by Andrei Leon, Founder, Artisan Haus
There has been so much happening in the commercial real estate space related to film and entertainment in Georgia recently. Recent headlines include:
- Raulet Property Partners sold Eastside Stageworks to Niantic Partners for $14.5 million and listed Westside Stageworks for $17 million.
- Gray’s Assembly Studios celebrated the “topping off” of 19 stages in Doraville with plans to open in June 2023.
- In South Fulton County, Patrick Millsaps reportedly wants to build a film production campus double the size of Trilith Studios and quadruple the size of Tyler Perry Studios.
These announcements reflect the incredible growth of Georgia’s film industry and certainly has been a key factor in Atlanta’s commercial real estate values. However, companies are carefully monitoring the market as construction is slowing due to tighter financing, higher inflation and labor challenges. While Gray television will complete the sound stages, the company will pause development of housing, shops, restaurants, and a hotel planned for the development citing market conditions.
Two industrial submarkets remain areas of opportunity including the southwestern quadrant of Atlanta located in the Fulton District submarket and in the northeastern quadrant located in Doraville/Norcross. On a nominal basis, asking rates in Fulton District are the lowest in metro Atlanta, at around $6/SF. Average rents here are about $1.50/SF lower than the neighboring I-20 West/Douglasville and Airport/North Clayton submarkets, per CoStar. With Fulton District representing 924k SF of emptied space available for lease and the Doraville/Norcross submarkets representing a combined of 622k SF of space available at close of 2022, these two areas are ripe for growth and expansion through lease or purchase.
Investors are keeping an eye on climbing inflation and interest rates while developers are finding construction material costs and availability in flux which could slow the pace of growth.
The office sector is looking for a new normal, defined by ultra-flexibility, as Covid-19 variants continue to delay the return to the workplace.
Job creation puts more renters in the renter pool and, with increasing wages, it is expected that apartment development will continue to catch up with new jobs being added including those in the film and entertainment industries. Housing supply is a major factor in determining trends in commercial real estate opportunities. One of Georgia’s biggest challenges is housing development and affordability around commercial developments. Otherwise, the Atlanta metro remains a growing and appreciating market and, per the National Association of Realtors (NAR), it “continues to be more affordable than most areas across the country, with more than 20% of the renters able to afford to buy the typical home in the area.”
Regarding office space in Atlanta, there’s almost 7 million square feet of sublease space. According to ABC, tenants are putting their space on the sublease market to try to recoup the costs of not occupying their offices. Sublease space has more than doubled over the past 18 months, according to reports from real estate services firm Cushman & Wakefield.
Opportunities could exist for those in film and entertainment looking for office space in certain areas of Atlanta as buildings with listings are clustered around Midtown, Buckhead, Cumberland, Perimeter, and Norcross. The shortened term agreements that often accompany such subleases combined with a healthy supply of office styles and budgets opens options for a variety of tastes and preferences for finding the perfect new space.
Please contact me if have any questions about real estate. If I can’t help you, I know someone who can or can guide you in a credible direction. Also, I would appreciate your feedback including suggestions about future topics to cover.
Until next time, Andrei Leon
Artisan Haus is a boutique real estate brokerage serving the film and entertainment community with a trustworthy reputation amongst its domestic and international clients that are looking for a clear, confident, and stress free transaction process. Guiding clients based on understanding of up-to-date market trends and analysis of future market directions, Andrei Leon and his team provide comprehensive end-to-end consulting and brokerage services for individuals and companies interested in Georgia’s residential and industrial real estate. Whether you’re looking to buy, sell, or lease, Artisan Haus has the skills and experience to successfully realize your goals. For a consultation, contact Andrei Leon today at email@example.com or 678-439-9346.