Bright future for Atlanta's urban core
The Urban Land Institute released its annual report on emerging trends in the country's real estate market today.
While things look bleak for Atlanta now, that isn't the case for the long term.
First, the obvious.
Commercial real estate investors and professionals think it's one of the worst markets the country has ever endured, even worse than the savings and loan crisis of the early 1990s, according to the report released today by PricewaterhouseCoopers LLP and the Urban Land Institute (ULI).
Those responding to the ULI survey expect commercial real estate vacancies to increase, rents to fall across all property sectors before hitting bottom in 2010, and value declines of up to 50 percent from the peaks just two years ago.
If you're an investor with cash, you're in the driver's seat.
If you're a developer, you're waiting for 2011, when banks might be willing to lend again.
If you're a building owner, you're doing everything you can to create cash flow on your properties and hold on until the job market rebounds.
The analysts with ULI and Pricewaterhouse had some interesting things to say about Atlanta.
First, they see Buckhead as one of the most overbuilt office markets in any U.S. city.
No surprises there.
But, Jonathan Miller, who has authored these ULI reports for the past 17 years, said there is good news for Atlanta's office and housing centers inside the Perimeter.
Miller said, "a major shift is under way" from fringe developments on the outskirts of the city to more in-fill developments that will help define the city's urban core.
"Governments are getting behind this," he said. "It's going to be a real boon for the urban core, which is going to evolve for the next 10 to 20 years."
He said Buckhead, Midtown and downtown each stands to benefit from that trend.
Miller also said areas of the country that have planned for mass transit will be better off.
The issue for Atlanta's northern suburbs is transportation.
"The question for these areas is can they cut commute times and energy costs," Miller said.
"It appears Atlanta is thinking about these issues," he added.
Miller also said a commitment to in-fill development and a healthy urban core is "better for the entire Atlanta market over time."
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