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As a result, cities like Dunwoody, an “edge city” outside Atlanta, are seeing immense economic growth despite the challenging times.
Even though the pandemic has slowed momentum in the city’s leasing market, Dunwoody has established itself as an up-and-coming center of employment -- and its position for long-term viability is piquing the interest of big-name companies.
Real estate firm Zillow Group recently tapped Dunwoody to be its Southeast regional hub, joining the ranks of insurer State Farm, hospitality brand InterContinental Hotels Group and tech management company Insight Global in choosing the location.
Millennials are also moving in, attracted by Dunwoody's hybrid of suburban and urban, promising job and residential markets -- and affordable rent, with an average cost of $10 or less per square foot.
“Dunwoody is a place where people come to work and raise a family,” Michael Starling, the city's economic development czar, told FOX Business. "We are transitioning from having primarily retail and offices to more residential development. Now we are becoming more of a mixed-use place."
In addition to the vibrant job market and business-friendly atmosphere, Dunwoody’s lower-overall cost of living and proximity to mass transit have made it a hub for both millennials and Generation Z. In fact, 50% of the population in Dunwoody is made up of millennials and Gen Z, and the median age of residents is 36.
“More people are moving to Dunwoody for access to jobs and jobs that are in the surrounding areas like Atlanta and the Northern suburbs,” Starling said. “The office and housing market are a value compared to living in Atlanta, and Dunwoody is that affordable alternative people are looking for, whether it’s by choice or necessity. For a lot of these edge cities like Dunwoody, as growth has occurred, new jobs and employment follow.”
Dunwoody became Atlanta’s first edge city in the early 2000s, after the development of its Perimeter Mall sparked an early expansion and earned a reputation as a metro business hub. An edge city is characterized by an area located on the outskirts of a major city and beside major transit lines, populated with a concentration of retail, business and entertainment. The Perimeter Market, which is connected to the MARTA rail line and provides access to urban and suburban amenities, is now the second largest mall in the Southeast and continues to be one of the region’s predominant economic engines.
And as the city evolves into an "urban-burb," with mixed-use developments, more companies and prospective lessors are joining the ranks.
Zillow is the latest tenant to announce its new footing in the Perimeter Center. The Seattle-based group is expected to create 200 jobs once it settles into the 32-story office tower. Recent office developments, including two high-profile projects like Twelve24 and State Farm II, will continue to gain traction as companies look beyond the current predicament of vacancy. Twelve24, a multi-tenant 16-story office tower, has already signed a long-term lease with national staffing firm Insight Global.
“We chose this location in Dunwoody for Twelve24 because we felt it contains all of the necessary elements that create a lively and easily accessible city center,” said Brandon Houston, principal of Trammell Crow’s Atlanta team. “The confluence of the MARTA station, Perimeter Mall, the new State Farm campus, and the future High Street development each contributes to making this intersection in Dunwoody a dynamic, mixed-use environment that is essential for Class AA office development.”
Even though there is a fair amount of square footage on sub-leases right now, Starling anticipates that businesses will be compelled to look at the long-term value offered when thinking about what offices might look like after COVID-19.
Whether the future of office space will be contingent on shrinking the office market or growing it in order to spread out, or even functioning as a hub-and-spoke model that combines workers from suburban and urban areas, Dunwoody is poised to accommodate that flexibility.
“Either way that works out, we offer a good alternative with our great access to transportation infrastructure and high value,” Starling said. “It’s going to be that flexibility moving forward that differentiates us.”