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Concourse: The King, Queen, and I

king and queen towers atlanta

King and Queen Towers Atlanta

The end of last year took a really amazing turn for me. I became a member of the leasing team for the King and Queen building at Concourse Office Park in Atlanta, GA. Being a part of a Rockstar team and representing a trophy asset is a HUGE deal, but it was more than just the “deal” for me. The King and Queen Towers and I have a lot of history.

“Those towers remind me of horses.”

That may sound weird…but stay with me. If you take a horse out for a walk or ride, when they see the barn on the way back, they run home (and if you have never ridden horses before, that can be a very scary experience!) That barn represents a beacon of light for them. It is a safe place where they know they will be cared for by people who love them and want the best for them. The towers represented that beacon of light for me. I knew once I saw them, love was right around the corner.

 

king and queen building

 

I am originally from St. Louis, MO but a lot of my family migrated to Atlanta over the years. After my mother died during my junior year in college, there was only myself and my little sister left. I moved off campus to live with my sister in my mother’s home. It was an eerie time. The lack of noise in the house made me miss my Georgia family tremendously.

“When my sister and I were little, we would travel to Georgia every summer.”

At the young ages of 7 and 8 years old, my mom would put my sister and I on a Delta Airlines flight alone to visit our family. It was my job to take care of her, so that is what I did. Our aunts and cousins would pick us up from the airport and we would head to out to Alpharetta to reunite with the rest of our family. I always hated how long the ride was, but it was also super exciting. I knew we were getting close to home when I saw the King and Queen Towers…the landmark.

 

I would get so excited to see those beautiful towers and I would marvel at their different colors. My sister and I used to bet we could figure out what color the towers would be this time. We both were always wrong.

After I graduated college, my aunt offered me a job and I moved to Atlanta. After a while, she decided to branch off on her own and I offered to help her. I left my shop and helped her to create her own brand. We figured out the business plan, the annual budget, and how we were going to attract talent. As far as we were concerned, the only way to attract the type of talent she needed, was to offer a sexy office space. King and Queen Towers, here we come!

“I will never forget when we pulled into the garage and walked into Concourse 5.”

My mind was blown. I could not believe I was inside one of the towers! We were taken to see several office suites – each one better than the last. It was so exciting to be there and I was grateful to my aunt for having exposed me to the majesty of Concourse at such a young age. Ultimately, my aunt could not afford the rates and we were unable to fulfill our dreams of leasing space at the towers.

Twenty years later, I have the keys to the building. Contact me today to schedule your tour. Trust me, this is where dreams are made. www.concourseofficepark.com.

 

 

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CRE Magic Minute – Episode #1

The commercial real estate market continues to recover, but sales, leasing, and construction activity remain below year-ago levels. The recovery also remains uneven.  There is stronger investor interest for land, multifamily, and industrial properties than for hotels, retail, and office properties. On a year-over-year basis, sales declined by 1% in the fourth quarter of 2020 but they declined 5% in the second quarter. Leasing volume fell by 1% annually but 4% in the second quarter. Construction activity was down by 3% annually and 6% in the second quarter. The risk spread which are cap rates less 10-year T-bond, remain elevated at 6% compared to 4% prior to the pandemic.

 

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Coworking – The Rollercoaster Ride

coworking office meeting 1

Coworking has changed the game 

Coworking is no longer only about office leasing…it is more about an experience.  Coworking spaces each have their own respective ambiance and, depending on what floats your boat, you have several options to choose from.  Long gone are the days of being boxed into a traditional office space.  Coworking is a new kind of product with a new mode of thought that has attracted a new kind of consumer. 

This model really gives hope to the budding entrepreneur.  Some start-ups have amazing potential (a solid business plan, sound projections, and sensible targets) but they do not have the capital yet.  It does not mean they will not get it; it just means they just do not have it now.  In order to be productive, businesses need a dedicated space to create a solid foundation. 

Coworking affords the opportunity to create stability

Sometimes a company needs a coworking space because they are testing the market.  Atlanta is a big slice of pie and it can be hard to determine where your market share is.  While you can guess from afar, it makes more sense to get some boots on the ground to help the company move forward.  Coworking creates a platform for businesses to get their feet wet in Atlanta before committing in a way that hugely impacts their bottom line. 

Today’s concept of office leasing simply is not what it was 3 or 5 years ago.  Companies that enter new markets, and choose coworking as an option, have a plan.  They are intentional about choosing coworking as a first stop before deciding to lease traditional office space.

 

 

 

We are in a recession

While coworking is a great option for some business owners, there are some challenges for the coworking sector of the office market.  We are in a recession and, due to all this volatility, we are at a point in the real estate cycle where we really do not know what is going to happen.  This cycle is unparalleled to any other that we have experienced.  Who could have imagined experiencing a pandemic in their lifetime?  Not me.

Out of 50 states, Georgia is ranked #15 for population growth

We have 18 Fortune 500 companies here, and our real estate is attractive to everyone.  This means businesses are coming.  Coworking has been in rapid growth mode since 2016.  According to a JLL survey published in the 4th quarter of 2019 on office space optimization, the average worker spends only 40% of their day at their desk and 80% of work is considered “collaborative” (that sounds like the foundation for the coworking model to me). 

Flexible work space is not a passing trend…especially considering our current environment.  Coworking has prepared us for these strange times by enabling us to visualize what a non-traditional office environment looks like.  In fact, it is the future of our work space.  I think we can all agree on that now.  

What does the future of coworking look like?

Despite that fact, we need to know what the future looks like.  According to Cushman & Wakefield’s 4Q20 Market Beat, in 2010, coworking leasing represented just 0.5% of all net new leasing.  By 2018, the share was 9.5%. Case in point, during the 2001 recession, Regus (which had embarked on an aggressive expansion program) saw its global occupancy decline from 75%- 59% and then take three years to recover. During the Great Recession, which impacted the CRE sector far more negatively, Regus was better prepared due to its more measured expansion strategy. As a result, Regus’s memberships in the U.S. declined by 5.5% and recovered in a year. Coworking is floating in untraversed waters, however, we all are.  We shall see how it all unfolds.  Stay tuned.

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Crash Course – Commercial Real Estate 101

 

“What is commercial real estate?”

 

Commercial real estate is an industry that is not necessarily widely known and promoted.  Because of that, when some people hear the term real estate, they automatically think of a residential property.  Most likely, the reason for this is because much of the population has either directly or indirectly experienced facets of the home-buying experience.  On the surface, they may seem similar, but there are many, many differences between commercial real estate and residential real estate.  Let’s talk about some of them.  Welcome to your crash course – Commercial Real Estate 101.

 

“The main difference is…”

A property that provides a living space is considered residential real estate.  On the flip side, a property that is exclusively used for business-related purposes with the intention of generating income, is considered commercial real estate.  Commercial real estate is segmented into different niches to include retail, industrial, land, multi-family, mixed-use developments, and office.  The performance of commercial property, including sales prices and new building rates, are often used as a measure for business activity in a given market or submarket. 

 

 

“What is retail real estate?”

Retail properties are used to market and sell consumer goods and services. They range from shopping centers to individual stores and pop-up shops to big box stores like Saks Fifth Avenue and JCPenney.

 

 

“What is industrial real estate?”

An industrial property is a property that is used for the actual manufacturing of something.  It can either be considered a factory or plant.  These building types are usually zoned for light, medium, or heavy industrial.  This includes uses such as warehouses, garages, and distribution centers.

 

“What is land real estate?”

Land is real estate property, less buildings and equipment, which is designated by fixed, spatial boundaries.  Land ownership might offer the titleholder the right to any natural resources that exist within the boundaries of their land. 

 

 

“What is multi-family real estate?”

A multi-family property is any residential property that contains more than one housing unit to include duplexes, townhomes, apartment buildings, and condominiums.  These are some of the most common examples. 

 

“What is mixed-use real estate?”

Mixed-use properties or developments combine residential and non-residential buildings.  They can be a single building, multiple buildings, or an entire neighborhood.  Mixed-use developments provide ample access to community amenities and foster community involvement.  

 

 

“What is office real estate?”

Lastly, we have office real estate, which is what I focus on.  Office properties are occupied for a variety of different purposes.  Office users can engage in retail enterprises, services businesses, non-profit organizations, technology firms, etc.  Office can refer to entire buildings, a floor, parts of a floor, or office parks such as Concourse Office Park in Atlanta, GA featuring the King and Queen towers.  Office buildings are categorized by their height.

 

“How is a building defined by its height?”

An office building has less than 7 stories above ground level is classified as a low-rise building.  An office building that has between 7 and 25 stories above ground level, is classified as a low-rise building.  An office building that has more than 25 stories ground-level building, is classified as a high-rise building.  Office buildings are further categorized by class.

 

 

“What is building class?”

 

Class A – Building classes range from A to C and are determined based upon the physical and locational aspects of building.  Class A properties tend to accommodate users who need high-quality finishes and materials to attract a specific employee or customer.  The building is normally located close to amenities and prestigious areas.

Class B – With class B properties, they tend to be more functional and probably will be highly efficient.  They will be nice but cost-effect and sometimes building age considered when classifying a building.  If the building has high-quality finishes but the design is kind of dated, the building could be considered a Class B.

Class C – Class C Properties have physical, functional, and economic obsolescence.  They tend to be in less desirable areas they may not look very pretty, however, they normally have lower risk and can accommodate start-ups that need lower occupancy costs.