May 23, 2014
High-Rise Residential Towers Soar in Buckhead
Atlanta Business Chronicle
by Randy Southerland
Long regarded as a center of finance and home to Atlanta’s wealthy elite, Buckhead is in the midst of a transformation. Here developers are building a host of new apartments – many of them high-rise towers – to serve millennials and older professionals who come in search of jobs and an urban lifestyle.
“Everything that’s coming into Buckhead is restaurant and residential,” said Denise Starling, executive director of Livable Buckhead Inc.“We’ve had one office building so the trend is toward adding residential. We’ve been an office market for so long, but to have a true community you really have to have the residential in the mix that makes it a 24-hour community.”
Buckhead is the heart of the city’s luxury shopping, but it is also attracting more young workers who want to be within walking distance of their jobs, dining and entertainment.
Providing more opportunities for people to live where they work not only reduces traffic congestion, but creates a more balanced community, Starling said.
Developers have been happy to oblige.
Apartments are a part of OliverMcMillan’s new mixed-use development in what was once the Buckhead Village entertainment district. The Residence Buckhead Atlanta, which includes two 20-story towers, will start delivering some of its 370 upscale apartment units in September.
The response has been good so far, according to Hunter Richardson, managing director of development for Buckhead Atlanta.
“We’re still a little early relative to people’s leasing cycle in that we’re ... three and half months out before we start delivering units,” Richardson said. “So we’re out in the marketplace to get good traffic, expecting it to continue to grow.”
These units are aimed at upscale professionals who have decided to rent rather than buy.
“They want the ability to put their dollars in their business and they want the ability to be flexible to move if their careers take them elsewhere,” Richardson said. “So we’ve finding there are a number of people who are looking at this project both in and out of Atlanta.”
One development that meets that criteria is taking shape just a short walk from the Buckhead MARTA station. Here Novare Group Inc., one of Atlanta’s most active builders, is working on the Buckhead version of its Skyhouse concept. The 26-story, 364-unit luxury tower is just off Peachtree Road next to the new MARTA pedestrian bridge over Georgia 400.
AMLI Residential is working on two parcels of a 16-acre tract at the corner of Roxboro and East Paces Ferry roads for apartments.
As part of an agreement with the city, the company is developing a 2-acre park. It will then put up two buildings containing a total of 640 residential rental units.
Zoned exclusively for condos prior to the recession, they’re now rental units, reflecting the reality of the new economy.
The development includes a 19-story tower and a five-story building, said Phil Tague, chairman of AMLI Development Co. Both rents and units will be smaller in the lower-rise building, averaging about $1.80 a square foot, while the tower will likely command about $2.10 per square foot.
“It will be attractive to people downsizing from housing that they already own and it will probably be folks that are 50 years old or older,” Tague said. “We’ll have a mix of younger professionals as well who are attracted to high-rise living and some of the views that they will be able to get.”
Post Properties Inc. is building a 19-story, $76 million apartment tower with 340 units across from Phipps Plaza, overlooking Georgia 400.
Another apartment tower on the site of the old Dante’s Down the Hatch at Peachtree Road is underway by Atlantic Realty Partners and Dallas-based Behringer Harvard.
At Phipps, Simon Property Group Inc. is slated to build 320 luxury units.
As interest in apartments here has soared, so has concern of overbuilding. Tague, and other developers, don’t think there are too many units coming on line. Buckhead has one of the city’s largest pools of potential renters with the incomes to support continuing rent growth.
“We’ve had significant rental increases from the time the country started exiting the recession to now,” Tague said. “Those rental increases aren’t going to endure. The increase in apartment rents is probably not going to be dramatic going forward because there is just a lot of supply being added. On the other hand, there is a lot of demand and will continue to be a lot of demand for as long as this recovery lasts.”