Brian Bollins
Atlanta Vice President and Division Manager
Choate Construction Co.
As Georgia marks its tenth consecutive year as the nation’s top state for business, Bollins says the influx of domestic and global companies moving in has kept contractors busy.
“In the heart of it all, Atlanta’s AEC industry is enjoying the benefits of this influx via the resulting demand for new projects to further develop the city and accommodate this growth,” he says.
Ranked by Area Development magazine, which tracks corporate site selection and economic development, Atlanta scored highly on more than a dozen factors that businesses find important when deciding where to locate. These include ability to hire and train the right people as well as the ease and speed of proceeding with a new project. This performance builds confidence for companies looking for space and fuels the resulting projects in the region. With Hartsfield-Jackson Atlanta International Airport being one of the busiest airports on the planet and with the state having one of the top ports in the country, Atlanta has all the ingredients for companies seeking to grow, says Bollins.
“It’s not just U.S.-based companies, either,” he says. “Thanks to substantial investments from corporations and municipalities alike, these two major hubs have attracted more foreign investment for the very same reasons driving domestic companies to Atlanta: the logistics potential, accessibility to the global market, a highly educated workforce and energy reliability and costs.”
When those ingredients are thrown into the mix along with the relatively low cost of living among American metro areas, Bollins says it’s no surprise that the result is an impressive growth trajectory for the Atlanta market. As a result, the AEC industry is buzzing with the demand for new development in the city and across the state. That new development is headlined by the city’s most active sectors: manufacturing, data center, entertainment/film, supply chain management, retail and health care, he says. Atlanta has been hard at work bolstering that growth and supporting its by-products, like affordable housing, he adds. The city is investing millions in public and private dollars in incentive programs to construct affordable housing, but there are obstacles. The high need and readily available incentives for affordable housing developments offer opportunities for some firms to take advantage of the situation by working quickly and cheaply, which Bollins says could result in problems for the community and city later.
Another trend emerging in the Atlanta market is what Davis Myers, Choate’s director of business development for Atlanta, calls “office hopping.” As companies’ leases expire, they seek out better rather than bigger office spaces. That trend, allied with the rise in work-from-home jobs following the COVID-19 pandemic, has left corporate office spaces vacant. The result has stacked the deck in favor of businesses looking for new headquarters with more amenities.
And following the initial slowdown in construction activity brought on by the pandemic, Atlanta AEC firms saw a “boomerang-like effect” as demand for commercial construction returned in full force, even surpassing pre-pandemic levels, Bollins says. Since then, activity has slowed to a more sustainable pace.
Today, Atlanta is seeing more diverse construction projects as companies move farther away from traditional office spaces and more toward experiential, multi-use and mixed-use retail/office developments.
“We’re seeing this trend extend beyond downtown high-rises and into the entertainment industry, as companies are building larger, more robust campuses to hold their film and studio productions,” Bollins says. “These projects are incorporating walking trails and dining options into the design, creating what is essentially a community within a community.”
Office vacancies bring a subsequent rise in the sublease market while many Class B and C properties have debt maturing in an environment set to make it difficult to recapitalize, he says, presenting a challenge and opportunity for the local market to reimagine what those office buildings can be. Ground-up development in a number of Atlanta markets could soon see challenges from rising interest rates, leveling or decreasing rents, declining property valuations and current construction pricing. He doesn’t expect to see a change in the trend of retiring workers outpacing new hires. Going the extra mile to nurture good relationships with peers and find more opportunities to work together will be key to helping trade partners shoulder the brunt of the shortage, Bollins says.