In Midtown Atlanta, a new generation is discovering Colony Square for the first time. They are meeting dates at the “secret bar.” laughing with friends at comedy nights, playing drag bingo under the stars, and gathering with their community. To them, Colony Square is a hotspot that’s showing up all over Instagram. In reality, Colony Square could be twice their age and has long been an office destination; it was just hiding in plain sight, as one twentysomething recently put it.
In 2015, North American Properties acquired Colony Square with bold plans to tear down the old office atrium and food court, double the amount of open space, and introduce resort-level hospitality, entertainment, and dining to the property. Prior to the redevelopment, the 50-year-old Colony Square encompassed 700,000 square feet (65,031 sq m) of office space and 140,000 square feet (13,006 sq m) of retail.
We invested in about 25 percent of the property, primarily at the street level and through the addition of two smaller office buildings. Remarkably, the other 75 percent of the property, the majority being the original office space, saw little investment yet a valuation lift. Since our acquisition six years ago, office rents at Colony Square have increased by 66 percent. This is double the rate of Midtown’s Class A rent growth, according to Cushman and Wakefield.
We attribute the increase in office rents largely to our investment at the street level. Prior to redevelopment, Colony Square was like a concrete compound. We opened up the insular design, making it more walkable by knocking down walls and creating several green spaces that are programmed with more than 200 events per year.
Art and technology were incorporated, with stunning wall murals, interactive lighting, functional sculptures, a massive LED screen and several transit screens. A concierge that offers office tenants and guests five-star services, ranging from restaurant reservations to even marriage proposals. We brought in a modern retail mix, including IPIC Theaters, the Politan Row food hall, chef-driven restaurants, and service retailers, creating a new community gathering place for Midtown.
While other landlords are attempting to motivate people to come back to the office, Colony Square is saw more foot traffic in 2021 than it did in 2019. The same new generation mentioned above is part of a competitive talent pool in Atlanta. Employers recognize that Colony Square is where this young and talented cohort spends their time, and they are eager to office here to support their recruitment and retention goals. They want to align their company culture with that of Colony Square’s to gain a competitive edge in today’s war for talent.
Grocery chain Whole Foods, owned by Amazon, signed a lease at Colony Square for its new South Regional Office. Regional president Bobby Turner had this to say about the move: “We wanted an office in an urban, creative community that celebrates food and offers our team members a collaborative workspace and a variety of mobility options. We also appreciate that Colony Square offers team members opportunities to enjoy the space as more than just a work environment.”
Walk around Colony Square today and you’ll find a diverse community of people who are all looking for social interaction. They see Colony Square as a place where serendipitous conversations happen and memories are made. Whether they are working with their laptops off to the side or meeting their besties for brunch, they are making up for lost time and happy to be around others after over a year of isolation.
Our work to reimagine this 50-year-old property into an open and inviting gathering place has created tremendous value for the office real estate above, and we are applying a similar investment approach at other commercial developments around the country. No matter the real estate mix or location, our goal is the same: To create a gathering place for the community. For others in our industry who are wondering how to drive office real estate value in this new era of remote work, we encourage you to look out your window and consider what it would take to create a place for your community to gather.
ADAM SCHWEGMAN is a partner and senior vice president of leasing at North American Properties.
— Mark Toro (@MarkToro) January 19, 2022