by Hugh Rader, Cresa Atlanta
THE TECH TRAIL TO MIDTOWN
An interesting phenomenon is taking hold in the commercial real estate market: rather than people moving to areas with a strong job market, companies are moving to areas that are rich in talent. In other words, as Tom Murphy of the Urban Land Institute put it, “instead of people moving where jobs are, jobs are moving where the talent is.”
Midtown Atlanta has emerged as one such area. Blessed with a large pool of tech talent, thanks to Georgia Tech and Tech Square, Midtown is attracting the likes of NCR, WorldPay, Honeywell, GE (its digital division), and Equifax. Many of these companies are abandoning their suburban locations in places such as Sandy Springs and Norcross to move in town.
In Midtown, tech-oriented companies and those with innovation centers—like Home Depot, Coca-Cola, and now pharmaceutical company UCB—can attract both college interns (Georgia Tech has an exceptionally strong co-op program) and recent graduates who are tech-savvy and smart. Tech Square also offers an abundance of start-ups, which Fortune 500 companies can collaborate with so they can innovate faster and better.
The young millennials who represent the bulk of this talent pool are eager to work in an area like Midtown and Tech Square, with walkability and easy access to public transit and urban amenities. Since millennials like to live-work-play in urban centers, residential and retail development is booming in Midtown as well. Within two blocks of Tech Square, nearly 1,000 housing units have either been recently completed or are under construction, and nearly 100,000 square feet of retail projects have also been announced, WABE reports.
Midtown’s popularity, of course, has resulted in lower vacancies and higher rates. But companies with a smaller budget can look just a mile or so south or west and find plenty of options, including a number of older buildings, such as the Flatiron building, that are being renovated to become more tech-friendly.
The trend toward in-town living and working is making suburban office complexes less economically competitive nationwide, an article by Governing.com says. These complexes’ advantage used to be their ample space, but many of today’s companies are seeking to take up less space and to become more efficient.
Some savvy suburban developments have responded to the trend by adding more urban-esque amenities—à la Avalon in Alpharetta—and green space. North Carolina’s Research Triangle Park, for example, is planning a $50 million redevelopment to add apartment buildings, a central marketplace and public gathering spaces such as an amphitheater, a dog park and a sculpture garden, Governing.com says. Other amenities will include a bike rental program and a circulator bus that will allow the Triangle’s 40,000 workers to move more easily around campus.
This migration of innovation-minded businesses into town shows no sign of abating. As millennials overtake the workforce—last year, they became the largest component of the American workforce, Governing.com says—their demands will increasingly shape the modern workplace. We can expect more companies whose leases are coming due to cast their eyes toward Midtown and Tech Square in their quest for young, innovative talent.
Blog contributed by Hugh Rader, Vice President with Cresa Atlanta. Hugh has more than ten years of experience as a tenant representative, representing clients from a wide range of industries throughout the metro Atlanta area. For information on Downtown or Midtown, contact Hugh at 404-446-1597 or firstname.lastname@example.org.
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