By Allison Bittel and Corey Boyer, Office Tenant Representation
In Gwinnett County, northeast of the city of Atlanta, lies a forgotten submarket. Once a hub for start-ups, the Peachtree Corners submarket has experienced an increase in vacancy in the past decade as in-town markets like Buckhead, Midtown and Central Perimeter have gained popularity among companies trying to attract and retain top talent.
In the early 1970s, commercial real estate developers began building campus-style office parks in the Atlanta suburbs , creating pockets of office development in the Northwest, Central Perimeter, Northeast and North Fulton. These up-and-coming submarkets, particularly Peachtree Corners, offered new space at affordable rents for companies looking to hire recent grads from the region’s top universities. As companies moved out to the suburbs, housing began to follow with the development of residential communities.
However, starting in the early 2000s, people and companies started moving back towards the city’s core. The trend of urban revitalization and development has increased demand for in-town space, which has created limited vacancy and high rental rates that are unaffordable for some tenants. In addition to the impact on those trying to expand or relocate in-town, companies that signed long-term leases in the early 2000s are being hit with dramatic rate increases on lease renewals.
With limited inventory and higher rental rates, office occupiers have once again turned their attention towards the suburbs, to the forgotten submarkets like Peachtree Corners, which offer affordable rates with room to grow. In an effort to attract potential tenants, owners of Class B space are converting product to creative loft office environments, targeting the same start-up companies that once comprised the bulk of tenants in the market.
Two prime examples are The Hub and The Catalyst, which were both recently renovated and offer loft office space with large, efficient floorplates; private tenant patios; extensive fiber optic infrastructure; and more. The buildings are located within 15 minutes of Buckhead, Brookhaven, Johns Creek and Alpharetta, and 25 minutes of Midtown.
In addition to creating “cool” office environments, suburban submarkets are able to offer outdoor amenities that are on-par with in-town buildings as well. Trail systems are popping up in Alpharetta and the Northwest, as well as in Peachtree Corners. The 11-acre, multi-use Technology Park Trail will circle Peachtree Corners, connecting several mid-rise office properties to residential and retail spaces. To capitalize on this, building owners are starting to incorporate popular wellness amenities, including basketball courts, outdoor seating areas and more.
As owners and landlords continue to deploy capital to create desirable office spaces within Peachtree Corners, start-ups or companies that prefer or require a campus feel will make their way back to Atlanta’s forgotten submarket.