Crane Watch: Summer-ish 2023 edition
Metro Atlanta's major real estate dealings for the summer-ish 2023
Welcome to my newsletter by me, King Williams. A documentary filmmaker, journalist, podcast host, and author based in Atlanta, Georgia. This is a newsletter covering the hidden connections of Atlanta and everything else.
I took a hiatus.
Hey everyone, I took a summer break to refuel and refocus. I’m back, and I hope you enjoy what I have in store for this fall!
-KJW
Noteworthy Q2/Q3 2023 metro Atlanta real estate news
ITP real estate news
Data company QTS withdrew a 45 million dollar tax break request.
Buckhead’s Black descendants hope to preserve a cemetery slated to become condos. As of June, the project was slated to be preserved.
Five Points MARTA station's proposed revamp has been ruffling feathers.
Twitter (now named ‘X’) vacated its Ponce City Market office after owing Jamestown $1 million in back rent.
The Interlock on Howell Mill was sold for a discounted price.
A new 42-story tower has been proposed for Peachtree and Crescent Avenue.
Construction for a 30-story office tower behind the Margret Mitchell House will begin in 2024.
A domestic violence allegation forced one Atlanta real estate mogul to sell his portfolio of Atlanta apartments.
The historic Artmore Hotel isn’t being demolished.
The West End Mall redevelopment isn’t going to plan.
According to a recent report, Black families in Fulton County have been hit the hardest by property taxes.
The city of Atlanta has developed a new Housing Help Center.
A 20-story timber tower has been approved for Buckhead.
A 1960s West End laundromat is looking for a developer to reimagine the space.
A new 140-acre mixed-use town center in Forsyth County, dubbed Coal Mountain, is scheduled to break ground.
Pre-leasing has begun at the new apartments next to Ponce City Market.
Ponce City Market’s new all-timber loft building is making progress.
The city of Atlanta and Atlanta Housing have announced their plans for a newly renovated Roosevelt Hall at the former University Homes, the first federally funded housing project for African Americans in the US.
A historic 1931 Midtown apartment building has completed its renovation.
OTP real estate news
A 14,000-acre nature preserve is likely up for development after a deal hasn’t been reached.
State lawmakers convened on whether to overhaul Certificates of Need regarding permitting new hospital construction, buildings, and services. Nothing has happened. Expect a move in the 2024 legislative session.
The newly formed city of Mableton will have no millage rate this year.
Cobb’s school superintendent was concerned about the growth in new apartments.
A new $750m factory is slated to be built in Georgia.
Hyundai is building another battery plant in Georgia.
The University of Tennessee and the Tennesee Titans cite The Battery Atlanta as successful cases for stadium entertainment districts.
Top real estate news—Summer 2023
1. Newport pulls out of South Downtown
German developer Newport shocked many after it was announced the company would pull out of South Downtown after seven years. The deal managed to ship the entire 53-building portfolio, including its plus 6 acres of downtown surface parking lots, to one buyer, local developer Braden Fellman.
The deal would see one of the largest real estate transactions by property volume in metro Atlanta since the Gulch Deal 5 years ago. In that deal, the Gulch, now named Centennial Yards, is the anchor for a new multi-billion dollar mini-city development. That development is the anchor for the Atlanta Hawks ownership group, hoping to become an LA Live 2.0.
Led by the Ressler brothers, Tony and Richard of Los Angeles. Tony Ressler owns the Hawks, while Richard Ressler co-founded CIM, the California-based real estate firm leading the Centennial Yards project. The idea of Centennial Yards, a mixed-used entertainment center, is reminiscent of another project that revitalized and ushered in the redevelopment of downtown LA, the Staples Center, in the late 90s and early 2000s.
From my previous newsletter: The Hawks need Trae Young to be LeBron James to sell a $5 billion dollar real estate development - 8/13/2021
Centennial Yards as LA Live 2.0
Traveling fans to Los Angeles see the Lakers but they also pay even more money to eat, shop or stay in LA Live, the entertainment district directly outside of The Staples Center where the team plays. The Hawks and the California-based CIM group are taking that same downtown sports-as-economic revitalization playbook in the development of Centennial Yards.
Can downtown Atlanta, in particular, South Downtown, make it?
According to the Atlanta Business Chronicle, Newport is selling the properties at a loss. What Braden Fellman gets in this deal is a series of early-stage renovations and heavy-duty development of key properties done for dimes on the dollar. And now, Braden Fellman can add a contiguous, 10-block, 53-unit real estate crown jewel to add to their portfolio. But with some issues.
Despite the rumored $155m already spent, Newport’s 10-year plan is mostly now up in smoke. But for Braden Fellman, a pivot, whatever that is, is likely to occur. The good news is that Braden Fellman has experience in historic Atlanta residential and commercial renovations. Where they go from here is speculative, but expect a heavier emphasis on rentals and owner-owned condo conversion from some projects. As Newport’s initial focus relied on a heavy mixed-use of office-hotel-restaurant-retail, expect more residential-restaurant-retail to use the already in-renovation properties.
What about the other projects?
While other nearby projects, such as the renovation of the Norfolk Southern Building, Centennial Yards, and the renovation of Underground Atlanta, are still ongoing, a larger question remains…is there a plan to make downtown Atlanta viable? Hundreds of millions of dollars in investment have already been laid, but the attitude amongst locals seems to be either moot or nonexistent. It’s not to say the area is doa, but there seems to be a lack of a unified PR strategy on all of the developments in the area.
The 2026 World Cup is coming, and the need for focusing efforts on revitalizing Atlanta’s downtown could be refocusing around that as a lynchpin for an expedited turnaround. But outside of the immediate needs of Centennial Yards to be camera-ready, MARTA’s the only organization seemingly thinking in the future even if those funds could be used elsewhere.
2. Portman is scaling back its development on Ponce
Portman Properties has announced they are scaling back their plans for an ambitious development in Ponce De Leon. The site is located at one of the most valuable parcels in Atlanta. Portman purchased the site on the Atlanta Beltline across from Ponce City Market, 725 Ponce, and the redeveloped Murder Kroger (now dubbed Beltline Kroger).
Also from my previous newsletter: RIP Star Bar, new Phipps Plaza, even ClayCo maybe? + other real estate news — 9/27/2022
The move by Portman signals further corporatization of one of the most valuable spaces within the city. For those in commercial real estate, it signals the maturing of the market, for those who seek better social experiences and nightlife, it seems like the continued death of Atlanta.
The market on Ponce seems to be slowing down (for now)
For some Atlantans, the prospect of keeping local dive bars, including beloved The Local, is a welcomed change. Last fall saw an outpouring of social media and irl criticisms over the encroachment of the development onto one of the last spaces for nightlife in the city.
From my previous newsletter: Crane Watch: February 2023 — 2/22/23
This site was the ire of controversy last fall as many of the third spaces of the area including restaurants, nightclubs, bars, and eateries would be done away for another mixed-use, retail-office + apartments project. The developer has not stated the retail or likely restaurant/beverage mix will be, but it’s likely to be national chains, echoing a continued trend of new developments across the city eschewing local businesses.
Whether or not this signals a market change or a sign of changing priorities for Portman Properties will be realized over the ensuing months. Several large projects are still coming online in the coming year on Ponce and nearby O4W. How those projects do will truly signal if a cool down is happening in the major corridors of Atlanta real estate.
3. NCR’s headquarters is putting its entire office up for lease
NCR, the tech and payment processing company best known for creating the cash register, is putting up its entire Midtown office tower for lease. The move comes as the pandemic, work-from-home jobs, and a softening market are causing the company to find new sources of use for its tower.
The cost and keep NCR, $100m +
NCR is noteworthy for the amount of tax breaks the state of Georgia and the city of Atlanta have given the company.
NCR was founded in 1884 and headquartered in Dayton, Ohio. The company remained anchored in Ohio until its surprising 2009 announcement that it would relocate to Duluth, Georgia, a suburban enclave 45 minutes outside the Atlanta city limits. A move touted by the state as bringing over 1,200 high-paying jobs to Georgia. It was actually around 700.
The initial cost to sway NCR from its home state of Ohio was estimated at $60 million but totaled $96 million. Despite being in Duluth for less than a decade, a more competitive package in Midtown Atlanta emerged by 2015. The following year, the company announced a move to Midtown Atlanta.
NCR’s move highlighted the growth of the Midtown marketplace, including Tech Square, Georgia Tech’s biz-tech enclave, and the number of firms, including Google, relocating to Midtown.
This was followed by the city of Atlanta via Invest Atlanta, giving an estimated $45 million in tax breaks. The company received $12.6 million in tax credits in 2015, followed by another $.7.7 million in 2016, with some estimates that over $45 million in breaks were given to the company. On top of a whopping $314 million city bond deal to build and equip the midtown office tower and adorning tech campus.
NCR is splitting into two companies. This could mean a shakeup in the market.
NCR is expected to split its company into two separate entities. One entity will focus on the company’s ATM and hardware business, while the other will focus on software. This brings forth an immediate concern for maintaining current office space and/or whether or not one or both companies leave.
Attempting to sublease an entire office tower is an immediate attempt at producing cash flow, keeping the midtown building occupied and flexible in case one or both companies decide to downsize and/or move out.
More Fortune 1000 firms are listing their offices for sublease.
McKinsey, Serta Simmons, IBM, Novelis, and Anthem are all leasing thousands of square feet of office space in metro Atlanta. Add the historic Portman Towers at Peachtree Center and its pandemic and post-pandemic vacancies issues. The growing rate of available office space is accelerating at a time when the city will need more property and sales tax revenues to meet its growing budget. Considering the city’s loftier goals, such as affordable housing initiatives, police spending, and youth programs.
4. No developers have stepped up for the Garnett Street MARTA station development
Unsurprisingly, no one has stepped up as a development partner for Garnett Street MARTA station’s potential redevelopment.
Garnett Street Station resides in one of the last remaining major underdeveloped areas of south downtown. Several large surface parking lots surround it, including the reopened Atlanta city jail, bail bonds businesses, an in-development Greyhound bus terminal next door to a factory turned office conversion and local favorite, the chicken wing establishment, Magic City.
Invest Atlanta sent an RFP on the Garnett Street Station earlier this year, but no development partner is still interested. Garnett Street Station represents the largest shovel-ready parcels in Atlanta but faces several challenges. In addition to several large surface parking lots, with large holdouts by the parent companies, the area is a residential and commercial ghost town.
5. Forest Cove’s redevelopment is still TBD
Developer Millenia is still fighting with the city of Atlanta over whether or not to rehab or demolish Forest Cove Apartments. The debate on whether or not the site of the Forest Cove apartments can be demolished continues as the developer is challenging a recent court ruling. Millenia is looking to demolish the entire facility for new development, while the city is looking to see Millenia renovated and have the former residents return.
Forest Cove residents were aided by funds from the city and Mayor Dickens himself in 2022. The one-year vouchers used for residents who relocated are quickly reaching an expiration date. The city could fund the effort again, but not without a concrete agreement with Millenia. This has been complicated as HUD, the national US housing organization, is stopping its support of Millenia on the project. A project is also being anchored for a potential redevelopment of the Thomasville Heights community.
6. North DeKalb Mall will be torn down. Its new name will be ‘Lulah Hills.’
The new North DeKalb Mall has presented drawings on what the site's future will become in addition to its new name, ‘Lulah Hills.’ The development is slated to be completed by 2025. It’s slated to include 1,700 multifamily units (most likely luxury apartments), 100 townhomes, and a 150-room hotel.
And yes, the North DeKalb AMC movie theater will remain. The question of whether or not it will receive a facelift remains. If so, it’s the end of its uber-popular discounted movie ticket pricing.
The new North DeKalb Mall will take a playbook from Avalon, the successful mixed-use property in Alpharetta. That project, led by developer Mark Toro, has become the standard of mixed-use retail in wealthy enclaves across the metro. Toro is now creating another similar project for Johns Creek.
As for North DeKalb, it will now be joining the fray with its own upper-income trending mixed-use facility. The project will be anchored by nearby communities of downtown Decatur, North Druid Hills, Emory, Brookhaven, and Tucker.
7. Brookhaven tried to annex more DeKalb County territories.
Brookhaven tried (and probably still is) looked to annex several adjacent parts of DeKalb. After a pushback from residents and businesses, the effort seems doa…for now. This business pushback included the developer behind the North DeKalb Mall revamp, Edens.
This included a proposed move to annex over 600 acres and several key wealthy North DeKalb neighborhoods into the city proper, including the nearby Toco Hills area of North Decatur. Pushing Brookhaven close to the borders of Atlanta (Emory University), the city of Decatur, and Tucker. In addition, the DeKalb County Board of Commissioners has called for more transparency regarding this potential annexation. Including questions on the validity of signatures for a ballot referendum that, if approved, would be up for a vote in November.
Cityhood requires expansion, and Brookhaven is no different
Like all cityhood initiatives, the reality of creating a local fiefdom is hitting the wall of a lack of available space. Brookhaven, like nearby Tucker and even further Stonecrest, realizes that low-density suburban real estate is not a growth driver. Brookhaven made a formal request in July for annexation.
All three DeKalb cities have sought to annex more territory over the last decade for growth to varying results. Tucker and Clarkston had a spat over who owns North DeKalb Mall. Brookhaven is competing with nearby Chamblee, Dunwoody, and the city of Atlanta for viable space. At the same time, Emory left DeKalb proper for Atlanta.
While the ill-advised city of DeKalb is still attempting to take over 1/3 of all the county's residents. Or the continuing drama over land use at ‘Cop City’ between Atlanta and DeKalb County. Instead of one unified city, expect more skirmishes to emerge in DeKalb County over land use.
8. Wellstar is opening a new $100m health tech incubator in Midtown months after closing its hospital in O4W
This time last year, the statewide healthcare system Wellstar made headlines after it abruptly announced, then closed its Old Fourth Ward hospital. In the process, leaving Grady Hospital as the only Level-1 trauma center in Atlanta. As well as a trauma center in East Point. This led to veiled criticisms and a federal civil rights complaint against the company for abandoning poor and lower-income black communities.
Now, the company has announced that it will open a new $100 million health tech incubator in addition to an in-house health tech VC firm.
WellStar is following the growth patterns in the Midtown area, first started by creating TechSquare. Over the last 15+ years, Midtown has remained brimming with development anchored by Georgia Tech as the corridor continues to see massive investment despite market forces. Despite the slight slowdown in the overall market, Midtown is positioning itself as the hub of professional tech businesses in the southeast. A position that could one day rival and potentially surpass that of the North Carolina Research Triangle.
Wellstar could be betting that this confluence of tech companies setting up shop in the area can help offer innovation and opportunities to further the company.
9. The first of two controversial, suburban-designed Chick-fil-A has arrived at Ponce and Boulevard
After much hoopla over concerns about low-density land use, suburban designs, and increased traffic, Chick-fil-A’s controversial new store at the corner of Ponce de Leon and Boulevard has opened. The store is the first of two suburban-designed restaurants on the street as the second, located next to the Clermont Hotel at the former Dugan’s Bar, will open later this year.
The move drew such pushback that the city has since vowed to change the permitting for spaces in the area. Ponce, one of the most traffic-laden streets in Atlanta, will continue to see new development. A new residential development is a few feet away from the new CFA alongside a new timber office tower currently under construction next to Ponce City Market, the Atlanta BeltLine, and continuing development in the Old Fourth Ward.
The move will see the often traffic-inducing fast food restaurant contribute to a corridor that will see thousands more new residents, workers, and sightseers to the area.
10. In Fitzgerald, Georgia, local leaders have decided not to feather their 62-foot-tall ‘big chicken.’
In June, in Fitzgerald, Georgia, local leaders decided not to feather their 62-foot-tall chicken after much debate (yes, you read that correctly) after the city council voted down extending a massive flower garden inside a constructed chicken sculpture at the center of a controversy regarding tourism funds.
The large metal bird was part of a public art project to attract tourists to the small town. Due to a military experiment, the area is home to many wildfowl, specifically wild Burmese chickens, which arrived in the 1970s in nearby Tifton, Georgia…Yep, that happened.
According to town lore, the chickens were either released or escaped and had grown into a beloved invasive species in the small town of 9,000 people. There is even an annual festival celebrating this very unusual fact. Since then, the town has tried to figure out how to attract tourists to the area and build on its uniqueness. For former mayor Jim Puckett he decided to double down on the idea, spending $150,000 in designated tourism dollars to erect a giant chicken topiary on the town’s main street. Voters opposed the idea heavily, and Puckett would be soundly defeated in his re-election attempt.
The statue was aimed to be in the Guinness Book of World Records for the largest topiary structure. Bigger than that of the current record holder, Mickey Mouse, at the Dubai Miracle Garden. Should the structure have been fully completed, it would’ve seen the large metal structure encased in a topiary (plant-based sculptures). Citing costs, the already $300,000 metallic structure would’ve risen as it was not ADA compliant and would have ongoing maintenance that would cost each year.
The issue has been controversial as the previous mayor lost re-election over the issue, in addition to voters voting ‘no’ against the measure in 2021. Despite the setback, the frame will remain.
The new ‘big chicken’
The chicken is now the largest ‘big chicken in Georgia’ at 62 ft after beating out the local favorite ‘big chicken,’ a 56 ft at a Marietta KFC. The chicken was built for a preceding local fast food establishment, Johnny Reb's Chick-Chuck-'N'-Shake, in 1956 before being sold and converted into a KFC in 1966.
That structure was originally erected for another restaurant, Johnny Reb's Chick-Chuck-'N'-Shake. Located at the intersection of Cobb Parkway and Roswell Road, the site has become a local icon and a signifier of Marietta. This includes the phrases “turn left at the big chicken” or “just one mile south of the big chicken” heard often in local ads, especially radio spots. In 2017, KFC even produced a short animated film on it.
As for now, the Big Chicken in Marietta will still be the biggest in our hearts.
I hope you had a great Labor Day weekend!
-KJW