Tucker, GA — Metro Atlanta’s real estate crunch is prodding developers to think outside the box. Companies are allowing employees to continue working from home, leaving office space unoccupied. At the same time, a shortage of building materials cannot keep up with the demand for new housing.
During the past six months, available office space in Atlanta jumped from 2.5 million square feet to a little over 6 million square feet according to CoStar Group, a real estate developer. That’s an increase of 88% since January 2020, the AJC reported.
Developer Steve R. Martin, owner of SDM Partners, purchased a Northlake office park in October 2017 for $41 million. To him, changes in Atlanta’s real estate market means shifting to build a live/work property in a central location.
Located at 2245 and 2247 Northlake Parkway, SDM plans to build 80 townhomes for rent if Tucker’s City Council approves its request to rezone the property. Tucker Planning Commission voted 6-1 on April 20 to approve rezoning and variance with conditions, and City Council heard the first read of the ordinance at its May 10 meeting.
The land, comprised of two parcels, now features two office buildings. The building at 2245 Northlake Parkway once served as the longtime headquarters for Yellow Pages, but has since fallen into disrepair. Developers plan to demolish the building and replace it with townhomes for rent only. The rear office building and parking deck will remain.
The 2247 building is 295,000 sq. ft, 10 stories and backs up to a seven-level parking garage with nearly 1,200 parking spaces. It has been vacant for three years, but Martin says it is in “good condition.”
“Do I think office buildings are going away? No, I do not. Everybody’s not going to work at home. There will be an element of people who do work at home,” said Martin, who sees Perimeter Center as his competition.
During public hearing, Tucker residents asked about impact fees, an increase in traffic and affordability.
“Who’s going to pay that type of money?” asked one resident. “Young people and people coming in, what are you offering them?”
Market analysis, said builder David Frame of Landeaver LLC, shows demand for 1,700 to 2,000 sq. ft units to rent for $2,200 to $2,500 per month. Atlanta is very short on land and experiencing a shortage of building materials like PVC and concrete, said Frame.
“That’s part of the reason you’re seeing a big surge in demand for these townhomes and single family detached communities, and they’re professionally managed,” Frame said.
People who don’t want to live in a garden apartment or buy a house range from Millennials to retirees, he said.
“There’s a lot of people who wouldn’t consider renting that are now considering renting. They’ll sell their house, they put their equity in the bank. They can lock the door and leave to go on vacation, and someone’s going to mow their yard and they don’t have to worry about the roof. You’re seeing a large segment of consumer demand that wasn’t there five years ago,” Frame said.
City Council will hear a second read of the rezoning ordinance on June 14.
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