With multiple companies starting to call Dunwoody home, the metro area city has had an influx of business lately – despite an over two-year long pandemic.
Hapag-Lloyd, an international shipping company, announced it will move its headquarters to Dunwoody back in December of 2021, and other companies such as Carvana and Schindler Elevator have also planted roots in the city.
Along with new businesses, the city will also play host to a couple of new multi-use developments in the coming years. Construction kicked off on the city’s $2 billion High Street Project in November. Campus 244, an almost 13-acre project near Perimeter Mall, recently announced the project will include a 145-key Element Hotel. Both projects will include office space.
Reporter Newspapers talked to Dunwoody’s Economic Development Director Michael Starling about the boom of new business. This interview has been edited for length and clarity.
What is it about Dunwoody that’s drawing new companies to the city?
Michael Starling: I think it’s what has drawn companies to Dunwoody and Perimeter always, and that’s transportation access [and] location to the workforce. Dunwoody is about as close to being in the center of metro Atlanta as you can get, with 285 and 400. So I think companies look at this market as being able to recruit employees from all four corners of metro Atlanta.
The fact that we have MARTA is sort of a differentiator compared to other suburban markets. We’re the only … office market, really, that has MARTA, so that allows them to then recruit from intown. Hapag-Lloyd is an international company, and so having direct access to the airport through MARTA makes it easy for people to get in and out of the office.
Speaking of Hapag-Lloyd, could you run through some of the other companies that are beginning to call the city home? I know Campus 244 and High Street will have some office space too.
MS: Right before COVID, we had quite a bit of activity in Dunwoody. Unfortunately, the pandemic sort of put a halt to most of that. But some of the companies that moved in prior to COVID – Centene, which is an insurance company, they moved into The Terraces. They took about 50,000 square feet. OldCastle, which is a big construction material company, moved about 50,000 people in. There’s an IBM spin off. [Acoustic] spun off from IBM and moved into The Terraces. So there was a lot of good, strong momentum in the office market, but COVID put a halt to that.
Hapag-Lloyd is certainly the largest, at 127,000 square feet or so. It’s a sublease from IHG. IHG decided they didn’t need as much space as they had leased and so they put some of this on the sublease market. So for Hapag-Lloyd, it was a good, inexpensive way for them to get into the market.
Schindler Elevator just moved into Ravinia as well. They took the lease a few months ago and they should be moving in full pretty soon. Carvana is subleasing all of State Farm’s number one building. We have not met with anybody from Carvana yet, but State Farm just took their signage down off the building and we understand Carvana’s sign will be going up pretty soon and they have started hiring people in metro Atlanta.
As far as getting these companies to come to the city, what does that process look like? Do they come to you first, or do you go to them?
MS: All of them are different. Some of them we never see. They simply identify Perimeter, and they find the space through the private sector. That’s how most of them happen, because a lot of these companies are either in Sandy Springs, or they’re here, or they’re already in the market.
Hapag-Lloyd was a state project. They were looking to relocate out of New Jersey, and so they worked directly with the State Department of Economic Development, identified metro Atlanta, and then within metro Atlanta they identified a number of communities. The state then contacted us and we worked with Decide DeKalb, which is DeKalb County’s economic development arm, and proposed Dunwoody. [We] gave them information, whatever they wanted.
Nowadays, data is so readily available that they know as much about us as we do before they ever show up. So we talked specifically about incentives, and we did offer $100,000 from the [Dunwoody] Development Authority for the company. I certainly don’t think that was the deciding factor in them coming here, but it obviously showed that we’re willing to put some money on the table to help. They could have been working with the state for months, if not longer. The project moved pretty quickly after we got involved, and the company made the decision probably late November, early December, and then announced the first week of December.
How does the health of the office market strike you now, particularly with the state of the COVID-19 pandemic, and the new variant?
MS: I think two years ago, when the pandemic hit, I would have thought that the office market would be in a weaker position at this point. It’s pretty surprising that we haven’t really had a lot of companies give back a lot of space or move out. I think that’s good.
I think [hybrid] has just become the new normal now. That flexibility for employees and for the companies is sort of the top of mind. I think almost all companies are looking to come back into the office in some manner. A company like Hapag-Lloyd, they don’t sign a lease like this unless they plan to have their people in the office some amount of time. But I think for every company that’s a little different, so flexibility is top of mind for all of them.
The suburban market, like Dunwoody, has buildings that have a little more elbow room, that have a little more space. Some of the new developments, like Campus 244, are designing offices that have operable windows. You can open the window and get fresh air. You’ve got a lot of outdoor areas. I think our market is going to be able to react more quickly to the need for that kind of space, because we just have more room. Suburban markets are not like urban areas that are completely built out. We’ve got greenspaces – the Ravinia complex has built out a beautiful park in the middle of those three office buildings. The Terraces has built outdoor work areas throughout their 15 acres. Campus 244 will do that. High Street, they’re adding about 90,000 square feet of office to their mixed-use development to be built around a park with Wi-Fi available.
I’m pretty bullish on the office market, especially coming out of a pandemic. I think we’re all waiting for the all clear sign with Omicron, and everybody’s looking, is there something coming next? But companies have absolutely shown that they are going to continue to lease space. They may lease less space, and I think the space is going to look really different than it did prior to [COVID-19], but they’re leasing space. They’re going to have a physical location somewhere.
How many jobs do you expect to come out of new companies like Hapag-Lloyd and new office spaces like Campus 244 coming to the city?
MS: I think Campus 244, when they’ve built out Phase One, there’ll be I think 1,800 new jobs. Those jobs all might not be there at the same time, with sort of a hybrid work schedule, but they’ve got room for about 1,800.
We still have probably 20% vacancy in our existing office buildings. So there’s quite a bit of opportunity in some of our existing buildings. Typically what happens when you have the amount of sublease space that we have from companies like IHG and State Farm … that space is typically leased first because it’s usually a better deal financially. So once that is done, I think you’ll see some of the other space being taken.
High Street jobs are a little harder to gauge. They’re going to renovate the existing office building there, the 211 building, about 230,000 square feet. Then they’re adding another 90,000 square feet of office space. That 90,000 square feet, you could probably have 400 jobs. So right there, there’s a couple thousand new jobs, once that space is leased, coming to the area.
Besides jobs, how do you think new business coming to the area positively affects the city?
MS: It’s always great to have spaces leased. One thing we found in COVID is that we have a lot of retail in our market. We have about 9.5 million square feet of office space in Dunwoody, and then about 4.5 million square feet of retail. Almost all of that is in the Perimeter market. So office jobs coming back in – people typically in the office – is important, because we have a lot of restaurants, a lot of new restaurants opening. We have a lot of mixed-use developments that are renovating and changing how they function, and so a lot of that space has been leased. So, certainly we think that will support the existing retail. Our hotels are still struggling for occupancy because of COVID, so that’s going to help. Our hospitality, our hotels are really Monday through Thursday business travel – that’s their bread and butter, so that’s going to help.
But we think it’s important also for companies like Hapag-Lloyd, to engage them in the overall community, and get them engaged in our nonprofits, and get them engaged in volunteering in the community. So it’s always good to have companies who sort of planted their flag … this stuff is obviously going to be here for the long term. So we want to make sure they’re really part of the community. I’m sure we’re gonna get a lot of new residents who work for Hapag-Lloyd, or existing residents take some of the jobs that are going to be there, because I doubt all of their people from New Jersey will relocate. It’s sort of multifaceted, the impact. But when a company like that invests in the community, other companies also take notice and make the same decision, or it’s easier to get them to make that decision. I think we also could see some other spin-offs of other companies following suit.