Construction crews installed the final beam atop the 60-story, 749-foot-tall sky-rise a week ago. With the fanfare and literal dust on that event now settled, Petricola had time this week for a wide-ranging, candid, and in-depth interview with Urbanize Atlanta.\u00a0<\/p>\n
The Rockefeller employee of 20 years has made innumerable trips to Atlanta, and below he lends a preview of what Midtown\u2019s newest true skyscraper will bring, while also discussing the outlook for developing on a monumental scale again and broader topics such as Atlanta\u2019s place among Sunbelt competitors.\u00a0<\/p>\n
Next year, 1072 West Peachtree is set to debut 357 upscale apartments, eight floors (224,000 square feet) of office space, a full acre of indoor and outdoor amenities, and 6,300 square feet of retail at street level.\u00a0<\/p>\n
The following Q&A has been lightly edited for clarity and length.\u00a0<\/p>\n
…<\/p>\n
Urbanize Atlanta: We\u2019ve been writing about development trends in Atlanta for years, and this is obviously a one-of-one project, at least from a height perspective. What made you and Rockefeller confident the Atlanta market was ready for this, right now?\u00a0<\/p>\n
John Petricola: Nobody can predict the future. But we did see some evolution taking place through Atlanta, through the activity of other projects and peer developers. Some of the activity, you\u2019d probably give some kudos and credit to Georgia Tech\u2014when they jumped the [Connector] highway, if you will. When Tech Square was envisioned by them, and there was a spark of development that was primarily focused on tech-related companies. When that was initiated, we were definitely watching that closely, and seeing that was the start of momentum of tech-related jobs. And jobs coming into urban centers sometimes also attract residential demand.\u00a0<\/p>\n
We definitely saw that happening well before COVID, when some of that development started moving north from Tech Square. You could see the office demand absorption was kicking off. [It\u2019s] that kind of environment where people want to live and work. So that started building up our confidence level that if we could find a site that could draft off of that a little bit, take advantage of that momentum coming our way, then let\u2019s go do it.\u00a0<\/p>\n
UA: What stood out about the site?<\/p>\n
JP: That site in particular\u20141072 West Peachtree [Street]\u2014had some unique qualities that a lot of other sites we\u2019d looked at and just never got confident with [lacked]. That particular site being on 12th Street\u2014that\u2019s a key street for us. It has kind of a direction shot all the way to Piedmont Park. It is a two-way street.\u00a0<\/p>\n
Being on that corner really allowed us to be able to take advantage of northbound traffic on West Peachtree [Street] and then capturing the need to go southbound on Spring [Street]. If we could design a project that worked, you\u2019d have the ability to get in and out of it very efficiently. And we knew that was a real driver for office demand. If the jobs are there, then knock on wood that hopefully the residential demand will be there.\u00a0<\/p>\n
\n UA: Everyone\u2019s aware of your partnership with Selig, at the three-tower development<\/a> across the street. But it sounds like you\u2019ve had your eye on Atlanta for longer than that?<\/p>\n JP: Our partnership with Selig, that was our baby-step into Midtown. Just for historic background, I opened our office for the Southeast in Atlanta in 2013, so we\u2019ve been in Atlanta with an employment presence. Most of our team\u201414-plus people\u2014live in Atlanta, are in our office in Buckhead, and have been focused on Southeast regional development activity.\u00a0<\/p>\n UA: Did you live here, or commute?\u00a0<\/p>\n JP: The entire [Southeast office] team does, but I commute throughout the entire Southeast. I actually commute in from Miami.\u00a0<\/p>\n UA: As someone who\u2019s spent a considerable amount of time here, do you think Atlanta stands out among its growing, Sunbelt peers in any way?\u00a0<\/p>\n JP: I do. And speaking for the company, we as an organization specifically chose Atlanta for our Southeast hub. Before that, our Southeast hub was based out of Miami. In order to really kind of dive in and be part of the whole Southeast picture\u2026 we chose to plant our flag in Atlanta over other Sunbelt cities.\u00a0<\/p>\n We have projects and investments in other cities such as Charlotte, and we\u2019re a big fan of those cities, but Atlanta I think punches above its weight in a lot of aspects. A lot of it I think is the strength of the population, as in educated strength, diversity strength. A lot of [corporate headquarters]. Cost of living is reasonable. Highly educated workforce. There\u2019s a lot of things that Atlanta has been able to achieve, broadly throughout multiple industries as well\u2026 It\u2019s not just tech-focused, or financial. Somebody might accuse Charlotte of being too financially focused, from fintech or financially bank-based companies. But Atlanta, as a way to compare, seems to have much more of a broad industrial base, from Coca-Cola to Home Depot and different types of industries\u2026 [That] makes it a resilient city from our point of view that allows for this level of development.<\/p>\n UA: Does Atlanta\u2019s mass transit\u2014particularly MARTA rail\u2014make it stand out in Rockefeller\u2019s eyes?\u00a0<\/p>\n JP: Absolutely. Our ability to get comfortable with 1072 West Peachtree, a big part of the thesis is that we were approximately 10 minutes walking distance to two MARTA stations. As cities get more congested quite frankly\u2014and Atlanta\u2019s definitely one of those cities\u2014having the ability to have public transportation opportunities helps.\u00a0<\/p>\n You know, we\u2019ve had many, many conversations over the years with a lot of architectural and engineering firms based in Atlanta who specifically used MARTA for their international travel, for companies that come in. The Atlanta airport, as you\u2019re aware, is one of the few that has a station on the airport. There\u2019s a lot of cities, I\u2019m sure, that are quite jealous of that. From there into Midtown, it\u2019s 20 minutes\u2014like clockwork. That airport has no peer.\u00a0<\/p>\n \n UA: A recent guest in town from north of Denver was astounded by the amount of young people she saw here. \u201cUnbelievably vibrant\u201d is the phrase she used. It sounds like that also played into what you saw as an attribute.\u00a0<\/p>\n JP: I think you see maybe 20, 30 years ago the leadership of offices may have chosen other submarkets [in metro Atlanta]. But now you\u2019re kind of chasing your potential employee. So where do the employees want to live and work? And the decision-makers of those offices are saying maybe we should look at opportunities in Old Fourth Ward or Midtown proper or West Midtown. We\u2019re definitely chasing that same thing.\u00a0<\/p>\n UA: I saw that Rockefeller is hiring a real estate development analyst in Atlanta. Maybe that\u2019s standard protocol, or maybe you\u2019ve grown more confident in Atlanta throughout the 1072 West Peachtree process? So when\u2019s the next tower coming?\u00a0<\/p>\n JP: [Laughs]. That\u2019s a tough one. These opportunities to build projects like this are pretty rare, getting all the puzzle pieces in place, especially lining up not only the development team but the capital. That window\u2019s only open at certain times of the real estate cycle. So we should all count ourselves lucky if you\u2019re there when the window\u2019s open, and you can get a job done like that.\u00a0<\/p>\n That\u2019s not to say we would never do [a high-rise] again, but it\u2019s a few moments of serendipity that allowed us to get this one where it is. If we\u2019re not doing a tower, that doesn\u2019t mean we\u2019re not still actively engaged in trying to do development throughout Georgia and the Southeast.\u00a0<\/p>\n UA: Any idea what 1072 West Peachtree is going to end up costing, as an investment?\u00a0<\/p>\n JP: We tend not to release formal numbers like that. But you could probably do some backend math and realize it\u2019s not a cheap project.\u00a0<\/p>\n UA: Shifting to the project itself, a lot\u2019s been said and written about these being the highest homes in the history of Atlanta, which has no shortage of tall buildings. The view across the city from up there, as a selling point, how is that going to be?\u00a0<\/p>\n JP: For timing\u2019s sake, we\u2019re going to be formally in the market early next year, the first quarter. So we have yet to release that marketing process. But early indications from our property managers, our team, [is that] it\u2019s going to be an exciting opportunity to live at that level. Being in the penthouse in a 40-story building down the street\u2026 great views, and really high rents. Our lower residential floors start around 20 or 21, going up to 60. So we literally have a 40-story tower sitting on top of a 20-story podium. The opportunity\u2014a lot of people haven\u2019t experienced that, because there are very few comparable buildings.\u00a0<\/p>\n We\u2019re excited to get people in the building. It\u2019s one of those things when you\u2019re looking out into the city\u2014well into downtown, well into Centennial Yards\u2014the view is unbelievable. You can see Stone Mountain clearly\u2014clear as day.\u00a0<\/p>\n Just another thesis here: Not everybody who will live in that building may be in the City of Atlanta right now. We\u2019re building for the future; as the city grows and attracts new businesses and people from around the world, they might be more comfortable in a high-rise like that, and that\u2019s part of the opportunity.\u00a0<\/p>\n \n UA: It\u2019s topped out, in terms of the final beam, but not completely finished at top. Renderings show what you might describe as decorative fins. Can you paint the picture about what\u2019s left to come with the top of the building?\u00a0<\/p>\n JP: You can see now the two-story mechanical room of the elevators [on the roof]. The intent is that you will never see that in the future. So we still have to build our parapet wall around that, which will have the ability to be lit appropriately and be part of the skyline. That\u2019s going to be a big kind of reveal.\u00a0<\/p>\n UA: Standout, unique lighting for the structure\u2014sounds like that\u2019s a priority?\u00a0<\/p>\n JP:\u00a0Yes, we want to make sure it\u2019s lit appropriately and a part of the skyline. It\u2019s going to have an appropriate parapet that\u2019s beautiful. We\u2019re still holding on to what exactly that delivery will be. So stay tuned.\u00a0<\/p>\n UA: Especially online, everyone\u2019s an architecture critic, but some have expressed opinions the building is a little too understated, especially juxtaposed with the decades-old icons of Atlanta\u2019s skyline. Or people think it\u2019s a sleek contrast to that. Was there any specific logic to the design?\u00a0<\/p>\n JP:\u00a0There was. And we spent quite a lot of time with TVS [architects], designing the different types of buildings that could fit on that site. There was a lot of discussion around how iconic it could be within the context of all the other constraints you have. And frankly, budget constraints are always a big part of these conversations, especially in today\u2019s world.\u00a0<\/p>\n So it wasn\u2019t that we were not paying attention to trying to create an icon, but we were also trying to make sure we had a project that would perform well, which is a part of the conversation that a lot of developers don\u2019t always expose, because a lot of people see what is the end result, but you\u2019re also trying to make sure the market absorbs your product. Are your floorplates efficient? Is it easy to manage the trash in the back of the house? We probably spent\u2014I hate to say it\u2014probably months working on the truck dock\u2026 making sure the trash can be collected so that you\u2019re not seeing trucks backing to a side of the building, dealing with trash early in the morning. Things like that.\u00a0<\/p>\n You experience buildings like this in different ways. When someone makes a comment about it, it depends maybe on the context in which they experience it. If you are driving down the Connector, you\u2019re definitely seeing the backside of it from a different perspective. I suspect there are so many people stuck on the Connector at 4 o\u2019clock, just staring at it, and you form opinions. But when you\u2019re standing at the corner of 12th and West Peachtree, looking up, and you\u2019re just like, \u201cWow, that\u2019s a whole unique experience in a different way.\u201d I hope, over time, as people kind of get to know the building, and the building becomes part of the fabric of the city, people will have different views. That it\u2019ll evolve. Try not to read too many of those comments, though. I\u2019ve read a few. I kind of laughed, but it\u2019s good though. \u00a0<\/p>\n \n \n UA: To what you were saying earlier, it\u2019s a risky bet on office at this point, even the most highly amenitized stuff. At what point will you consider this project a success?<\/p>\n JP:\u00a0Our success is when that project gets absorbed, when tenants see what we see and actively start signing leases. We\u2019re tracking very similarly to other office buildings, where it takes the building to be built for a little bit to generate traffic, tours. Atlanta\u2019s definitely a \u201cshow me\u201d city. A lot of people aren\u2019t signing big preleases on pretty pictures.<\/p>\n Without a doubt, office is a quickly evolving kind of property use, especially post-COVID. We\u2019re looking at how this return-to-office is evolving and how you attract tenants with amenities\u2026 West Peachtree [Street] has a new bike lane coming in, so just the ability to get to and from the building in an experience like that [is a focus]. We\u2019re seeing, knock on wood, through our other colleagues say at 1020 Spring<\/a>, absorption is happening in Midtown, that flight to quality. We hope to be part of the same thing. It\u2019s not a very large office project in relation. That gives us some confidence we won\u2019t have too much problem in absorbing it.\u00a0<\/p>\n UA: On the residential side, I know it\u2019s early and preleasing hasn\u2019t started yet. But any idea what it will cost\u2014let\u2019s say, at minimum\u2014to live there?\u00a0<\/p>\n JP: We\u2019re going to be in the same range as other premium apartment communities that have opened in Midtown. That\u2019s probably the best way to gauge it. I\u2019d hate to give you ranges now and be so far off. The reality of it, in order to make these projects work, these will be premium rents\u2026 We\u2019re trying to target a specific renter group. That renter group is a renter-by-choice [demographic] that truly has choices in the types of apartments they can rent.\u00a0<\/p>\n There might be an executive that\u2019s moving into Atlanta for a couple of years, and they\u2019re just not sure they\u2019re going to live there forever. They could probably afford a condo or house but just might not want that level of commitment. That\u2019s definitely part of our target market.\u00a0<\/p>\n UA: Any preview on the retail component?\u00a0<\/p>\n JP: Right now, we\u2019re very focused on demand for the office users, so there\u2019s a whole evolving conversation of what the office users and renters in that particular building want. We have a lot of concepts, but we\u2019re trying to make sure whatever we do appeals to that office demand. We\u2019re doing it in conjunction with office users.\u00a0<\/p>\n \n UA: One sentiment we\u2019ve heard from developers lately is that\u2014given turbulence in the market and interest rates and everything else\u2014affordable housing in some cases just won\u2019t pencil out, just isn\u2019t possible. Rockefeller doesn\u2019t have tunnel vision on Midtown; you\u2019re looking at the metro and the state. But have you personally looked at developing maybe along the Beltline, or somewhere that would require affordable housing, and if so, does it seem like an impossible hurdle, even in a time when there\u2019s such a crunch?<\/p>\n JP: We\u2019ve looked in general. I think affordability in general is an issue, just related to the cost of delivering units at a rate that can meet the average household income of the submarket. And there\u2019s clearly a gap. So I think, what tends to happen, you start looking at those opportunities where maybe the land cost might be lower. You get a little bit of an urban-sprawl desire, because you\u2019re like, \u201cWhere can we build cheaper? Where can we build maybe a different format of construction?\u201d\u00a0<\/p>\n As you know, [1072 West Peachtree] is a cast-in-place, concrete tower. A very complex structure. And the cost per unit of this tower compared to a stick-built, suburban multifamily project is literally night and day. If we want to [target] a household income profile that can afford an apartment, we have to figure out how to kind of bend that cost curve for delivering that per-cost unit.\u00a0<\/p>\n Construction costs have definitely tapered and modified over the last few years, so that feels better. Land costs are still up, and interest rates are still very high. So it\u2019s still a sticky problem. It\u2019s just math. And the math is hard to make work sometimes.\u00a0<\/p>\n UA: When do you expect first move-ins in Midtown?<\/p>\n JP: We\u2019re targeting summer of 2026. While we topped out, there\u2019s now all the construction that\u2019s going on inside those units.\u00a0<\/p>\n UA: So it\u2019s possible, or not, that people might actually be living there when the World Cup bonanza comes to Atlanta?\u00a0<\/p>\n JP: I would like to think it\u2019s possible, yes. Without a doubt.\u00a0<\/p>\n …<\/p>\n Follow us on social media:\u00a0<\/p>\n Twitter<\/a>\u00a0\/\u00a0Facebook<\/a>\/and now:\u00a0Instagram<\/a>\u00a0\u00a0<\/p>\n \u2022\u00a0Midtown news, discussion<\/a>\u00a0(Urbanize Atlanta)\u00a0<\/p>\n<\/a>
\nThe 749-foot-tall building was constructed by Atlanta-based Turner and designed by TVS, in collaboration with Brock Hudgins Architects. Courtesy of Rockefeller Group<\/p>\n<\/a>
\nMoments after the final beam was installed, a southward look at the 1072 West Peachtree high-rise Nov. 7 from West Peachtree Street. Josh Green\/Urbanize Atlanta <\/p>\n<\/a>
\nView south toward downtown from 1072 West Peachtree’s highest floors today. Courtesy of Rockefeller Group<\/p>\n<\/a>
\nView of the 60-story skyscraper in relation to Atlanta’s downtown Connector expressway. Josh Green\/Urbanize Atlanta<\/p>\n<\/a>
\nJosh Green\/Urbanize Atlanta <\/p>\n<\/a>
\nVantage point from high floors at the 60-story skyscraper, where checking Connector traffic from living rooms will be possible. Courtesy of Rockefeller Group<\/p>\n