Crane Watch: February 2023
Microsoft pauses in Atlanta, Ponce development updates, Portman's dominance, and other real estate news
Welcome to my freemium 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 to everything else. For my dad, keep staying positive!
1. Atlanta is getting an affordable housing tower at 2 Peachtree Street
The city of Atlanta recently purchased its largest building ever for the sake of expanding affordable housing. 2 Peachtree Street is a 41-story, 1 million sq ft former office tower next to the 5 Points MARTA station downtown. The plan is to put Atlanta as one of the national leaders in converting downtown office space into mixed-use, mixed-income housing as post-pandemic plus work-from-home has dramatically altered American cities. Cities that were experiencing a much-needed boom from 2000-19, as the end of expanding suburbanization and white flight patterns of economic development were finally shifting inward again for the first time in decades.
The plan was first announced last fall and is one of the many affordable housing projects being addressed by the Dickens administration. Mayor Dickens has also hosted HUD Secretary Marcia Fudge last fall with the hopes of receiving federal funds for several Atlanta projects. With a purchase price of $41 million, this acquisition was made possible by the city via help from Invest Atlanta. The project is currently looking for a development partner, with the goal of having that company secured by the end of this year, aiming to start its renovation in 2024.
2. Ponce de Leon development updates
Ponce de Leon’s redevelopment has some new updates. The massive site has just released new images of the multi-unit mixed-use facility in Midtown.
Spanning two full city blocks, this project will seek to build off of the white-hot market of Ponce, Piedmont Park, the Old Fourth Ward, and Virginia Highlands. Portman is moving into an Atlanta real estate corridor that has nothing but continual growth as the Beltline’s eastside corridor is showing continued strength.
For more on this, I refer to my previous newsletter: RIP Star Bar, new Phipps Plaza, even ClayCo maybe? + other real estate news — 9/27/2022
Portman Holdings, best known for its parking lots, has been identified as the buyer of the stretch of popular Ponce hangouts. While Cartel Properties has been identified as the purchaser of the adjacent properties on Ponce including restaurant 8Arm…
… 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.
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.
3. Microsoft pauses its Westside headquarters
Microsoft has paused (maybe permanently) the development of its anticipated Westside headquarters. This comes as the company has announced mass layoffs and a larger trend of corporate restructuring as companies try to reduce the impact of a likely recession or a soft landing in 2023 and beyond.
Microsoft already is using Atlantic Station as its east coast office and could continue to operate from there for now. As to the status of Quarry Yards, which Microsoft purchased for $127 million dollars just prior to the pandemic, and the adjacent 90-acre plot of land next to the Bankhead MARTA station that Microsoft also purchased in anticipation of a sprawling east coast campus all plans are TBD.
From my previous Crane Watch on 1/27/2022:
The Quarry Yards project was a $400 million dollar mixed use development announced in early 2018 with former Atlanta Brave, Mark Texeira being a main leader in the group. The project from the beginning was being questioned for its gentrication implications, ‘New Atlanta’ target audience, and marketing materials. It then was purchased for $127 million dollars by Microsoft in 2020 for its east coast office, in addition to another 20 acres last year for $22 million.
Will the Westside real estate gold rush continue?
That anticipation of Microsoft’s east coast headquarters prompted a gold rush to the Bankhead Highway (aka Hollowell Pkwy) corridor. The market has been slower on the existing home side as wholesalers, house flippers, and vulture real estate bros have somewhat cooled, but this is a matter of how long versus a permanent one.
Microsoft’s arrival was the icing on the cake for a smoldering commercial and residential marketplace, leading to concerns that the pause will continue to further cool down the market. Grove Park, another community located on Hollowell Parkway has been one of the biggest recipients of the new investment over the years but also has quickly become a hotbed of gentrification alongside new development.
Microsoft’s pause could be seen as a reprieve, albeit temporarily as the company will likely sell off the properties at a later date. For the ‘Next Atlanta’, the Westside is still poised to be the future of development within I-285 for this decade.
Anchored by the Westside Beltline trail, an increase in land speculation, upgrades to existing parkland, now $700,000+ condos, and the Echo Street West development at the corner of Bankhead and Northside Drive. Alongside the newly created Westside Park, including a massive expansion of several hundred new homes around the park. All of which were within walking distance of the new Microsoft campus.
Will Microsoft’s pause lead to the Bankhead MARTA station redevelopment pausing as well?
The anticipation of this arrival to bring in Microsoft also brought in a national developer to lead the redevelopment of Bankhead MARTA station. That developer is/was the Washington DC/New York City developer The Peebles Corporation, the largest Black-owned real estate development firm in the country.
Currently, there is no word on if the Bankhead MARTA station development will continue or if Peebles Corporation will remain with the deal. But it could be read as a sign that the stalwarts of Atlanta’s previous construction/real estate regimes are now facing the realities of having to compete nationally. Peebles could pull out and refocus all of its attention on its New York properties, which includes a planned $3.5 billion dollar tower in the city. Peebles has had its eye on the Atlanta market before, but considering the uncertainty of Microsoft as a next-door tenet, it may pause as well.
4. Bowen Homes redevelopment updates
The ongoing plan to redevelop Bowen Homes will be continuing with a meeting and series of announcements on the site on March 2nd at 6:30pm. Bowen Homes was one of the last remaining, large-scale public housing sites in Atlanta that closed during the 2009-11 phase of housing project demolitions. Which has sat vacant since 2009.
Bowen Homes' 74-acre site sits at a burgeoning point of future development as the Hollowell Parkway (fka Bankhead Highway) is in the throws of gentrification, land speculation, redevelopment, and new development. While most of these aforementioned things have not quite reached this section of Hollowell Parkway yet, there is a likelihood that it eventually reaches the area as the Westside remains strong.
The difference between the October 2022 and the January 2023 plans include over several hundred more affordable units. The increase in affordable units from 27% to 41% in the 2,000-unit building would make the new Bowen Homes the largest affordable housing site in the city. The project is part of Atlanta Housing’s new 5-year development plan, a plan that will include developing several sites including the Civic Center redevelopment.
5. New Tower over Margret Mitchell's home coming soon
A new 30-story tower will be built directly over the home of Margret Mitchell. The project is a two-block project set to include a pocket park, public art instillation, and pedestrian plaza. The project would be centered on the Midtown Delta Community Credit Union site. The 30-story building would be anchored by a 13-story parking lot despite being less than 50 feet away from the Midtown MARTA station.
The plan intends to not disturb the historic home, which is one of the last Peachtree Street Mansions remaining, generating a cautious sigh of relief for historic preservationists. But throughout Atlanta’s history, The Margret Mitchell House was also almost demolished several times not to mention a 1978 fire that almost took down the home, which then again happened in 1996.
6. Portman’s 04W office building is shaping up on the Beltline across from Krog St Market
Portman Properties’ massive Old Fourth Ward office complex is taking shape on the Atlanta Beltline. Located on the eastside portion of the Atlanta Beltline across from Krog Street Market and the Irwin Street Market. The new site looks to become an infill for the next stage of massive development along the most expensive piece of Beltline real estate. Portman is currently showing its strength, making its case as Atlanta’s premier developer as the company is moving forward with several projects despite the overall downturn in the market and competing competitive projects.
Portman’s first Beltline project is slated to open in 2025 but its construction is already garnering attention. The scale of the project has produced a near-permanent shadow on the most popular portion of the Beltline. That project will now be joined by a newly purchased parcel across the street, as Portman has also bought the Irwin Street Market, home of Jake’s Ice Cream Shop, and the Atlanta Bicycle Barn building next door for an as-of-yet detailed new real estate project.
7. Irwin Street Market has been sold to Portman Properties
The beloved and quirky Irwin Street Market has been sold in principle to Portman Properties. The sale is a representation of how far the eastside portion of the Beltline has matured into a commercial real estate corridor over the last decade.
For Portman Properties, this is signaling the maturity of the Old Fourth Ward, setting a new ceiling for prices in the area. Portman can now lay claim to the two most currently in-demand portions of the eastside Beltline trail.
This could allow the company to shape the future of the area similar to Ackerman & Co’s Lee + White’ development, which has managed to have a chokehold on the southwest section of the Beltline for the last few years. Lee + White has managed to remake the West End as the Beltline’s brewery district as the defacto brewing district for Atlanta. While its next phase consists of a new food hall, office, and outdoor third space, the site is also a likely point of reference for Portman who could be looking to define the eastside market for years to come on the Beltline.
8. Permits for the tallest tower in Atlanta have been granted
The permits for the tallest tower in decades have just been granted. After initially filling in December, the 61-story building would be the second tallest building in Atlanta behind the Bank of America Tower at North Avenue and Peachtree Street.
The money is still in Midtown.
Overlooking I-75/85, facing Georgia Tech, Atlantic Station, and potentially the Midtown Highway capping project, this tower looks to build on the continuing growth of the most in-demand market in the metro. Being only a few blocks away from Tech Square to the south and the Midtown Arts Center station to the north, this is a sign that Atlanta’s best real estate will now be at a premium going forward.
On a macro level, the site will be built on the former Midtown Atlanta post office (it has moved to another location) after it was sold in 2021. This is part of the current USPS’s controversial Post Master General Louis DeJoy’s emphasis on selling off as much of postal properties as possible. As a result, there are several USPS post offices that could be in play in the future including a very viable location on Marietta Street.
On a micro level, the Midtown Atlanta market is quickly selling out of inventory. The remaining low-rise parcels at this point will likely fetch a substantial fee. This would make both Spring and West Peachtree Streets more in demand going forward.
Other real estate news:
MARTA signs a 130,000 sq ft lease at Uptown Atlanta, which will relocate up to 540 employees.
A new, 40-acre data campus is planned for the Westside railyards area, the move follows Amazon’s logistics success on the corridor off of Chattahoochee Blvd.
A 5.8 acre, 576-unit apartment complex is coming to Marietta Blvd.
Cushman & Wakefield is marketing 5 parcels at Pittsburgh Yards to developers.
Zaxby’s aims to move its headquarters from Athens to Brookhaven.
A 3-building office complex, Perimeter Summit in Brookhaven sells for $248m.
Alpharetta, Marietta, and Athens have been named as 3 of the 100 best places to live in America.
A new 20-story, 400-unit apartment building for Buckhead on Pharr Road is under consideration.
The City Schools of Decatur (CSD) School Board are meeting on February 21st to discuss converting two homes into duplexes.
The City of Decatur has reallowed the construction of duplexes, triplexes, and quadplexes.
State Sen. Donzella James has introduced legislation to limit rent hikes.
The Nelson Street bridge is officially open, linking Castleberry Hill to the rest of downtown via the old Norfolk Southern building.
After a recent vehicle crash, Carroll Street business owners are advocating for the street to be a pedestrian zone.
A new affordable housing project is coming to downtown College Park.
Chamblee’s own Beltline plan emerges.
Decatur Square and Wright Square in Savannah have been named one of America’s ten best public squares.
Other older, but noteworthy news:
The renovation of Gwinnett Place Mall is at least $158 million.
The Stone Mountain Commission supports new housing development and meadery for streams.
Most real estate firms donated money to Kemp in 2022.
Mayor Andre Dickens met with US HUD Secretary Marcia Fudge on potential funding for two downtown Atlanta affordable housing sites owned by churches.
A controversial cell phone tower was approved for Oakland Cemetery and Cabbagetown.
A Savannah hotel has been sold for a whopping $50 million.
Urban lagoons may be coming to metro Atlanta.
Northside Drive’s redevelopment is drawing negative reviews for GDOT still not understanding how cities work, especially if it means pedestrian safety.
An affordable housing site in Athens was purchased by a for-profit developer, concerning residents on their chances of remaining.
What I’m reading:
(DEEP DIVE) Private equity firms buying homes in metro Atlanta — A recent AJC piece looks at the role of private equity firms buying homes in metro Atlanta.
The Founder and CEO of Cartel Properties, George Rohrig recently gave an interview with the Atlanta Business Chronicle, you can read that here.
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