit: tinafountain.com

The good news is two major transportation projects should improve access measurably in a region where prestigious buildings are surrounded by traffic congestion. One project involves MARTA’s Buckhead Station, while the other addresses the interchange of Ga. 400 and I-85.

The not-so-good news is the office market continues to drag. Buckhead was one of the region’s five submarkets that lost tenancy in fourth quarter 2012, though Buckhead showed an overall gain in the year, according to the latest vacancy report from Cassidy Turley, a commercial real estate services provider.

The MARTA project is under construction after having been on community development plans going back almost 20 years.

In a nutshell, a pedestrian bridge is being built across Ga. at the north end of the Buckhead Station. The bridge will provide access to the transit station.

This sounds simple enough. But in reality, it will vastly improve the experience of airport travelers who want to ride transit to Buckhead and face a reasonable walk to their destination in a signature business address in the southeast.

Another simple-sounding project is the assemblage of new ramps to connect Ga. 400 and I-85.

The connection seems like a no-brainer, and the fact that it wasn’t built initially has made the state Transportation Department the butt of more than a few jokes.

But in reality, when Ga. 400 was getting the final go-ahead, the politics were such that it could flow traffic only to I-85 south, and accept traffic only from I-85 north.

The new assemblage will complete the plans for a more complete interchange between Ga. 400 and I-85.

Buckhead’s office market got a major boost when Carter’s, Inc., the children’s apparel company, signed a deal for almost 223,000 square feet in Phipps Tower. Terms reportedly include free rent until May 2015, followed by rental rates of $20 a foot and $21 foot, depending on the floor, according to a report in Lambert & Assoc., a CRE services firm.

The Carter deal alone accounted for more than a third of all the office space leased in the Buckhead submarket in all of 2012, according to the Cassidy Turley report. Average asking rent in Buckhead was $26.55 a foot, the highest in the region by a margin of 57 cents a foot over the Midtown sector, the report showed.

The difference between Carter’s negotiated rental price and the average asking price cited by Cassidy Turley is addressed up in this succinct observation from Cassidy Turley’s report:

  • “Average asking rents for office space continue to decline as landlords seek to attract tenants. “

This recession may be the first to buck the local lore that Buckhead leads the region out of economic malaise.

Just 100,000 square feet of office space is under construction in Buckhead, which is about 11 percent of the total office space being built in the region – 894,476 square feet – according to Cassidy Turley.

The biggest projects are mixed use, and involve properties that were started in the region’s last construction boom – Ponce City Market (the former City Hall East in an old Sears building); and OliverMcMillan’s Buckhead Atlanta (formerly Streets of Buckhead).

 

About David Pendered

David Pendered, Managing Editor, is an Atlanta journalist with nearly 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow. David was born in Pennsylvania, grew up in North Carolina and is married to a fifth-generation Atlantan.
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8 comments
The Last Democrat in Georgia
The Last Democrat in Georgia

Other than the mistakes that were made with constructing the Georgia 400 Extension above-ground instead of below-ground, not completing the Georgia 400/I-85 interchange, not reconstructing the Georgia 400/I-285 interchange and promising to take the tolls off of Georgia 400 in an era of diminishing road maintenance budgets, the Georgia 400 Extension (and even the accompanying MARTA heavy rail line) has been a definite boon for the commercial side of Buckhead.

 

Buckhead was already a hot market, but after the opening of the Georgia 400 Extension provided direct access to much of the rest of the Interstate system and the Metro Atlanta region (including Downtown, the Airport, the Dunwoody/Perimeter area, North Fulton/Forsyth, etc), the Buckhead market really took off. 

The Last Democrat in Georgia
The Last Democrat in Georgia

Other than the mistakes that were made with constructing the Georgia 400 Extension above-ground instead of below-ground, not completing the Georgia 400/I-85 interchange, not reconstructing the Georgia 400/I-285 interchange and promising to take the tolls off of Georgia 400 in an era of diminishing road maintenance budgets, the Georgia 400 Extension (and even the accompanying MARTA heavy rail line) has been a definite boon for the commercial side of Buckhead.   Buckhead was already a hot market, but after the opening of the Georgia 400 Extension provided direct access to much of the rest of the Interstate system and the Metro Atlanta region (including Downtown, the Airport, the Dunwoody/Perimeter area, North Fulton/Forsyth, etc), the Buckhead market really took off.

The Last Democrat in Georgia
The Last Democrat in Georgia

Another "observation" is that the State of Georgia should have never promised to remove the toll from the Georgia 400 Extension once the bonds for the construction of the road were paid off in 2011.

 

The State of Georgia should have been straightforward with the people of Georgia and Metro Atlanta about the need to retain the toll on the road even after the bonds financing construction were paid off so that Georgia 400 would be able to continue to pay for its own maintenance and existence in an era of continuously shrinking road maintenance revenue from decreasingly effective state motor fuel taxes.

 

The state had to fund the Georgia 400 Extension project with tolls because revenues from the motor fuel taxes weren't enough to finance the construction of the road THEN, back nearly 25 years ago during the then-unparalled boom times of the late-1980's Reagan era.

 

If there wasn't enough motor fuel tax revenue to finance new road construction THEN, just what in the hell did they think would happen moving forward as the population would continue to grow exponentially at the time and fuel efficiency would continue to increase?

Did the state think that they would suddenly be flush with cash in 20-25 years time despite all the overwhelming evidence to the contrary through the years of massive growth of Metro Atlanta up through that time.

Talk about your BONEHEADED decisions...

 

Just what in the hell was the State of Georgia thinking?  Both with destroying and leveling parts of one of the most prestigious neighborhoods in the state to build a new expressway and by promising to end the tolls in an era when they were having increasing difficulty maintaining the roads they already had with the diminishing returns from motor fuel taxes?

The Last Democrat in Georgia
The Last Democrat in Georgia

Another "observation" is that the State of Georgia should have never promised to remove the toll from the Georgia 400 Extension once the bonds for the construction of the road were paid off in 2011.   The State of Georgia should have been straightforward with the people of Georgia and Metro Atlanta about the need to retain the toll on the road even after the bonds financing construction were paid off so that Georgia 400 would be able to continue to pay for its own maintenance and existence in an era of continuously shrinking road maintenance revenue from decreasingly effective state motor fuel taxes.   The state had to fund the Georgia 400 Extension project with tolls because revenues from the motor fuel taxes weren't enough to finance the construction of the road THEN, back nearly 25 years ago during the then-unparalled boom times of the late-1980's Reagan era.   If there wasn't enough motor fuel tax revenue to finance new road construction THEN, just what in the hell did they think would happen moving forward as the population would continue to grow exponentially at the time and fuel efficiency would continue to increase? Did the state think that they would suddenly be flush with cash in 20-25 years time despite all the overwhelming evidence to the contrary through the years of massive growth of Metro Atlanta up through that time. Talk about your BONEHEADED decisions...   Just what in the hell was the State of Georgia thinking?  Both with destroying and leveling parts of one of the most prestigious neighborhoods in the state to build a new expressway and by promising to end the tolls in an era when they were having increasing difficulty maintaining the roads they already had with the diminishing returns from motor fuel taxes?

The Last Democrat in Georgia
The Last Democrat in Georgia

Not only should the ramps that are now being built to connect Georgia 400 Southbound and I-85 Northbound and I-85 SB and Georgia 400 NB have been built when the Georgia 400 Extension was being built in the early 1990's, but the entire Georgia 400 Extension should have been tunneled underground for nearly its entire length between I-85 and the Georgia 400/I-285 interchange, whose still-pending and long-overdue reconstruction also should have completed when the Georgia 400 Extension was initially constructed and completed in the early 90's.

 

If neighborhoods of much less means and affluence should not be destroyed and leveled for new freeway construction then there is no way that a neighborhood of the affluence and importance to the social fabric of the city such as Buckhead should have been destroyed and leveled for the construction of a toll road/expressway.

 

Tunneling the Georgia 400 Extension and the accompanying MARTA heavy rail line would have cost more, but it would have left one of the city's absolute most important neighborhoods completely intact physically and socially.

 

It is the upheaval that the construction of the Georgia 400 Extension caused to what is arguably the city's toniest neighborhood in Buckhead/North Atlanta that has made it completely impossible to build any more new expressways anywhere else in the Metro Atlanta region. 

 

It is this extremely short-sighted and half-assed "we'll-comeback-and-fix-it-no-sooner-than-20-years-later-because-we-were-in-a-hurry-to-get-our-roadbuilding-cronies-a-quick-paycheck-at-the-time" piecemeal approach to transportation planning that is killing this town right now.

The Last Democrat in Georgia
The Last Democrat in Georgia

Not only should the ramps that are now being built to connect Georgia 400 Southbound and I-85 Northbound and I-85 SB and Georgia 400 NB have been built when the Georgia 400 Extension was being built in the early 1990's, but the entire Georgia 400 Extension should have been tunneled underground for nearly its entire length between I-85 and the Georgia 400/I-285 interchange, whose still-pending and long-overdue reconstruction also should have completed when the Georgia 400 Extension was initially constructed and completed in the early 90's.   If neighborhoods of much less means and affluence should not be destroyed and leveled for new freeway construction then there is no way that a neighborhood of the affluence and importance to the social fabric of the city such as Buckhead should have been destroyed and leveled for the construction of a toll road/expressway.   Tunneling the Georgia 400 Extension and the accompanying MARTA heavy rail line would have cost more, but it would have left one of the city's absolute most important neighborhoods completely intact physically and socially.   It is the upheaval that the construction of the Georgia 400 Extension caused to what is arguably the city's toniest neighborhood in Buckhead/North Atlanta that has made it completely impossible to build any more new expressways anywhere else in the Metro Atlanta region.    It is this extremely short-sighted and half-assed "we'll-comeback-and-fix-it-no-sooner-than-20-years-later-because-we-were-in-a-hurry-to-get-our-roadbuilding-cronies-a-quick-paycheck-at-the-time" piecemeal approach to transportation planning that is killing this town right now.

The Last Democrat in Georgia
The Last Democrat in Georgia

{{"It is the upheaval that the construction of the Georgia 400 Extension caused to what is arguably the city's toniest neighborhood in Buckhead/North Atlanta that has made it completely impossible to build any more new expressways anywhere else in the Metro Atlanta region."}}

 

New expressways (or even new surface roadway lane mileage) like your Outer Perimeter, your Northern Arc, your T-SPLOST that went down in flames this past summer, etc (a T-SPLOST that included an entry for funding of the construction of a new expressway in part of the leftover right-of-way of the abandoned Northern Arc).

 

People in or near the path of these proposed highways look at the needless destruction that was caused by the construction of Georgia 400 directly through one of the most-affluent neighborhoods in the region and don't think twice about deciding that they don't want that type of destruction to come to their communities, not-to-mention the excessive noise and overdevelopment that will undoubtedly come with it.  

The Last Democrat in Georgia
The Last Democrat in Georgia

{{"It is the upheaval that the construction of the Georgia 400 Extension caused to what is arguably the city's toniest neighborhood in Buckhead/North Atlanta that has made it completely impossible to build any more new expressways anywhere else in the Metro Atlanta region."}}   New expressways (or even new surface roadway lane mileage) like your Outer Perimeter, your Northern Arc, your T-SPLOST that went down in flames this past summer, etc (a T-SPLOST that included an entry for funding of the construction of a new expressway in part of the leftover right-of-way of the abandoned Northern Arc).   People in or near the path of these proposed highways look at the needless destruction that was caused by the construction of Georgia 400 directly through one of the most-affluent neighborhoods in the region and don't think twice about deciding that they don't want that type of destruction to come to their communities, not-to-mention the excessive noise and overdevelopment that will undoubtedly come with it.