How A $144 Million Transaction Can Help Turn Piedmont Road Into A Tech Corridor
Taking Buckhead’s Piedmont Road from traffic-choked cut-through to walkable, urban tech corridor is closer to reality.
The Ardent Cos. announced today it has bought another set of buildings at Piedmont Center, where aging mid-rises and surface parking lots have stood since the 1970s as a reminder of Buckhead’s suburban past.
The development is in the midst of a transformation that is part of a steadily changing Piedmont Road.
Ardent’s latest acquisition likely hastens that process. It closed on five more Piedmont Center buildings (1-4 and 15) for $144 million, or $175 per square foot. Last year, it acquired buildings 9-12 for $76.5 million.
It now controls nine buildings and 63 percent of the project, which has become a draw for technology tenants seeking affordable alternatives to the trophy Buckhead towers on Peachtree renting for at least $40 a foot.
Piedmont Center offers rents at least 30 percent lower than the top of the market, an important consideration for young companies trying to grow in pricey Buckhead.
“We will continue trying to re-brand this as a niche for tech,” Ardent’s Managing Director Scott Werbel told Atlanta Business Chronicle today.
A potentially bigger story is how Ardent and the tech companies it’s attempting to lure may end up changing the character of Piedmont Road, which is still dotted with large surface parking lots and tiny strip malls.
Ardent is interviewing architects and urban designers that will help it form a new master plan for Piedmont Center that should improve its connectivity to surrounding developments and the nearby PATH 400 trail. For Piedmont Center, the multi-use trail creates a connection for pedestrians and cyclists to the Buckhead MARTA station and the restaurants and shopping in big mixed-use projects such as Tower Place and Terminus.
PATH 400 is also a connection to Atlanta Tech Village, the centerpiece of what’s unofficially being called the Piedmont Technology Corridor. It’s an idea Atlanta Tech Village creator David Cummings has seen the potential in for years.
“I believe this is another indication that it’s coming together,” Cummings said of Ardent’s plans.
Piedmont now has technology companies occupying office space from the trophy projects along Peachtree such as Terminus to more affordable options at Piedmont Center.
Those companies are turning the corridor into “a center of gravity for tech,” Cummings said.
Denise Starling, executive director of Livable Buckhead Inc., said Buckhead is attracting more tenants that want alternatives to the car. Ardent complements that trend.
“To see them looking at the project holistically is fantastic because it has been challenging in the past,” she said.
The project should play a key role in the area’s transformation.
Ardent has set aside more than $40 million for tenant and capital improvements, such as turning the spaces into loft offices and finding more ways to connect the different buildings to the PATH 400 trail and other nearby projects such as Prominence, Werbel said.
“We are talking to all of our neighbors,” he added.
The latest acquisition of Piedmont Center buildings was led by Werbel and Ardent Director Ross Mehlman.
The seller, Northwestern Mutual, was represented by Cushman & Wakefield’s David Meline, Stewart Calhoun and Samir Idris.
Gil Burstiner at Hartman Simons represented Ardent in the purchase.
Financing was provided by KKR.
Commercial Real Estate Editor
Atlanta Business Chronicle
From the Atlanta Business Chronicle: https://www.bizjournals.com/atlanta/real_talk/2017/08/how-a-144-million-transaction-can-help-turn.html