What Will Fiserv's Impact Be on Peachtree Corners?
Make no mistake, Fiserv's deal to move to Alpharetta is a blow to Peachtree Corners. But some also see the silver lining--the timing of the move couldn't be better. (And just like comedy, dancing, and souffles, timing is everything.)
Gov. Nathan Deal made the move official on Friday afternoon. As we originally reported here, Fiserv made up it's mind and inked a deal to take the entirety of Cobalt Center, the 376k SF office complex in Alpharetta the company had been eyeing for months. That deal means Fiserv (formerly Checkfree before the Wisconsin-based software payment system maker bought the Norcross company in 2007) will be moving its 500 employees out of Peachtree Corners, including vacating its cloistered, wooded regional HQ campus at 4411 East Jones Bridge Rd.
Other buildings Fiserv will move out of include 107 Technology Pkwy; 3930 East Jones Bridge Rd; 6625 The Corners Pkwy and 5335 Triangle Pkwy, all of which are in Norcross (the list was supplied by Fiserv). Fiserv's Buzz Anderson—who directs the company's real estate—tells us that the Alpharetta location is close to employee homes (after these past few weeks and the ice let's all work closer to home), the company has “the ability to modify that space to fit our needs and reflect our brand,” and perhaps most importantly, “Alpharetta is also home to many other technology companies.”
Lincoln Property's Michael Howell says Fiserv (on top of the fact that Wells Real Estate REIT is subleasing some 100k SF at its Peachtree Corners HQ) has made “a big hole” in the submarket. “The good news about Peachtree Corners is that it's a relatively smaller submarket that historically recovers well, and it's land constrained, so there won't be new big blocks of space coming to market anytime soon,” Michael says. According to Colliers International, Fiserv's move-out will increase the submarket's office vacancy from 21.8% to 24.3%. (And right before Valentine's Day, that's harsh.) And absorption, while positive, has been lackluster at best: 13k SF for all of 2013. While landlords in other Atlanta markets are finally pushing rents up, “this will be tempered in the short-term” in Norcross, he says.
Lavista Associates' Rob Binion sees things more positive. First, most of Fiserv's leases--totaling more than 360k SF including its wooded office campus here-- expire in 2016. And that timing could be fortuitous: “The activity we're seeing metro-wide in terms of job growth could mitigate all of this. If it weren't for Wells putting their building back on the market, Peachtree Corners would be in the mid-teens Class-A.” And Rob points out that as other submarkets get firmer, especially Central Perimeter, Peachtree Corners becomes an alternative for companies. Cases in point: Intuitive Surgical's recent purchase of 5655 Spalding Dr for its high-tech surgical training center, and expansions of Columbia Mutual Insurance and Herschend Family Entertainment.
