No Downturn for 'Hotlanta'

Atlanta Staying at Top of Southeast Construction Markets

By Bea Quirk

From public works to robust private development in the city's urban core, Atlanta contractors are staying busy keeping up with the regional market's demand.

In addition to the more than $10 billion being spent on improvements to the Atlanta area's water and sewer system and an expansion of the Hartsfield-Jackson Atlanta International Airport, there are scores of institutional projects in health care and education, a steady crop of high-rise condos in the urban core and a continuing resurgence in the office market.

"It's as good as anyone can remember it - in all sectors," said Mike Dunham, executive vice president of the Georgia branch of the ACG of America in Atlanta.

"Corporate profits are on the rise, and Atlanta is perking along very well," said Millard Choate, president of Atlanta-based Choate Construction Co. "And it's extremely diversified. There has been a pent-up demand in many sectors that's finally coming out."

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According to McGraw-Hill Construction, Atlanta is the top-ranked nonresidential market in the four-state Southeast Construction territory of Florida, Georgia, North Carolina and South Carolina.

For example, Choate has recently finished work on a 150,000-sq.-ft., six-story office building at Sanctuary Park and will begin work on another one soon.

Sitework recently started on Cousins Properties' Terminus 200 project, a 22-story, 520,000 sq.-ft. building scheduled to open in mid-2009. The Atlanta-based developer is starting construction about 18 months earlier than planned because of the strong leasing at Terminus 100.

Office space can also be part of mixed-use developments. Hardin Construction Co. of Atlanta broke ground in March on the $259 million 3343 Peachtree project in the Buckhead area.

The Regent Partners project features a 48-story tower that will include 500,000 sq. ft. of office space on 19 stories, as well as 93 high-end condominiums - priced at $1 million and up - on the top floors. There will be parking, retail and restaurant space on the lower floors. The residential component is being called Sovereign.

Much of the growth is being fueled by population growth, which brings with it a growing need for health care. Choate is adding a floor to Newton General Hospital, while R.J. Griffin & Co. of Atlanta is the general contractor for the $88 million Children's Healthcare of Atlanta at Scottish Rite, and Bovis Lend Lease of Atlanta is completing the $73 million Emory Johns Creek Medical Center.

William A. Pinto, president of Hardin Construction, said he expects this market to remain consistently strong "for several years to come."

Local government is also responding to the demands of growth. Clean Water Atlanta is the city's $3.9 billion comprehensive, long-term plan to ensure clean drinking water for Atlanta, as well as clean streams and wastewater flows for the metro region and its downstream neighbors. The multiphased project includes overhauling the sanitary sewer and drinking water systems, water main replacement and sewer rehabilitation projects.

In addition, Choate credited the administration of Mayor Shirley Franklin for creating an environment that's attractive to business. "They have made significant strides in creating a more accountable structure - and that's important to corporations," he said.

The city is also investing heavily in the airport, which opened its fifth runway - costing $1.2 billion - in late May. That's part of a 10-year, $6.2-billion capital improvement project that will also include a people mover-linked remote rental car facility, new control tower, runway replacements, new taxiways and new terminal. Work is now occurring on the taxiways and rental car facility.

But what newcomers mostly need is a place to live. And in Atlanta - as in cities throughout the country - they are increasingly choosing to live in high-rise condominiums in the urban core.

"This is being driven by the growing desire of people to move back to the core of the city," Pinto said. "It means the ability to spend less time in your car, plus more neighborhood services are being provided."

The list of projects now under way in Atlanta includes the $159 million, 443-unit Midtown Condominium being built by Brasfield & Gorrie of Kennesaw, Ga.; the Mansion on Peachtree, a 42-story, $150 million hotel/condo tower being built by Holder Construction Co. of Atlanta; and two projects by Bovis Lend Lease: the $130 million Stanbury Hotel and Condominiums to be completed late next year and the soon-to-begin, $120 million St. Regis Hotel and Condominiums.

Additionally, Choate is building the 22-story Parc at Buckhead, a high-rise independent-living facility scheduled for completion in November 2007. The company also recently started on Tribute Lofts, a three-building complex of 147 loft-style apartments.

Area colleges need housing, too. One of the biggest of these is Hardin Construction's $107 million University Commons project at Georgia State University in Atlanta. This complex of four buildings, varying from eight to 14 stories, will deliver 2,000 beds to the university by next summer.

Outside of Atlanta's urban core, One Vinings Mountain, a $90 million tower being built and developed by Trammell Crow Residential of Atlanta, is reportedly scheduled for completion in early 2007.

"If there is a burst in the housing bubble, they forgot to tell the people in Atlanta," Dunham said.

Among the other condo projects coming out of the ground are the 36-story, $115 million ViewPoint condominium tower being built by R.J. Griffin & Co.; and Twelve Centennial Park, which will be completed by R.J. Griffin next fall.

There also are increasing numbers of tourists coming to Atlanta. The $290 million Georgia Aquarium, the world's largest, opened about a year ago. Beside it, a new World of Coca-Cola facility is being built at a reported cost of $96.4 million by a group of contractors that includes C.D. Moody Construction Co. of Lithonia, Ga., as well as Holder Construction Co. and Manhattan Construction Co., both of Atlanta. The facility will serve as an update of the existing World of Coca-Cola, functioning as a museum and exhibit.

Across the street, Holder Construction Co. is also busy building a new Hilton Garden Inn Hotel.

With all this growth, Atlanta contractors are definitely facing their share of materials and workforce challenges. "The escalation of material prices has been a big bear to handle," Choate said. "Our challenge is to have a crystal ball to accurately forecast what is going to happen so our clients don't get a big fat surprise."

And it's getting more difficult to find trained workers. "Like everyone else, we are feeling the workforce shortage and the lack of skilled people," Dunham said. "It's put a pressure point on everyone."