When you are kicking the competition’s butt, don’t stop kicking… part 2

In my last post I discussed an article by Pat Fox of the Atlanta Journal Constitution which highlighted Alpharetta’s tremendous success attracting lucrative technology jobs. There was also another article in the AJC about Alpharetta but unfortunately that one is not posted online so I contacted the writer, Rachel Tobin. Ms. Tobin graciously said that I could reprint the article here as long as I give the newspaper credit.

It is an excellent article so I am going to try something different today by posting the whole article with certain key phrases highlighted. After the article you can read my comments.

The big money still heads to Alpharetta
Top industries flock to hot office submarket.Besides company HQs, call and data centers also move into area.
Rachel Tobin / Staff

Thirty years after striking out to attract the executive set by building grand homes around bucolic golf courses and horse farms, Alpharetta has succeeded in its mission of also luring the companies that employ those executives. The result: Alpharetta is no longer just an enclave for well-heeled executives. It’s become a hub of call and data centers for Fortune 100s like Coca-Cola, as well as regional corporate offices for other companies with household names. Think Motorola, Philips, Comcast Cable, health care services firm McKesson Provider Technologies and information service Lexis-Nexis.

Despite the 40-minute-plus drive from Hartsfield-Jackson International Airport — and sometimes choking traffic — Alpharetta remains one of metro Atlanta’s most competitive office submarkets. It’s successfully been attracting — and keeping — some
of the nation’s hottest industries, from technology to health care. The city was anointed the country’s No. 1 “reloville” by Forbes in 2009. Rival office markets like Central Perimeter have lost big tenants to Alpharetta, which boasts office rental prices that are up to 10 to 15 percent lower.

With housing stock that goes from $85,000 starter homes to multimillion-dollar mansions, Alpharetta is not just for CEOs anymore. Alpharetta’s daily workforce now includes lower- to mid-level staffers at data and call centers as well as regional headquarters for internationally known companies.

Holder Properties has developed 20 to 30 data facilities in north Fulton, said Tim Bright, an executive vice president.
“Because so many data centers have gone there, others are going because of the critical mass of talent, intellectual expertise and vendors that service them, ” he said. “It’s the cool place to be.”

Sarah LaDart, a project manager for the North Fulton Chamber of Commerce and Progress Partners, an economic development group, said the area has “been very aware that not every job created in Alpharetta is a $200,000-a-year job. A stone’s throw from the chamber, we have homes that are $100,000.”

Adam Viente with Jones Lang LaSalle describes what he tells potential office tenants at Sanctuary  Park in Alpharetta: “We have million-dollar-plus homes and golf course communities, as well as entry-level housing. And every amenity you could imagine.”

One of those continues to be Alpharetta’s serene setting. On a recent day, traffic was stopped in Sanctuary Park as geese crossed the
road. One of the most popular features at the office park is its softball field, where 16 teams of tenants battle it out for the coveted end-of-season trophy. There’s also a foot path to Verizon Amphitheatre.

Still, “call center” is not exactly what some want the area branded for. “I hate the term because of the connotation that comes with it, ”
Viente said. What Alpharetta has are not sweat shops, where office workers in headsets are corralled into rooms handling difficult customers, then huddle at the exits for 10-minute cigarette breaks, he said. These are sophisticated call centers, he said, handling inside sales calls for companies like Coca-Cola.

Some, for example, are longtime engineers who help restaurants fix beverage machines, added Clint Howell, also with Jones Lang LaSalle, who manages Sanctuary  Park. Many are mid-career and high-paid, he said. “Coca-Cola’s isn’t a call center in the traditional sense of the word, ” Howell said.

One of Alpharetta’s strengths, said Chris Macke, a Washington-based senior real estate strategist with CoStar Group, is its ability to attract companies up Ga. 400 from the Central Perimeter, especially technology firms like Verizon, E-Trade Financial and AT&T that have built campuses in north Fulton.

Many of these businesses will fuel the economy for years, if not decades, to come, Macke said. The result is a stabilization on the north Fulton market, which was hurt when financial service and real estate firms, battered by the recession, shed staff and offices.

Estimates for north Fulton’s overall office vacancy rate vary. CoStar says it was 17 percent in the first quarter, compared to 12.7 percent at the end of 2007. Jones Lang LaSalle reported 19.6 percent for the first quarter, compared to Cushman & Wakefield’s 18.9 percent.

Only the Central Perimeter area and northwest Atlanta have more Class A office space than north Fulton, but North Fulton’s vacancy rate is 15.8 percent, which beats metro Atlanta’s Class A average by more than three points. Central Perimeter’s Class A vacancy
is 18.7 percent, while northwest Atlanta’s is 15.8 percent, according to CoStar.

To be sure, Viente said Class A suburban office buildings aren’t the same as the glittering skyscrapers from downtown to Buckhead. Most Alpharetta office buildings are four to six stories, surrounded by ample parking in manicured settings complete with lakes and waterfalls.

But the office parks and nearby lifestyle continue to be a draw.

“I’m happy where I am right now, ” said Dave Burr, who is consulting business leader for E-Trade Corporate Services, which has a campus on Windward Parkway. He started with E-Trade about two years ago and he loves the campus. “They keep remodeling it and adding more trees and scenery, ” Burr said. “It’s a really pretty office park to come to every morning.” Across the street, there are 10 restaurants, with dozens more a short drive away.

And he raves about another feature: a running group that meets after work Thursdays to take advantage of a nearby 14-mile path that winds through woods. Burr lives in Sandy Springs with his wife, a Midtown lawyer, and their three dogs. He said his commute is a breeze, though he admits his wife’s commute is not.

Clifton Camp, who owns MarketingCamp, a marketing and branding firm, often works from his five-bedroom home in north Fulton.
A Michigan transplant, Camp is on his fifth home since moving here in 2004, continually buying and selling homes after starting with a foreclosure in Country Club of the South. A major plus, he said, is the excellent school system for his three school-aged
kids. By not paying for private school, he said, “I can funnel those funds back into the household so we can have a few of the finer things in life. That is a plus.”

Still, all interviewed by The Atlanta Journal-Constitution for this story said that the lack of a rail system is north Fulton’s biggest challenge for both future growth and quality of life.

For Viente, that means a competitive disadvantage for Sanctuary Park. “Central Perimeter has four MARTA stops. We have zero. I think that is the biggest thing this submarket is facing, ” he said. He’d like to see a MARTA stop near North Point Mall.

One of the main jobs of Ann Hanlon, chief operating officer of the North Fulton Community Improvement District, is improving transportation. “The north Fulton area is pretty easy to get around within it, but it’s difficult to get to and from it from somewhere else in the region, ” she said. “It’s a challenge, especially when more and more of our leases are going to call centers, which is pulling employees from other parts of the region.” She said when gas prices skyrocketed a few years ago, she saw people walking
long distances from bus stops in hot temperatures. “It’d be 105 degrees outside and people were walking all over Alpharetta
from the bus stations, ” he said. “We said it’s just not practical.” Her organization, with the help of other groups, is studying transit options. “We’re trying to show the suburbs are ready for transit and make the business case for it and that we can’t live without it anymore, ” she said.

About our series
Metro Atlanta has been a master of reinventing itself ever since the Civil War. In the process, the region has become the undisputed capital of the South, a hub for Fortune 500 companies, with an airport that is the envy of the region. Through it all, landmarks have risen, some have fallen, others were saved and new ones were built. As Atlanta’s ambitions grew, so did unique areas with their own flavor and style, attractions and problems. This year, The Atlanta Journal-Constitution will embark on an occasional series to check on the skyline. We aim to examine the opportunities and challenges in business districts metrowide.

To send us your ideas for the series, please e-mail Rachel Tobin at rtobin@ajc.com.

The Atlanta Journal-Constitution, Main Edition
Sunday, 4/24/2011, Business, D1

The article is filled with interviews and data that show Alpharetta is kicking the Perimeter area’s butt in attracting technology jobs and corporate headquarters. Alpharetta has higher office occupancy rates and people that have relocated their businesses and families here applaud our quality of life, serene setting and outstanding public schools.

Yet somehow the article concludes that Alpharetta needs to be more like Perimeter Center because, “Central Perimeter has four MARTA stops. We have zero.”

It makes sense that the commercial property owners of the Northpoint CID covet the higher rents of the Perimeter area and it is clear they are pressuring our city council to allow more condos and apartments to accomodate MARTA trains.

But Alpharetta is not like Perimeter Center. That is the key to our success. In the words of Ms. Tobin:

“Thirty years after striking out to attract the executive set by building grand homes around bucolic golf courses and horse farms, Alpharetta has succeeded in its mission of also luring the companies that employ those executives”

Alpharetta’s strategy is working. We are kicking the Perimeter area’s butt. Why should we stop kicking to copy them?

When you are kicking the competition’s butt… don’t stop kicking.

***A special thank you to Rachel Tobin of the AJC for writing an excellent article and allowing me to use it here.***

6 thoughts on “When you are kicking the competition’s butt, don’t stop kicking… part 2

  1. Jim,

    My pleasure (and that of the AJC’s). I have a question about your post. Is your point that your area doesn’t necessarily need MARTA/rail transit? If so, that’s interesting! Are you talking to the folks on the CID and other leaders and making your voice heard? Those whom I interviewed seemed pretty keen on seeking rail. What are you thoughts on that?

    Best of luck. Great blog.
    Rachel

  2. This looks to be the kind of info the Chamber and the CID is pushing to the media (one of the goals of their Progress Partners program, as I understand it).

    Rachel, read what Jimmy’s written here on his blog and the other Alpharetta-based blogs about MARTA rail expansion into north Fulton. Don’t want to rehash a lot of it here.

  3. Rachel,

    Thank you for your kind words.

    You are correct that I don’t think Alpharetta needs MARTA rail. A lot of people that actually live in Alpharetta don’t want anything to do with a MARTA station and the traffic congestion it will bring as residents from all over drive through our neighborhoods to catch trains. Look what MARTA did to Perimeter. They have 4 MARTA stations and traffic is worse now than it ever was before.

    The other problem with MARTA trains is that the density of housing needed to support a MARTA rail system (as represented in the Northpoint LCI) would decimate Alpharetta as we know it. Goodbye great schools. Goodbye quiet setting. Goodbye geese crossing the road.

    The Alpharetta City Council is well aware of my views and they know I am not alone. Members of the CID board and staff are also aware of my views but since few of them actually live in Alpharetta they couldn’t care less.

    I know commercial real estate is your beat but if you really want to hear what the people who live in Alpharetta think about trains you should try the PTA instead of the CID.

    Or…. just keep reading GA Jim and I promise to keep you in the loop!

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