Five Reasons Why Investors Like Downtown Atlanta

October 1,2015

Here are five things we learned from this morning's The Future of Downtown Atlanta event.

1. OFFICE OWNER EYES MULTIFAMILY
Banyan Street Capital CEO Rudy Prio Touzet told our audience of more than 300 at the Hyatt Regency Atlanta that the investment fund is looking to get into the multifamily game, most likely in metro Atlanta, where it controls some 9M SF of office, including Peachtree Center and Ten 10th St. “We do think that multifamily is in demand in Downtown,” Rudy says, adding Downtown has been behind the curve of the return to the urban center movement.

2. WHO WE COMPETE WITH...AND DON'T
Invest Atlanta senior economic development officer Kevin Johnson says the city's economic development arm never sells Atlanta as a low-cost option. Instead, it promotes the region and not just the city center. And as for what other cities we most often come head-to-head against? “I'll tell you who we don't compete with most often is Charlotte,” even though they're often named as our biggest nemesis. Instead, he cites Dallas, Houston, Nashville, London, Hong Kong and, to a lesser extent, Chicago and Phoenix as our primary competitors for corporate relos.

3. DOWNTOWN HAS "PERSONALITY"
Kevin was on our investment panel, which included Smith & Howard partner Mark Abrams as moderator, Rudy, The Creations Group director Cherie Ong, and Richard Bowers & Co legendary founder Richard Bowers. Kevin says even with various suburbs in metro Atlanta forming their own new mixed-use-centric city centers, Atlanta still stands the test of time given its “unique quality” of having government, services and transit all clustered around a major office and burgeoning residential presence. In some cities you are seeing "manufactured downtowns where you had a piece of dirt and 18 months later, you have a downtown,” he says. “Our downtown has a personality.”

4. DOWNTOWN "LOWER COST ALTERNATIVE" TO FOREIGN INVESTORS
Cherie says overseas investors see better potential returns for the same types of property in Atlanta than alternatives in cities like Melbourne or Hong Kong. In those markets, investors are looking at a 1% to 2% return while paying 10 times the price for the same commercial property here. “Even though [foreign investors] don't care that much about the city, they get that it works. They understand numbers and they get how that works,” she says. “Downtown is not for everybody. It's definitely not for the lighthearted.” Why Downtown versus other area submarkets? “Really the simple answer is it's not Buckhead,” she says, adding that the urbanization movement is pushing Millennials into the urban core. When viewed in that prism, then places like Buckhead are “oversaturated,” she says.

5. STILL PLACES TO BUILD
Compared to other intown submarkets, Downtown Atlanta still has an abundance of lots to develop, Richard says. The area also is an educational core, with Georgia State University, Morris Brown College and Clark Atlanta University. Add to it that Hartsfield-Jackson Atlanta International Airport is less than 10 miles away, and it has strong infrastructure, Richard predicts more companies are giving Downtown a harder look. “Some cities, you have to drive 20, 25 miles” to get to the airport.