Published on March 3rd, 2017 |0
Buckhead’s Changing Skyline: Older Demographics Fueling Apartment Boom
While Atlanta’s condo market is leveling off, high end apartments are being built up and down Buckhead’s main streets, many of them aimed at “recent divorcees” and middle-aged executives prefer an apartment for long business as opposed living in a hotel. Generally Millennials are locating in Midtown with Buckhead attracting a more mature, wealthier customer base.
“Our residents don’t want an ‘apartment lifestyle,” says Bennett Sands, development director for Wood Partners, which will soon start construction on The Whitley, a 22-story, 267-unit apartment tower by Phipps Plaza. “They want an environment of a custom home.” While he says he wants to appeal to every demographic, he concedes that there are differences in his Buckhead apartments versus Wood Partners’ Midtown development, Alta.
Alta’s average floor size is 900 square feet while the Buckhead one will tack on an extra 300 square feet larger to accommodate a bigger master bedroom and a smaller second bedroom for kids visiting on weekends or as an office.
Todd Oglesby, managing director, Southeast of the Alliance Residential Co., says his Phoenix-based firm is working on two apartment complexes, one next to Regents Park near Peachtree Battle, and the second on Maple Drive in Buckhead Village. He also is building larger units and smaller units — larger for the older clients and smaller for those who want to have a starter apartment in order to have the location.
“Our clients are older and while they want amenities such as pools, they don’t want a pool full of 50 year old women,” he joked. “But, they don’t want thumping music by the pool. They don’t want a South Beach Miami vibe; it’s much more understated.”
Adam Harbin, acquisitions & development partner for The Hanover Co., says Buckhead still is the epicenter for Atlanta living and the race is on to finish complexes before the competition. “The demand is fueling this construction boom,” he says. “Five years ago construction cranes were swinging in the wind in Buckhead. We have a number of projects and it doesn’t scare us. The number of units coming online is still way below the job growth in the area.” Hanover is building a 22-story tower with 353 luxury apartments next to the Buckhead Theater.
While the rental market is hot, the developers admitted that a conversion to condos would be in the cards if the market switched gears in the future.
“Buckhead is in transition but I say the more the merrier [in terms of competition],” says Ed Allen, SVP, of Related Development. “We see a great job story for the next three years and a flattening of single family housing starts in the area. There’s a lot of inventory coming on board in the next couple of years but long-term it’s fine.”
Sands admitted it was an “arms race” to see what projects come on board and what will attract residents from one project over another. “Again, it’s amenities. If I have to add an in-house masseuse and take on an extra nickel per unit to cover it, fine. We have a concierge program that’s over the top. We’ll walk your dog, water your plants and hang up your dry cleaning if you’re away.”
Sands says that Buckhead’s traffic congestion is another reason why location is important in Buckhead. “What drew us to our site is that we don’t have to drive on Peachtree Street, which we avoid at all costs,” he says. “You can get to Georgia 400 and the Perimeter easily, which you can’t say about a lot of places in Buckhead.”
Harbin says that residents “want to be fully connected to the internet and cell service at all time. Getting phone service not only in their apartment but in the hallways and garage is more important than water pressure,” he says.
In the second panel, entitled, “State of Mixed Use Retail & Office,” the panelists discussed the increased density of housing in Buckhead and its affect on retail. Buckhead needs to have a true work/live environment that Midtown offers with grocery stores, retail and offices within walking distance, and that come with increased urbanization.
“There is no question Buckhead surpasses every other submarket in the city,” says Rae Uttenhove, EVP and market Leader, SRS Real Estate Partners. “Buckhead is defined by luxury shopping and people come to Buckhead for that unique shopping experience.”
Buckhead needs to offer this luxury retail “adult playground,” but also needs its counterpart, “a retail environment that is more diverse and cool, something that is outside the mainstream. You need that mix of price points.”
Herbert Ames of EDENS pointed out that there are 5,000 hotel rooms in Buckhead “and that’s not an insignificant number in terms of retail and it’s not going away.”
Robin Loudermilk, president and CEO of the Loudermilk Co., says his project, The Charles, an 18-story tower near the Buckhead Theatre, faced neighborhood height restrictions that kept the scale down and made it “very tough” to make the numbers work. “You have to get creative and hope you can get the rates to justify the development.”
“Buckhead is a sophisticated market and and a sophisticated retail market and you can’t just put in residential and hope it works out,” says Jeffrey Graham of the Graham Group. “You have to build larger units that differentiate themselves from the Buckhead competition but also Midtown.”
Add John Lundeen of Coro Realty Advisors, “We’re seeing office space like a gated community with outdoor living. You want to bring the energy to the street and have people sit, use their cells, bring their computers outside and work. You need that connectivity.”
By Mary Welch