By Heather Lamb, Vice President for CBRE Atlanta’s Landlord Representation Group
Atlanta, like many cities, has reacted to the war for talent and the rush to create environments where that talent will thrive. What does the talent want? Data tells us its non-traditional office space with an energetic vibe. Yet, there is still a lack of supply in Atlanta compared to the demand we are seeing for this type of space. Immediately available space in this genre is limited today, which creates an opportunity for the market with existing product to respond.
Office space is virtually a commodity. So with all of the existing or dated office buildings, how are they all expected to offer differentiating work areas? Let’s think outside the traditional office box by creating something new, modern and inviting. These creative spaces have proven to attract tenants seeking a unique approach to the workplace. The office space is becoming the number one factor setting innovative companies apart for recruiting and retaining the best talent.
Many developers, owners, and landlords are crafting an experiential space that makes the employee base (AKA talent) look forward to coming to work and those workers are paying close attention to the access of quality amenities. This goes beyond the old standards, such as on-site car washes or dry cleaners. The Atlanta companies that are in the vanguard are responding by taking note of green space, parks, dining options, corporate entertainment, and the overall feel outside of the four walls of the office space that their best talent is demanding.
The interior space is changing as well, to cater to this creative class. We are seeing innovative owners taking speculative measures, such as removing ceiling grids to reveal ductwork highlighting expansive ceiling heights. Modifying office buildings with traditional 8 ½ – 9-foot ceilings to have exposed ceilings of 14-16-foot heights is a feature that often can’t be achieved in a multi-story office building.
This shift in thinking is not limited to the traditional urban core, as most people would assume. North Fulton – dubbed the Technology Capital of the South – is experiencing significant growth in the “creative office” sector. These suburban environments following this trend are reaping the rewards – similar to the jump in rents seen in the urban markets.
A great example of this story is at Holcomb Woods, a traditional single-story “commodity” office development in the suburban area of North Fulton, which my client acquired in 2015 at 52% leased. During the first six months of ownership, we transformed the commodity office space into an amenity-rich environment catering to the creative class. In less than 18 months, I leased over 90,000 SF to bring it to 92% leased where it sits today, with rent increases over $5/SF during that time. Adapting to the desires of tenants by bringing food trucks, fitness centers, access to bike shares, outdoor spaces and offering non-traditional work environments with 16-foot ceilings has allowed rents to soar. The old strategy of “going low to fill the space” no longer has a place here.
None of these changes can happen without vision and upfront capital investment. The Holcomb Woods leasing approach included working with the landlord, our client, to improve the image of the property. This meant both physical changes to the space itself, and changing the perception in the market. No longer did we seek to simply fill the space, but I began reaching out to the creative set, attracting tech companies and selling the increased value that Holcomb Woods would bring to the work environment of the employees.
Owners have an opportunity to create an experience even in commodity office buildings to cater to the creative class. With an increasingly more digital world and the flexibility for many to work from home, the office space has to prove itself. It has to be a place that fosters creativity and collaboration and keeps people motivated.
CBRE recently released the annual Scoring Tech Talent report, in which Atlanta was ranked among the Top 10 tech talent markets. The creative minds are here; we just need to make sure we continue catering to them to keep them here.
Heather Lamb is a Vice President for CBRE Atlanta’s Landlord Representation Group. Heather represents an Atlanta metro portfolio of more than 4 million square feet. She has specialized in multi-tenant office project leasing since 2004, generating more than 5 million square feet and $350 million in completed leasing transactions during her real estate career. Consistently an industry leader, Ms. Lamb actively serves as a 2016 Board Director for the Atlanta Commercial Board of Realtors (ACBR) and has previously served as a Board Director for CREW Atlanta.
Subscribe today and get future blog posts your email.