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How Soon Before New Development?

Atlanta

October 23, 2013 Bisnow

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Speaking of our event, the topic of new development was very much on the fore, with many of our panelists yesterday saying the sheer lack of space in Central Perimeter is forcing some unnamed big tenants to consider anchoring new developments. And that could get some developers "moving some dirt in '14," says O'Neill. (You've got three more months of solace, dirt, then we're coming for you.) "I think we are going to see a decent amount of rent growth in '14."

Cousins Properties' Larry Gellerstedt says the free-for-all development landscape of Atlanta has probably come to an end. In fact, Atlanta—once known as a low-barrier-to-entry market—may not be so much anymore as tenants have become much more choosy on where they locate. Factors considered? Transportation and public school quality. (Your kids should be able to do all the math you can't do.) "You are getting high barrier areas in Atlanta where there isn't 18 different sites. That should be healthy for the Atlanta office market," Larry says.

Regardless, it's still about rents, Bob (right) told the crowd at the St. Regis. "That's really the story. That $30/SF threshold continues to be a barrier," he says. And while the experts on our panel say it still may be premature for actual spec development—rents are going to rise further, and that makes the likelihood of new development more real. "In Atlanta we're just not used to rent growth," Heagy says. "I think the stars are aligning in the markets. We're in to see as much rent growth as we've ever seen."

How Soon Before New Development?

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