I recently heard famed urbanist Richard Florida speak about the rise of the creative class. He claims creative people want to be around other creative people—to live closer together, to spend less time in their cars and to partake in convenient amenities.
This trend is manifesting itself in urban areas in the form of high-density, mixed-use developments. It is also happening in the suburbs of metropolitan areas, which have grown up around what were once fairly rural downtowns. In the Atlanta metropolitan area, several edge cities are working hard to create an attractive “sense of place”. Also, several suburban communities have incorporated to take advantage of this trend. Let’s look at a few examples in Atlanta.
Living on the Edge
You probably already know their names. Dunwoody, Sandy Springs, Roswell and Alpharetta all rank as Atlanta’s edge cities. Let’s start with Sandy Springs as I have been a resident there for over 20 years.
Sandy Springs, which incorporated 10 years ago, is in the process of developing a new city center complex called City Springs. The city center includes a Civic Center building, which will house City Hall services; a Performing Arts Center; a Studio Theater/Meeting Place; Retail Spaces; and a City Park. Not only will this development have a residential component, but properties around the project are being purchased and redeveloped or renovated to create a vibrant downtown. With a population of 100,000, Sandy Springs can certainly support this type of development.
City Springs will enable Sandy Springs residents to conduct business, shop, dine, entertain and be entertained, in their own community.
Alpharetta is another example of a suburb going urban. With a population of 60,000 and named the 6th fastest growing city in the US in 2012, the city recently unveiled the Alpharetta City Hall, the centerpiece of its new downtown development, Alpharetta City Center. The vision includes a new Fulton County Library, 5-acre Public Park, Town Square, Restaurants, Retail, Class A Office, Luxury Apartments and Single-family Homes.
In Alpharetta, another city-center type development is already well underway only a mile from downtown. It’s called Avalon and offers retail, dining, office, residential and amenities. The overall vision for Alpharetta is to develop the land between the downtown city center and Avalon.
With both projects coming online, Alpharetta residents have effortless access to city-like amenities, but are able to reside within the lower costs and relative ease of suburban living.
Why Does This Trend Matter?
So, this trend is very interesting, but what does it have to do with PREF? Trends like this one create opportunity and drive our investment strategy. At PREF, we consistently look for undervalued niche properties near emerging city centers or new mixed-use developments and market drivers.
Here are two examples:
- PREF purchased a warehouse near the former General Motors (GM) Doraville plant, a 165-acre site soon to be transformed into Assembly, an expansive mixed-use property, including business, residential and parks.
- PREF also bought a small building in a 35-year-old office park currently experiencing a surge in residential development; new retailers associated with SunTrust Park located a mile away; and a huge public investment in transportation infrastructure.
We have always only purchased properties with a story. I am self-admittedly picky in this regard. If the property doesn’t have a story, then it’s just a commodity—and that’s not what we do.
Right now, there are three trends creating opportunity and driving our investment strategy:
- Development of new city centers in the suburbs
- New, large mixed-use developments near the urban core
- Gentrification and re-positioning of older neighborhoods and commercial districts
These trends are certain to bring people closer together, subtract more cars from the equation and deliver an abundance of amenities—from the city to the edge.