Five blocks doesn’t seem that far. It’s about a quarter of a mile, or 560 steps. But, it’s just a hair past convenient for today’s office workers.
Now more than ever, tenants are seeking an office experience that is dynamic and energized with amenities. They want great options for coffee, lunch or happy hour that are steps away, not blocks. If it’s not right outside the office, it’s not close enough.
In Atlanta, the Midtown submarket is still where the action is. In 2022, Midtown had 775,652 square feet of positive absorption, which was the highest in the metro according to Cushman & Wakefield. In keeping with the flight-to-quality trend, Atlanta leasing activity last quarter was dominated by Class A product, which accounted for 75.6 percent of all transactions. Most of this activity occurred in Midtown.
With a Walk Score of 87, Midtown is Atlanta’s most walkable submarket. But even there, it’s the vertically integrated office developments that bring a new layer of urban density that are rising above the rest. Not only are they seeing more leasing demand, but they are also experiencing a constant hum of activity and energy due to immediate access to great retail and restaurants. When paired with new and modern office space, this type of product creates a new asset class: an amenity-driven city within a city.
This is the type of environment that Portman is creating at Spring Quarter, a mixed-use adaptive reuse project in Midtown. Currently under development, Spring Quarter will transform a full city block along one of Midtown’s most active corridors. It includes 1020 Spring, a 525,000-square-foot, Class A office tower, 40,000 square feet of retail space and a 370-unit luxury residential tower. 1020 Spring is anchored by the historic H.M. Patterson & Sons-Spring Hill Chapel, an iconic landmark that is being reimagined into a day-to-night food-and-beverage destination curated with true-to-Atlanta concepts.
Not every site has the land availability to create a city within a city, but developing new office space in districts that already have the access to an amenity base like Spring Quarter attracts new tenants and top talent just the same.
In Atlanta’s Old Fourth Ward neighborhood, Portman is also nearing the completion of Junction Krog District, a 135,000-square-foot, Class A office building fronting the Atlanta BeltLine. Adjacent to the popular Krog Street Market food hall and new retail space, Junction Krog District’s ground-floor design features a 7,000-square-foot public porch, making the office building a conduit of energy to the BeltLine, another one of the city’s most active corridors.
Despite economic headwinds creating hesitancy in the market, companies are increasingly returning to the office, whether on hybrid or full-time schedules. New-to-market companies continue to show an interest in expanding or relocating in Atlanta, and in-market companies are considering moving to a more amenitized building to further incentivize employees to come back to the office. When it comes to where they are looking for space, it’s the office environment that has the immediate access to amenities, without the need to walk those five extra blocks for a midday iced coffee or cycle class.
We remain optimistic about the future of office in Atlanta; the market fundamentals that have made Atlanta resilient will continue to position the city for growth in office-using sectors. Over the next several years, we expect to see more tenants getting out early to lock up their space due to the increased scarcity of highly amenitized, new office space.
Editor’s Note: Junction Krog District is set to deliver in July and Spring Quarter is set for completion in third-quarter 2024.
— By Travis Garland, Managing Director of Portman. This article was originally published in the May 2023 issue of Southeast Real Estate Business.