By John Schaffner
The Central Perimeter real estate submarket has virtually become the boom town of the metro Atlanta market and, according to many knowledgeable forecasters, looks to remain so for at least the decade to come.
Known among real estate professionals as Perimeter Center, the area today is in the midst of a dramatic transformation, with major development and redevelopment projects going on or planned for almost every corner of every major thoroughfare.
The Central Perimeter submarket extends along I-285 adjacent to Georgia 400 and is generally bordered by Ashford-Dunwoody Road, I-285, Roswell Road and Abernathy Road. Today, it supports over 115,000 daytime workers and is home to five of Atlanta’s Fortune 500 company headquarters.
Just in the past month, there have been announcements of the development of a virtual new city over the next 10 years at the northwest corner of Hammond Drive and Perimeter Center Parkway and a $270 million mixed-use project on the west side of Abernathy Road and Georgia 400.
But those are just two of more than a half-dozen major new developments on the horizon within the Perimeter Community Improvement District (PCID), not to mention developments either underway or being considered along Roswell Road in Sandy Springs.
During a May 3 meeting of the Real Estate Investment Advisory Council (REIAC) held in the Perimeter area, Jay O’Meara of CB Richard Ellis provided an intro to the central Perimeter submarket, pointing out it includes 27 million square feet of office space, 9 million square feet of retail space, 4,000 hotel rooms, 4,000 residential units under construction.
Meara said Sembler sold the retail space at Perimeter Place for $400 a square foot, “which is astounding.”
“It just sort of makes sense that everything has gravitated here as everything has moved northward,” he said.
Here are some of the brief highlights of what is presently under construction, has been announced or is on the drawing boards in the market:
• Probably the largest single announced development for the Central Perimeter submarket is the 42 acres purchased along Perimeter Center Parkway north of Hammond Drive for $83 million last September by the GID Urban Development Group out of Boston. Over the period of a decade beginning in 2009, GID plans to develop “High Street” with 3,000 residential units, 400,000 square feet of office space, 400,000 square feet of retail space and 400 hotel rooms in the form of a true vertical urban community.
• Three prominent local developers announced they were teaming up for a $270 million mixed-use project called, “Abernathy 400,” overlooking Georgia 400 on the southwest corner of Abernathy Road that will include 550,000 square feet of office space and more than 20,000 square feet of ground level retail and restaurants space over two buildings, a 400-room luxury hotel and a 150-unit condo community. The three developers are Ackerman & Co., Russell New Urban Development and the Lane Company.
• Ackerman & Co. is also involved in the redevelopment of the Corporate Campus site at the intersection of Hammond Drive and Peachtree-Dunwoody Road.
• In that same area, at Peachtree-Dunwoody Road and I-285, property owner Tishman Speyer is planning a redevelopment of the Palisades office park site to add a 25-story office tower, a 35-story hotel and condominium tower, with 200 residential units and 200 hotel rooms, and 50,000 square feet of retail space.
• Novare has bought the site on the southwest corner of Hammond Drive and Perimeter Center Parkway, directly across Hammond Drive from the GID property, and Novare President Jim Borders has hinted to the Sandy Springs Reporter that the company would love to have a Twelve Hotel and Condominiums in the Central Perimeter submarket. The new Perimeter Center Parkway bridge over I-285dumps traffic into the Perimeter Mall area directly at the Novare property.
• Next to the Novare property along Hammond Drive, the owners of a two-story retail center that includes The Derby sports bar are also talking about redeveloping that center.
• Across Peachtree-Dunwoody and at the corner with Hammond Drive, the owners of Concourse have had that corner property rezoned from office space use to residential use.
• Across Georgia 400 at the corner of Barfield Road and Mount Vernon Highway, The Griffin Company is breaking ground on two office buildings this summer on the site that formerly was a Ford auto dealership. At the $90 million development called Northplace, The Griffin Company partnered with Jolly Development to build 130 condominiums north of the office buildings as on the 10 acre lot Griffin purchased.
• Almost all of the older one- and two-story office centers on the east side of Barfield Road between Mount Vernon and Hammond Drive have been bought by Griffin and Cousins Properties for future redevelopment.
• On the south side of I-285 along the Glenridge Connector, a landowner named BTIC Glenridge, LLC plans to develop 198 residential units, 15,000 square feet of retail space, a 5,000-square-foot bank and 23,500 square feet of additional office space on 8.4 acres.
• On Roswell Road, Griffin expects to release plans in the next 18-24 months for the redevelopment of five acres of property between Roswell Road and Boylston that presently includes the Bank of America building, the old post office, Kentucky Fried Chicken and the former Checkers restaurant, into a mixed-use center with residential and retail and possibly a Sandy Springs city hall facility and a performing arts center.
• And, of course, south of I-285 on Roswell Road, Sembler is redeveloping the Prado center with a mix of big-box retail, smaller retail and restaurants.
The proposed massive GID “High Street” development represents the first actual major mixed-use development to be planned directly adjacent to one of the four MARTA rail stations since they were developed in the submarket.
Northpark is adjacent to the Sandy Springs MARTA station, but that office complex was there before the rail service was extended to the Central Perimeter market. Furthermore, it is not a mixed-use development.
While Sembler’s Perimeter Place includes the Manhattan high-rise condominium, it is primarily a retail development.
What GID envisions for its 42-acre site is something quite different, according to John Darrah, vice president of the GID Urban Development Group. “We saw that as an opportunity to create the center of Perimeter Center. There are a lot of disjointed land uses around Perimeter Center,” he explained. “When you picture Perimeter Center, where is the heart of this place? That is very much the focus of the GID plan for this property.”
The central theme GID is working on is “How do you create a sense of place?” according to Darrah. “How can we create some traditional urbanism in the Perimeter Center area, that will make people really want to love it. We want something that is pedestrian oriented and has a lot of connectivity to its surrounding land uses. It is something that creates this sense of place,” he added.
Darrah said, “The first notion that we worked on with master planners was to break the site into an urban street grid. Perimeter Center is so alive with so many places you could walk to. IT has some of the most wonderful urban experiences.
“Sembler’s Perimeter Place is a nice start,” Darrah added. “What we are proposing to do is the next evolutionary step. We are starting by taking this site and breaking it up into walkable city blocks. The proper distance for a walkable city block is about 200 feet. We would provide 10 to 15-foot wide sidewalks, with plenty of room for street trees. We would provide parallel parking so that people feel they can park there, but also to shield pedestrians from the street. Provide narrow two-lane streets so that people can drive, but only slowly in order to encourage people to walk back and forth across the street. Then you put retail on the ground floor with residential above to create this vertical mixed-use.”
The property is currently zoned for 2.4 million square feet of office. GID is seeking to convert much of that to residential through the zoning process.
“The way it is set up now is rather disjointed, which I think blows the opportunity of the site to create a town center environment,” the Bostonian stated. “By putting retail with office above or retail with residential above, and vary the heights and architectural style, it starts to feel like a real city evolving, framed by open spaces.”
Being right across the street from the Dunwoody/Perimeter Mall MARTA rail stop encourages people to get out of their cars and use public transportation, he added.
The walkability of the Central Perimeter submarket also was one of the main topics discussed by a panel moderated by Lance Patterson, president of Barry Real Estate, and including Darin Collier, executive vice president of Worthing Southeast, Yvonne Williams, president of the PCID, Joel Griffin, chairman & CEO of The Griffin Company, and David Rubenstein, senior managing principal and founder of Rubenstein Partners.
While the consensus was that there is a great deal of public interest in creating walkable communities in the Central Perimeter market, certain established roadways —such as Perimeter West Parkway and Ashford-Dunwoody Road — don’t encourage a walking environment because of the width of the roads and the long distances between intersections. Those two factors discourage people from crossing the street.
It was pointed out, however, that it is quite possible to develop community nodes that promote walking and can provide connectivity to other surrounding nodes. It was pointed out, for instance, that the development of GID’s “High Street” and Ackerman’s redevelopment of Corporate Campus could provide such an opportunity due to their proximity to each other.
Comparing the Central Perimeter market to Buckhead, Collier said the Perimeter market has better dynamics for walkability because it is more constrained in size. He also said it is easier to get in and out of the Perimeter market.
Collier said one of the big opportunities available in the Perimeter market is that much of the product inventory is now aging, which makes replacing it easier. He also said good zoning has allowed for greater density and more vertical development.
Griffin said he feels people are ready for significant change, especially in the central business district of Sandy Springs. He cited the hard work that has gone into producing a new comprehensive plan for the city.
But Collier said he is not convinced the governments and citizens have bought into increased urbanization. He warned zoning will continue to be a challenge.
Collier said one statistic the market has to overcome is the largest imbalance of worker to residents “of almost any submarket in the country.” He said the development of more high-rise residential in the market is essential to reducing that imbalance.