Landlords Near Planned New MARTA Stations Eye Real Estate Boom

Moez Hasni and some partners own a small retail building occupied by a grocer between the Bankhead and Washington Park neighborhoods in Atlanta, and at this time last week, they had no plans for the 2,200 SF investment property other than collecting rent checks.

But now they are thinking bigger.

Mayor Andre Dickens announced on Thursday the locations of four new MARTA infill stations in the works, one of which will be a short walk from Hasni's property at 1141 Joseph E. Boone Blvd. The planned station and the thousands of potential passengers moving through it opens up the prospect of tearing down the old building and developing an even larger retail property.

“We would definitely want to redevelop that property into something that would fit into the whole concept of the BeltLine and the MARTA station,” Hasni told Bisnow. “If [the city of Atlanta] allows a station with alcohol license, we would develop it right away [into] a gas station or larger grocery store.” 

Hasni, the chief operating officer of Pine Lake, is one of many owners now contemplating a brighter future for their properties because they are in the vicinity of a new fixed-rail transit station — a proven driver of real estate value.

“There’s going to be a competition to get into those properties,” Sergio Rodolfo Gárate Álvarez, the director of the Emory University’s Goizueta Business School real estate program, told Bisnow in an interview. “Probably already investors are looking how to get into this area because they know there will be a change in demand.”

On April 11, Dickens issued an executive order to spur the development of new MARTA stations at Krog Street-Hulsey Yard, Murphy Crossing, Armour Yards and Joseph E. Boone Boulevard. 

The order requires MARTA, the Atlanta BeltLine Inc. and the city to collaborate on planning, design and finance of the stations. While the order didn't identify the parcels for the new stations, they would be on land where the 22-mile BeltLine loop intersects with MARTA rail, MARTA spokesperson Stephany Fisher told Bisnow in an email.

The announcement came with its fair share of skepticism, as Dickens didn't disclose how his administration plans to fund the stations or disclose a timeline. But even the possibility of new access points to fixed rail has a chance to kick off some old-fashioned land speculation.

The impact mass transit proximity has on property values is well-documented. Commercial properties in proximity to transit stations in a number of U.S. cities saw between a 5% and 42% per-square-foot price premium over properties not near transit, according to a according to a study by the American Public Transportation Association covering 2012 to 2016. 

MARTA has been proven to have its own economic development halo effect.

Over the past dozen years, a large share of new commercial and multifamily developments have popped up near existing MARTA stations, and for good reason. A 2018 Cushman & Wakefield study found that effective rents for apartments within range of a MARTA stop averaged $1.68/SF versus $1.14/SF for those not near a station. Numerous companies have located major office operations next to MARTA access points, including State Farm and Insight Global in Dunwoody.

The first thing JLL Executive Managing Director Jeff Bellamy did when he heard the news of a new station in the Armour Yards area was call his client, Northwood Office. The firm owns several buildings in the popular Armour Yards redevelopment, near another announced MARTA stop, where Bellamy is tasked with leasing office space. 

“It’s going to be a game changer for Armour Yards having the station and the BeltLine,” Bellamy said. “They were thrilled. The landlord was excited that the retail tenants will benefit from having a MARTA station there.”

The source of any financing for the stations is still a mystery, although Dickens said MARTA, the BeltLine and the city would explore both public and private sources. In 2018, MARTA estimated the costs for Murphy Crossing and Krog Street infill stations would cost $103.5M each, while an Armour Yards station would cost $102.2M and the Joseph E. Boone infill station would cost $42.7M, The Atlanta Journal-Constitution reported. Another report by the pro-BeltLine rail group BeltLine Rail Now in 2021 estimated the cost for the four stations could reach $1B, the AJC reported.

A 2020 APTA report also demonstrated that the economic impact of new station development on the surrounding communities outweighed the cost. There is a $5B economic impact on every $1B spent.

While landowners don't deny the upswell in values a new nearby transit station would have, some remained skeptical that Dickens' vision of new infill MARTA stops would ever come to pass.

“Hypothetically, if there's a new train station by our office, that is amazing,” said Eric Kronberg, the founder of the firm Kronberg Urbanists + Architects. Kronberg owns his company's 5,300 SF office on Wylie Street across from Hulsey Yards.

But Kronberg doubts the prospects given the time and money needed to build new heavy-rail stations.

“The magic infrastructure fairies will have to show up with their magic buckets of money,” he said. “That's a lot of fairies with a lot of magic infrastructure money to fund this.”

Prospects of new MARTA stations will have a positive early impact on nearby apartment communities, United Brokers America President Maria King said.

“The fact that this is going to be close to a MARTA station definitely adds value to the property,” King said. “[MARTA has] always brought additional investors to the table because they’re now focused more on that advantage of being close to a MARTA station.”

But Tracy Betts, the regional manager at the Azalea Gardens Apartments off Joseph E. Boone Boulevard, said she doubts a new MARTA station nearby will spur any further interest in the apartments from investors.

The main reason for that, she said, is the boost the property has already gotten from being close to the Westside BeltLine loop. Since the construction of the BeltLine, Betts said she has been courted numerous times by potential investors looking to snag the apartment complex. Betts said her investors have spurned offers to sell and instead are renovating the apartments and holding them.

“I think [a MARTA station] will hurt the value. It's too close,” she said. “A lot of things go on in a train station. I personally don't think this will help.”

Nick Finio, the associate director for the National Center for Smart Growth at the University of Maryland, said the impact property owners feel from a new transit station depends on proximity. The greatest positive impact on property values, by and large, happens closest to the station, with the impacts lessening up to a half-mile away, he said. There are other factors at play as well, including the use and condition of the property and ease of access to the station.

“Hitting the lottery is probably not the right way to describe it,” he said. “The transit station appearing next door isn’t going to magically fix your roof. So you've got to deal with those problems first.”

Gregg Brenner has operated the neon sign maker The Neon Co. for 40 years in a property off DeKalb Avenue near Krog Street. Brenner told Bisnow he’s not entirely sure what it will mean for his property in the long run that MARTA plans a new infill station nearby.

“Overall, I think it would be good. But you never know. There are always pros and cons on almost everything. I never imagined there would be one close to me because you can walk to MARTA stations in just about either direction,” Brenner said. “I’m a neon guy, not a real estate guy, really.”