ATLANTA—Brian McGowan has only lived in Atlanta for four years, but he has become one of the region’s biggest fans. (Of course, as executive vice president and COO of the Metro Atlanta Chamber, he is paid to do just that.) McGowan enthusiastically painted a picture of the regions’ economic development prospects during his keynote remarks at RealShare Atlanta on April 30.
“We have a great story to tell,” McGowan said. “I love selling Atlanta around the country.”
McGowan’s previous economic development posts include serving as Assistant US Secretary of Commerce and as California’s Deputy Secretary for Economic Development and Commerce, the top economic development position in that state.
Noting that an economic development publication recently ranked Georgia as the No. 1 state to do business, McGowan contrasted his current job with a similar position he held in California several years ago. He also touted the fact that Georgia added 90,000 jobs last year, ranking it No. 1 among states for percentage of jobs added.
“It’s a lot easier to be an economic developer in this state than that state [California], McGowan said. “It’s as if someone two years ago flipped a switch. It’s really an exciting time to be in Atlanta.”
The job-creation momentum is expected to continue in 2015 with projections of 78,000 new jobs. McGowan said the Metro Atlanta Chamber has shifted its goal from just recruiting companies to also focus on innovation and entrepreneurship.
“We’re connecting entrepreneurs with big companies and making sure we are doing everything we can to bring more venture capital into the market,” he said.
The region’s biggest challenge, he said, is making sure it develops a “world-class” work force. The Metro Atlanta area also needs to build on its biggest logistics asset, Atlanta Hartsfield-Jackson International Airport, to become an even bigger logistics hub. Atlanta also should work at improving its image as an international city, he said, noting that the region is home to 67 full and honorary consulates of other nations, but is not generally considered to be among the world’s great international cities.
Another huge challenge: transportation. Atlanta is known for its horrible traffic problems. The Georgia Legislature approved $900 million in its recent session to address transportation, but McGowan says that is only a good start and much more is needed.
Access to transportation was among the issues tackled by a panel on Atlanta’s multifamily development scene. While many millenials seek walkability when choosing a place to live, the Metro Atlanta area remains largely wedded to automobiles. Todd Oglesby, managing director of Alliance Residential Company, noted that one of the biggest amenities a multi-family project can have is proximity to a MARTA (transit) station. “Atlanta is still a car town,” said Oglesby, “Investors don’t believe we can cut parking ratios. Transportation is a huge issue. We’ve got to do a much better job of building light rail and expanding MARTA to compete with other first-tier cities.”
It seems all sectors of commercial real estate construction are affected by competition for labor. Allen Holloway, director of real estate investment for Batson-Cook Development Co., voiced a familiar concern heard throughout RealShare Atlanta sessions: an acute shortage of skilled construction labor in the Atlanta market.
“The new Falcons stadium and the new Braves stadium are sucking a lot of resources out of the market,” Holloway said. “Some of the smaller regional markets in North and South Carolina and Tennessee are also sucking labor from the Atlanta market. We are competing for labor more regionally now than city-specific.”
Gary Goodman, senior vice president of acquisitions for Passco Cos., said multi-family development is starting to circle back into primary markets like Atlanta after a period of secondary-market development.
“We are looking for properties in suburban areas,” he said. “We think it’s underserved. We bought a property in in Kennesaw late last year. It’s a rand new property that you can’t replicate in that market.”
Kennesaw, located about 25 miles north of downtown Atlanta, was cited as one of the area’s top markets. “Kennesaw is blowing up,” said Tyler Averitt, managing director of Multi Housing Advisors.
Attracting tenants requires the right mix of amenities, which has to be balanced with the costs involved, panelists said.
“We look at the capital value of anything we put into a deal,” said Nathan Hedges, director, development for Coral Gables, FL-based real estate firm Allen Morris, which has several mixed-use projects under way in Atlanta. “A closet system that can improve our rents by two cents per square foot has a value of $2,300. “We have to deliver and execute a product that is very compelling for the renter. Our biggest cohort is millenials ages 27 to 33 who are single and professional and have strong incomes, but not great incomes.”