The office market’s upheaval since the pandemic has forced landlords and tenants to improvise. The moves including offering subleases to converting half-empty office buildings into apartments and hotels.
Jonathan Rodbell decided his firm needed to improvise, too. Primarily an investor in the office and industrial sectors, Atlanta Property Group recently expanded its property management business.
It’s a revenue-enhancement play for APG, Rodbell said, but it emerged from seeing landlords of older buildings struggle to adapt to the office market’s new normal. Rodbell thought APG could provide some needed assistance.
"Whether a property is 90% leased or 70% leased," or even less, "someone still has to take care of the building," Rodbell told CoStar News.
“We can take care of the tenants, make recommendations for vendors, help lease the building, strategize the market rates,” but without acquiring the property, Rodbell said.
“Others might just hire us to collect the rent,” said Rodbell, who got into the real estate business in the mid-1990s when he worked for JMB Realty Corp. of Chicago.
Rodbell has firsthand experience with repositioning office properties. Atlanta Property Group developed an expertise in and reputation for buying older, well-located Class A and Class B office properties in and just outside of Atlanta and investing capital to make them more competitive with newer product.
APG purchased several office properties in metro Atlanta including the four-building Palisades Office Park in the center Perimeter market, Overlook 1 in the Vinings neighborhood and the two-building Ameris Center development in Buckhead and spent money to modernize them. The firm also has purchased several industrial properties in the Atlanta market and the Southeast.
APG's new property management focus will also include providing more construction management and leasing services. Austin Chase, managing partner, will lead APG's services expansion in the business line that creates recurring revenue for the provider.
The 50-year-old Rodbell co-founded APG in 2003 with former Lowe Enterprises executive Court Thomas. Rodbell was previously an executive at Apex Supply, an Atlanta building products distributor his family founded in 1949 and sold to Home Depot in 2000.
When APG reconfigures outdated properties to make them more appealing, Rodbell said, the firm often incorporates ideas such as adding solar panels to a 1980s-era office complex in Atlanta.
It’s a way to make use of buildings that are in perfectly good condition without proceeding down the expensive road of demolition and new construction, he said.
That’s the office market segment APG will target for its expanded property-management services. APG owns a portfolio of buildings dating to the 1980s and 1990s that aren’t considered top-shelf properties. It’s an area the Big 3 of office property management — CBRE, JLL and Cushman & Wakefield — tend to neglect, he said.
“But we’re not limiting ourselves to just Class B and Class C buildings,” Rodbell said. “There are a lot of Class A buildings that aren’t considered trophy office buildings,” including One Ameris Center, where APG’s office is located.
A recent example of APG’s property management work is a building it sold in 2018, Peachtree 25th in the South Buckhead area of Atlanta. The new owner, Noro Management, “felt they weren’t getting the attention they needed” from their previous property manager, Rodbell said.
Since APG was familiar with the property, it took the assignment in November 2022. It’s acting as the leasing agent, improved relationships with tenants and scheduled weekly food trucks while the building’s café gets an overhaul.
“They reached out to us and said they felt like they needed to make a change,” he said. “Every building needs to be managed professionally whether it’s distressed or not distressed.”