Multifamily to Rise at Prominent Buckhead Office Project
Mill Creek Residential Closes on Land for 320-Unit Mid-rise Community at Piedmont and Lenox
Nearly 20 years after the first office tower was built at Prominence in Buckhead, the second one is about to start. But it won't be an office tower as originally planned; it will be a multifamily community.
Mill Creek Residential, of Dallas, plans to develop 320 multifamily units in six-story buildings that will include a maximum of 45,000 square feet of commercial uses wrapped around a central parking structure, according to plans filed with Livable Buckhead and the Buckhead Regional Development Committee.
Mill Creek closed June 7 on the site at Prominence. It paid Crocker Partners LLC $9.2 million for the site. Crocker acquired the site from Equity Office Properties/Blackstone for $5 million in 2012, according to Fulton County records.
That Mill Creek will move forward with the new community, named Modera Prominence, shows that Buckhead's multifamily building boom, which slowed somewhat earlier this year as new starts dropped off, has some life left. The last major apartment development to start in Buckhead was Related Co.'s Icon Buckhead, a 35-story tower rising rapidly at Peachtree and Stratford roads. Icon is expected to be completed in the second quarter of 2019.
Mill Creek itself is wrapping up Modera Buckhead, a 21-story, 400-unit apartment tower that opens late this year at Peachtree and Pharr roads.
Buckhead remains a multifamily stronghold, despite some fraying caused by heavy development activity, because the submarket "is a magnet for well-educated, young professionals and the metro's more affluent residents," CoStar Senior Market Analyst Ben Braley said in the recent Buckhead Multifamily Submarket Report. "This population base supports one of the highest concentrations of 4- and 5-star apartment stock in the metro, and job growth has surged this cycle."
The Buckhead Development Review Committee has recommended approval of most of the variances Mill Creek applied for, and asked that the developer decrease the transparency of the project's glass exterior.
Buckhead's overall multifamily inventory grew more than 30 percent in the past five years, with 4- and 5-star supply jumping 55 percent, according to CoStar. "Deliveries on this scale have naturally forced vacancies higher and hurt rent growth," CoStar's Braley said. "But even with rising competition from surrounding submarkets and a wave of deliveries expected to temporarily stress fundamentals here, demand for high-end rental product in Buckhead will always exist."
The average rental rates at Buckhead's newest luxury apartments increased to $2.20 per square foot, highest in metro Atlanta.
Despite the emergence of concessions, such as four to six weeks of free rent, and rent growth that's stagnated, investors still seek Buckhead multifamily when buying, Braley said.
Prominence is home to a 19-story, 422,439-square-foot office tower built in 1999. It also was home to the now-closed Roy's Hawaiian restaurant.
When Atlanta's Holder Properties and Sam Zell's Equity Office Properties developed Prominence in Buckhead in the late 1990s, they planned to develop two office towers at the high-profile site near Ga. 400. Two decades later, the second site will become Modera Prominence, which SK+I Architects of Bethesda, MD, designed.
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