Atlanta Business Chronicle – 10:03 AM EST Wednesday

Georgia’s economy is holding on, but will slow down to be in sync with the national economy over the next few years, according to Dr. Rajeev Dhawan, director of the Economic Forecasting Center at the Robinson College of Business of Georgia State University.

But also in his Forecast of Georgia and Atlanta (November 2006) released Nov. 15, Dhawan said there are still bright spots for Georgia’s job seekers in several key areas — hotels, arts, entertainment and recreation, hospitals, insurance, trucking and science.

“Georgia has created 92,000 jobs in 2005 but the pace in 2006 is slower — only 72,800 in the last 12 months,” Dhawan said. “Going forward, sectors like health care, tourism and retail will still add jobs in the next few years, but the pace will be slower.”

In addition to the jobs outlook, Dhawan expects the housing market will continue to moderate all across the country, but for Georgia the pain will not be quite as bad.

“Home prices in Georgia never skyrocketed very high so consequently they won’t fall as much either,” he said. “But local builders of single-family homes are getting spooked by the national indicators and in Atlanta, single-family permits have decreased by 5.5 percent since January and will end the year down by 9.5 percent. However, Atlanta is unique because of the surge in condo projects which have increased multifamily permits by 16.8 percent so far this year and will finish 2006 up by 14.3 percent.”

Dhawan said the increase in condo projects has also had a positive effect on Georgia’s construction and engineering sectors.

Georgia’s employment level will grow by 82,200 jobs in 2006, Dhawan predicted. In 2007, Georgia will gain 61,100 jobs. In 2008, Georgia employment will increase by 82,600 jobs. In terms of growth rates, Georgia’s employment will increase by 2.1 percent in 2006, 1.5 percent in 2007 and 1.8 percent in 2008, he said.

Georgia’s premium jobs ($45,000-plus annual salaries), on a calendar year basis, increased by 10,300 in 2005 and will increase by 9,500 in 2006. In 2007, Georgia will see new 5,800 high-paying jobs and 10,300 in 2008, Dhawan predicted.

Employment in Atlanta on a calendar year basis is expected to gain 54,700 jobs in 2006, create 43,500 additional jobs in 2007 and 58,600 jobs in 2008.

The number of Atlanta’s total housing permits decreased by 3.1 percent in 2005. Permits will decrease by 5.7 percent in 2006 and by 10.6 percent in 2007, Dhawan said. In 2008, permits will again decrease by 3.1 percent.

By WALTER WOODS
The Atlanta Journal-Constitution
Published on: 11/02/06

A once sleepy corner of Midtown is becoming the area’s new development hot spot — in part because of its proximity to Atlantic Station.

Seventeenth Street used to be a small-scale Ansley Park thoroughfare that people used to parallel park near the High Museum of Art and a nearby Starbucks.

But that changed suddenly with the coming of Atlantic Station, metro Atlanta’s leading mixed-use project, and the big yellow bridge the DOT built to link that project to Midtown’s office district.

The bridge, which opened in 2004, created an instant gateway into Midtown from the I-75/85 connector as well as another high-profile corner on Peachtree — one with quick access to MARTA and a nice walk from amenities like the Woodruff Arts Center.

Investors have noticed, and big ones. Three real estate companies with national interests have in the past year come to own significant parcels on or near Peachtree’s intersection with 17th.

The 17th and Peachtree corner now rivals 14th and Peachtree as Midtown’s prime junction, and recent investments prove that, said Matt Bronfman, managing director at Jamestown Properties, which invested in the corner last week.

“Three companies who’ve made most of their money in a market like New York are suddenly buying into the Atlanta Midtown story,” he said. All of them near one corner.

u27A4 MetLife, the insurance giant known for its blimp, in January paid $36 million for the 5.2-acre Midtown Heights office park on 17th and Spring streets overlooking the connector.

u27A4 Tishman Speyer, a major New York real estate player and owner of Rockefeller Center, has also picked up a site at 17th and Peachtree streets near the One Midtown Plaza office building. Tishman Speyer bought the site, along with Colony Square and other assets, as part of a major push into metro Atlanta last month.

u27A4 And last week, Jamestown, a syndicate that puts German money into American real estate, paid $17.5 million for a 1.7-acre corner at Peachtree and 17th.

Jamestown and its partner, investment firm Shailendra Group, plan one or two high-rise towers with offices, hotel rooms, retail and condos.

Seventeenth is the next logical point for developers to put their money, said Kurt Hartman, vice president at Texas-based developer Hines, which built the 1180 Peachtree skyscraper at Peachtree and 14th streets.

The area “has a strong arts presence, a strong residential presence — it’s a smart move,” he said.

But it wouldn’t have happened without what’s happening on the other side of the bridge, Hartman said. “Atlantic Station and the bridge gave that section of the market credibility and viability,” he said.

Atlantic Station’s developer, New York insurance giant AIG, has also designated 17th as its main drag for office projects. Each of its office towers has been branded with a 17th Street address, and the projects so far have been winners.

The first 22-story tower, 171 17th Street, opened in 2004 and is now the local headquarters for Wachovia Corp. The 500,000-square-foot building is 95 percent leased. The property sold last year to JPMorgan for a premium — about $170 million, or $337 per square foot.

A second building, the 18-story, 350,000-square-foot 201 17th Street, will open in July, anchored by the Atlanta office of Nelson Mullins Riley & Scarborough, South Carolina’s largest law firm. A third 500,000-square-foot building, to be called 271 17th Street, is in the planning stages.

The momentum from all of those projects is spilling across the connector into Midtown, said John Whitaker, Atlantic Station’s chief executive.

Eventually, Whitaker sees several towers of various styles and uses rising on both sides of the street — much like 14th Street looks today. “We’ll continue to accentuate the importance of the 17th Street corridor,” he said.

But the quick rise of 17th, and the rest of Midtown, has some concerned.

Tim Holdroyd, a longtime Midtown real estate broker, agreed that 17th is Midtown’s latest focal point. He bought an acre at 17th and Spring streets nine years ago.

But he worries that developers and investors are paying too much for Midtown real estate in an uncertain office and condo market.

Office leasing around the city — though improved — is tepid compared to demand for suites in the 1990s. And local condo demand, which has exploded in recent years, has cooled in the past two months, Holdroyd said.

The cost of land is getting so high it’s making it harder for developers to make a decent profit off their projects, Holdroyd said.

The same thing happened in the district in previous decades, and some properties grew weeds because developers paid too much and couldn’t get their projects out of the ground, he said.

“You have individual developers picking up huge pieces of land for huge numbers — you saw this in the 1980s and 1990s. I don’t get it,” he said.