By: Ceasar C. Mitchell- DLA Piper, LLP
Atlanta rose from the ashes after the Civil War, like the Phoenix we herald as the spiritual emblem of our resilience. We are the leading southern city; a city of national prominence and global significance. Some say the “Crane” has replaced the Phoenix as our bird of fancy underscoring the many building cranes that soar above our city hoisting new development projects into the clouds, changing the skyline for posterity. This tradition of building something from nothing, and in some cases on top of something, has also earned Atlanta the economic moniker of F.I.R.E. This reference is not intended to remind us of a time when our buildings burned to the ground. Instead this acronym is a reference to longstanding core industries that drive our local prosperity – Finance Insurance and Real Estate (F.I.R.E.). For decades, this title has been catchy yet true.
But of late, something of notable intensity has been occurring in Atlanta. Where F.I.R.E. once defined our local economy, new industry sectors are cropping up, taking root and flourishing. Transportation and logistics activity is being fed by the world’s busiest airport, regional rail ports, a bowtie of interstate highways running in every direction, and the expansion of the seaport in our coastal sister city to the south. Convention and tourism, anchored by huge perennial retail meet-ups at the AmericasMart, is continuing to grow as we compete in the rarified air for top national rankings. After the burgeoning music scene sent a clarion note far beyond our borders, sports, film and entertainment activity in our city has taken center stage. Technology in healthcare, finance and cyber-security is creating its own gravity in a strong start-up environment.
At first glance, one might think these emerging industries represent a threat to our city’s real estate sector by diverting attention and resources in an environment of perceived scarcity. In fact, the opposite is true. When coupled with the talent pool at our local colleges and universities issuing out a ready workforce to feed these industries, real estate activity gets a bump. New development of office, retail and multi-family spaces become necessary to serve this industry diversification.
Additionally, not to be ignored or overlooked is the critical role that the public sector is playing in the local expansion of real estate opportunities. Three critical factors have led to the public sector’s ongoing impact on real estate in Atlanta.
First, the expansion and further defining of the city’s development agency Invest Atlanta has been a game changer. The transformation of Invest Atlanta from an agency focused mostly on small business and community-based real estate development to a large project partner and business attraction enterprise has opened up an entirely new portal for the city to support real estate at the corporate level. Companies considering relocation to Atlanta now see the city more as a partner than an impediment to their move, particularly where a real estate play is involved.
Second, the city’s growing commitment to transit as seen in the success of the Beltline Project and the city’s increasing support for MARTA has spurred on commercial development in previously dormant areas. MARTA’s transit-oriented developments and mobility-based neighborhood revitalization triggered by the Beltline have uncovered jewels hidden in plain sight in communities like Old Fourth Ward, Historic West End, Edgewood, Adair Park and Reynoldstown. And the temperature is only getting hotter.
Third, the city’s continued willingness to provide direct and indirect financial support to real estate projects in the form of gap funding and tax relief has served as a “but for” bridge for worthy projects, thereby accelerating market activity. Tools such as tax increment financing and abatement bonds have become one of the public sector’s methods of bolstering development while simultaneously supporting critical objectives such as community revitalization, job growth and affordable housing. This win-win approach to public sector assistance has played an important role in the measured, yet ongoing, expansion of the local real estate market.
In the final analysis, Atlanta’s star is ascendant. The harsh pruning of the great recession has led to a strong blooming in the real estate sector. This is in part due to Atlanta’s brand of being a resilient urban mosaic where there is a space and an opportunity for everyone to thrive. As our core industry sectors expand beyond the narrow caldrons of F.I.R.E., to burgeoning sectors in entertainment, logistics, technology and healthcare, opportunities in real estate, likewise, will continue to expand; buttressed by strong public sector support. Thus, while our city’s Phoenix continues to rise, we can anticipate that its newfound soaring mate the Crane will be too spreading its wings in tow.
Ceasar Mitchell is a practicing real estate attorney with the global law firm of DLA Piper, LLP. He is also President of the Atlanta City Council and a candidate for Atlanta Mayor.
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