Thomas W. Miller, executive managing director for Newmark Grubb Knight Frank’s Office Agency Group, oversees marketing and leasing for Class A office projects located throughout metro Atlanta. He has more than 20 years of experience in commercial real estate. He answered Reporter Newspapers’ questions about office space demand in the Perimeter area:
Q. With construction under way on the State Farm project, and the Hines proposal for a Northpark 100 office tower and campus, is there demand for more office space in the Perimeter area?
A. There is definitely demand for office space in the Central Perimeter submarket. Based on the current demand, there is currently an undersupply of good, quality office space options in the submarket. Rates have significantly risen in the submarket over the past 12 months, and the demand is expected to continue for the foreseeable future.?
Q. What does Hines’ proposal for a 50-story office tower outside the Perimeter mean for the metro Atlanta and Perimeter markets? Does Perimeter really need a 50-story building?
A. Perimeter does not need a 50-story building, and while the Hines NorthPark site is currently zoned for such a building, it is highly unlikely that they will build a 50- story building. It would likely be closer to a 30-story building with the first 8 to 10 levels being parking under the building, so the first floor occupied by office users would likely be above the ninth floor. I would suspect the maximum office space built in one building would be 500,000 to 600,000 square feet.
Q. What’s happening with office rents in the Perimeter market?
A. Rents in the Perimeter submarket have risen by a minimum of 10 percent to as much as 20 percent for certain buildings.
Q. What type of business tenant is looking at the Perimeter area now?
A. The Perimeter submarket continues to get looks from all tenant types, and most importantly, seems to get a solid look at three of every four tenants moving into metro Atlanta. Many of those are Fortune 1000 tenants.
Q. Within the Perimeter area, what are the most attractive spots for businesses to locate? What draws them to those spots?
A. Tenants will continue to be drawn to the Perimeter due to access to the suburban workforce, public transportation (MARTA rail) and amenities. Some buildings within the submarket will continue to outperform others due to their proximity to MARTA, amenities and Interstate access. Various users will rank those attributes in varying order, yet all are considered.
Q. Will the new Braves stadium, work on rebuilding the Ga. 400/I-285 intersection and other construction projects expected to come to the Perimeter area soon attract more businesses or drive them away?
A. In the long term, this will be a huge positive for the general area. However, it might cause some pain and suffering in the short term. Hopefully, many employers will have staggered hours to help alleviate Interstate and surface street back up during typically high-volume traffic hours.