West Midtown's Star Metals Development is Getting Bigger

Atlanta has been one of the cities with a wealth of greenery. Known as the “city in a forest” due to its lush tree canopy, Atlanta has had lower-than-expected building projects for a long time, but a West Midtown project next to Star Metal District is set to transform this outlook. The advent of Star Metals marked the first major rapid transformation of Atlanta’s Westside, and the new project is set to continue this transformation. The project will be a joint venture of Allen Morris Company and Animal, an Atlanta-based real-estate investment firm, and is set to feature a 33-storey residential skyscraper that will be the icing on the cake of the project that features three towers. Read on to find out what the next big Atlanta construction project will feature.

Rendering Courtesy of Allen Morris Co. & Oppenheim Architecture

The development team responsible for Star Metals District, a development project along Howell Mill Road is set to begin its final phase of the construction project that will be about 1.5 million square feet. It will feature 800 residential units, about 10,000 square feet of retail space, and 200 hotel rooms. The three foliage-filled buildings will include one of the tallest towers proposed in West Midtown.

One of the reasons that has promoted the accelerated development of the west midtown area is the evolution of the region from a dense almost isolated region to a vibrant walkable neighborhood. Development has been explosive in recent years making the area a magnet for the younger generation looking for the ideal residential, dining, and shopping district. With residential and commercial spaces the developers are looking to create something akin to the Fourth Ward project.

What to Expect

One of the most unique aspects of this project is that it will feature green spaces as part of the transformation project. This design is expected to break the monotony in what will otherwise be a concrete jungle. Community groups support construction projects that consider the social aspect of development by including features such as parks. As such the new construction project will feature a one-acre park at the center of the project that will serve as a community gathering space. Many projects are prioritizing community gathering spaces other than parking spaces. Such designs emulate building designs that are prevalent in Europe where lively or green spaces are preferred. This is in part to support the sustainability development projects that have been scarce in the west midtown area.

Sustainable Construction

In layman's terms, sustainable construction practices refer to the environmental ethical, and responsible ways of building, designing, and operating infrastructure. They can also refer to construction methods that aim to integrate nature into their construction rather than destroying it. The main aim of these practices is not only the conservation of natural resources but also reducing the environmental impact. Other than including social spaces here are some other common sustainable building practices.

Using sustainable construction materials is perhaps the most widely employed sustainable construction practice. It involves using renewable, recycled, or organic materials in the construction process. Secondly, developers may also opt to use energy-efficient systems such as smart lighting and HVAC in order to reduce maintenance costs. Another common sustainable building practice is employing effective on-site waste disposal services such as landfills to reduce the impact of construction activities on the environment. Lastly, buildings need to install measures to ensure water consumption. This can include water conservation and water harvesting methods that maximize the design of the building. Allen Morris and their partners have strived to ensure that their project adheres to most of these construction practices.

While the current approved height of the development project is 225 feet, developers are looking to make the building even taller by seeking approval for the allowable height to be about 340 feet. The original development design had a height of 425 feet which is about 42 stories. If approved the tower will be the tallest building in the Midwest region. The decision on approving or disapproving the suggested height of the project will be made later this month.

While this may seem like a short time considering that the project is expected to break ground in 2025 there may still be enough time for the approval and construction of the project since the final phase of the three towers is expected to be constructed sometime around 2027.

According to Allen Morris, the height variance will allow for more vertical density in the development which could be beneficial not only to the project but also to the surrounding project. The designers of the project are of the view that increasing the vertical height of the building rather than the horizontal size will allow for the creation of more pedestrian pathways around the building and other suggested development buildings hence creating a more engaging social environment in the community.

A key concern in the development project is the oversupply of apartment buildings which has been the current trend in the Atlanta real estate industry. With many recently completed buildings, there are more apartments than the current market demand; this has led to a drop in rent prices. The first phase of the project is expected to commence in 2025, with about 450 residential units set for development and 200 hotel rooms. The developers are hoping for market recovery by the time the units are completed.

Financing

As previously stated the project will be a collaboration project between Allen Morris and Animal a real-estate development company. With toughening financial conditions and higher interest rates in the lending markets financing construction projects may find it hard to get the necessary financing. However, things are looking up for the West Midtown project with Allen Morris company having secured 100 million in construction financing.

A Look at Trends in the Atlanta Real Estate Sector

The dropping rent prices in the region call for an in-depth look at the real estate trends in the Atlanta market. Here is a look at the current trends that have been noticed in real estate in this region.

Housing

There has been a sharp increase in home prices in many regions in the area. The current decade alone has seen a 124% increase in house prices making Atlanta one of the fastest-growing real estate markets. It is estimated that home prices are higher by 45% compared to the national average. However, despite the encouraging increase in home prices for developers a report by Zillow shows that there has been a 1-5% decrease in home values year to year.

Commercial Real Estate

The commercial housing sector has had some positive indications with a 9.4% decline in vacancy rates. This shows that there has been increased economic activity in the area which could point to a growing economy. Another positive indicator in this industry is the asking rent for properties which has increased by 11.9% year to year. The positive growth in this sector can be attributed to the increased demand for such spaces and a low supply. The construction of commercial spaces has slowed down in recent years.

Office

In the office space sector, there have been mixed signals. On one hand, the leasing activity has increased substantially while sub-lease spaces remain at almost an all-time high. In areas such as North Fulton the office vacancy rate is almost at an all-time high.

These trends show a balanced market for buyers and sellers. For developers, this means that they can expect the existing market conditions to prevail for a bit longer. This is in regard to factors such as rent prices and vacancy rates. As for tenants or property buyers, it is advisable to remain proactive in the market and make an offer quickly for properties. This is because real estate can be unpredictable, and the favorable buying conditions may not last long. Lastly, developers and sellers should strive to price their properties appropriately based on existing market prices.

Construction development is one of the biggest factors that influence the growth, expansion, and economic activity of any region. While there have not been many major construction projects in Atlanta, the growth of the real estate industry in the region has attracted some serious construction projects. With some major projects already completed, such as Star Metal District and other upcoming projects in the West Midtown region, Atlanta could be the next major metropolis. Their sustainable construction practices and design considerations will not only lead to more socially inclusive projects but also promote a sense of community in the locality of these projects. It is important for developers and other stakeholders to consider the current market while in the course of construction to ensure that they make a return on their investment and address market needs.