Downtown Atlanta's office market has struggled for decades, with many choice tenants fleeing to new buildings loaded with amenities in the Midtown, Central Perimeter and Alpharetta markets.
That narrative, however, can change if some initiatives now underway pan out, according to Chris Ahrenkiel, a veteran of the city's commercial real estate community who was recently named managing principal of Cushman & Wakefield's Atlanta office.
New apartment buildings that are poised to serve as a precursor to office development at CIM Group's $5 billion Centennial Yards project will almost certainly be a success, Ahrenkiel told CoStar News. Recent economic figures for the broader Atlanta office market, compiled by CoStar, also offer positive indications. And the city government and the Metro Atlanta Chamber are working to spearhead improvement efforts.
"I'm not blind to the issues that are present downtown," Ahrenkiel said. "But I'm confident in [Mayor Andre Dickens] and the city council and the Destination Downtown committee and the amount of time and focus that's being spent on making downtown better."
The 49-year-old Ahrenkiel is expected to join Cushman on Oct. 1, where he will report to Victoria Malkin, president of the brokerage's Americas markets. Ahrenkiel will succeed Tyler Courtney, who left earlier this year to become executive managing director of national brokerage at Lincoln Property Co.
Ahrenkiel will depart Selig Enterprises, an Atlanta-based company that developed the Google-anchored 1105 W. Peachtree in Atlanta and still owns a substantial amount of property in Midtown Atlanta that's ripe for development. Ahrenkiel is executive vice president and head of Selig's office division.
Selig and Cushman have a long working relationship, and Ahrenkiel expects that to continue.
"We're not competitors," Ahrenkiel said. "We're complementary to each other."
Prior to joining Selig, Ahrenkiel was a managing director for Tishman Speyer in Atlanta. He has degrees from the University of Georgia and Georgia State University.
City leaders are pushing to upgrade downtown Atlanta ahead of the 2026 FIFA World Cup, when Atlanta's Mercedes-Benz Stadium is scheduled to host several matches. But it's unlikely the downtown office market will substantially improve in time for the soccer tournament, as some of the best-known office towers in downtown Atlanta struggle to find tenants.
Six buildings at the landmark Peachtree Center complex were listed for sale in August, covering about 2.5 million square feet. Vacancy rates for the towers range from 27.4% to 79.6%, according to CoStar data. The owner of the 55 Allen Tower office building, the last trophy office tower to open downtown, returned the property to its lender this year.
But the broader Atlanta office market is gradually recovering from the pandemic. Several prominent areas in metropolitan Atlanta have experienced a reduction in available space because of corporate relocations, adaptive reuse projects and a lack of new construction, according to CoStar data.
CIM Group's Centennial Yards is expected to lure new residents to the downtown core — a necessary step for the recovery of the district's office market, Ahrenkiel said. Centennial Yards is next to three major tourist destinations: Mercedes-Benz Stadium, State Farm Arena and the Georgia World Congress Center convention center.
"There is enough stadium business and the experience of those events and people wanting to stay late or early after those events" that Centennial Yards is going to be successful, Ahrenkiel said.
"It's going to be similar to what you've seen at The Battery," he said, referring to the mixed-use development that surrounds the Atlanta Braves' baseball stadium.
The Battery includes restaurants, retail, apartments, offices, hotels and entertainment venues that complement Truist Park, the Braves' stadium.
An additional piece of the puzzle could be the development of new buildings, Ahrenkiel said. The city is near a 20-year low in terms of new office space under construction. However, companies continue to move to Atlanta and hire new employees.
"Atlanta is a growth market and people and companies continue to move here," Ahrenkiel said. "As the economy gains more certainty, and the supply of new office buildings is fixed, that's a good recipe for the office market."
Cushman has about 545 employees in Atlanta, including 75 brokers. About half of the Cushman workforce in the city is assigned to 1180 Peachtree in Midtown, with the remainder scattered in various buildings around the area.
Cushman's operations in Atlanta include occupier services, asset services, project development services and property management.