The opening of the Atlantic Station mixed-use project in 2005 showed Atlanta how the concept of a self-contained village of homes, shops, offices and restaurants could succeed. It turns out that now, 20 years later, plenty more developers think it's a good idea, too.
Atlantic Station came to life after the conversion of a former Atlantic Steel mill site about 4 miles north of downtown Atlanta, marking a milestone in local commercial property by reviving a section of the city. What had been industrial ruins cut off from the rest of Atlanta is now a collection of office towers and retail buildings, connected to Midtown Atlanta by a brightly colored yellow bridge spanning the Downtown Connector interstate highway.
It opened up a new part of Atlanta to development, the West Midtown district, that had been home to "a landscape of underutilized properties with limited connectivity and investment," said Vikram Mehra, senior managing director at Hines, the property manager for Atlantic Station.
In a way, Atlantic Station is a victim of its own success, facing added competition from other developments that sprang up in its image. At the same time, its popularity shows how successful projects can influence development patterns throughout a city.
Atlantic Station remains a magnet for visitors, and its lineup of retail tenants, including apparel retailers H&M and Old Navy, as well as sellers of personal care items like Bath & Body Works, Sephora and Victoria's Secret, has remained solid even with some departures over the years.
A handful of nearby developments have benefited from proximity to Atlantic Station. That includes Star Metals, with an office tower occupied by online gambling provider PrizePicks and other tenants, and The Works, a 1950s industrial building converted into offices for Google, as well as shops and restaurants that complement its residential component.
"Live, work, play was the slogan of the real estate universe for a long time," said Henry Poer, senior vice president and Atlanta co-market leader at SRS Real Estate Partners, who has represented clients in retail leases at Atlantic Station. "I would argue it still is extremely relevant. Atlantic Station provided a blueprint for all three phases in an urban location."
It may be a local development trailblazer, but Atlantic Station still faces the headwinds of any property with some retail. That includes the upcoming departure of two tenants: a Publix supermarket and shoes and apparel retailer DSW. A Publix spokesperson confirmed with CoStar News that the Atlantic Station store will close on Dec. 27, but didn't specify the reason behind the closing. Designer Brands, the parent company of DSW, did not respond to CoStar News' requests for comment.
West Midtown momentum
Hines is expected to find replacement tenants soon, however, helped by the area's popularity, said Mark Toro, founder and principal of Alpharetta-based Toro Development.
"The momentum you see in West Midtown today is unquestionably linked to Atlantic Station's early role as a catalyst for change," Toro told CoStar News.
Toro's previous firm, North American Properties, and partner CBRE repositioned Atlantic Station between 2010 and 2015 by renovating retail spaces and prioritizing its outdoor and public spaces to attract more events and visitors. Atlantic Station now attracts more than 1 million visitors yearly. Toro is no longer involved with Atlantic Station.
In other parts of the Atlanta area, similar mixed-use developments like The Battery, a community of apartments, offices, restaurants and hotels that surrounds the Atlanta Braves' baseball stadium, and Avalon, a mixed-use development of residences, offices and a hotel located in the northern suburban city of Alpharetta, have also been successful. They are similar to Atlantic Station in that they combine a mix of residential and commercial uses in the style of a planned community.
"By elevating the public realm and using the district as a living lab, we incubated the elements that have since become our signature approach, including valet and concierge service, curated music and lighting, a robust calendar of activations and events," Toro said.
Despite Publix and DSW vacating, Atlantic Station still has popular retailers, including a 366,000-square-foot Ikea and a 148,200-square-foot Target. Other retailers include a 284,250-square-foot Dillard's department store.
Development spans restaurants, offices, apartments and hotels
A scattering of restaurants helps keep shoppers in the Atlantic Station neighborhood, too, among them Hobnob Neighborhood Tavern, California Pizza Kitchen and Yard House.
In addition to retail, Atlantic Station also has several office towers, apartment buildings and two hotels.
The Publix and DSW departures are relatively small in the grand scheme of the 523,511-square-foot Atlantic Station development.
DSW occupies a 30,000-square-foot space, and the Publix store is 17,871 square feet, considerably smaller than most Publix locations. Hines declined to provide a figure on the total percentage of retail space leased at Atlantic Station.
"Tenant shifts are natural in established mixed-use districts, often creating opportunities to refresh offerings and align with evolving consumer expectations," said Mehra, the senior managing director at Hines.
"In Atlanta, desirable retail space is extremely limited," said Poer, the broker with SRS. "Atlantic Station will have no shortage of quality retailers to choose from if they have vacancies."
For the record
Nick Garzia, senior director at Hines, leads retail leasing for Atlantic Station.