David Cummings on Startups

Atlanta Tech Village Shrank the Traditional Buckhead Real Estate Submarket

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David Cummings

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One interesting detail of the Atlanta Tech Village is that it actually shrank the commercial real estate submarket in Buckhead. Let me explain. Real estate submarkets, like Buckhead, are tracked based on available Class A, Class B, and Class C space. The Village, before renovation, is a Class B mid-rise, representing 103,000 square feet. After renovation, it’ll be a Class A building with over $80/ft invested (counting items like the new courtyard and rooftop patio).

From a market perspective, the Class B space is being taken off the traditional market, making things less competitive for the buildings nearby. The vast majority of the tenants in the Village wouldn’t choose a space in Buckhead so early in their startup journey, and would likely be in subleases or Class C space for cost and flexibility reasons.

Buckhead has officially lost 100,000 square feet of Class B space, and it’s great for the future of tech startups in the city.

What else? What are your thoughts on Atlanta Tech Village shrinking the amount of space in the Buckhead submarket?

Comments

3 responses to “Atlanta Tech Village Shrank the Traditional Buckhead Real Estate Submarket”

  1. Bo Keatley (@BoBoKeatley) Avatar
    Bo Keatley (@BoBoKeatley)

    That’s a rather interesting prospective from someone that was a User in Buckhead and is now an owner (but also still a user!) Technically the building pre-reno was an “A” building but can see why it would be viewed as a “B”. From a net absorption standpoint I suppose the building would need to be fully leased for the space to be off the market. If ATV is renting the entire building from the ownership entity than 100k has been taken off the market.

    Reply
  2. Mike Schinkel (@mikeschinkel) Avatar
    Mike Schinkel (@mikeschinkel)

    @David,

    I had wondered about that. Question: Given that this could have/is having a significant negative effect on an established and generally politically strong and connected industry, do you worry at all about backlash and attempts to by those affected to lobby to get laws or other anti-competitive actions to limit expansion or even make it difficult for ATV to operate profitably in the future? If yes, do you have any strategies to combat such protectionism?

    Reply
    1. David Cummings Avatar
      David Cummings

      I don’t have any concerns. The commercial real estate community and city leaders have been incredibly supportive.

      Reply

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