Moderated by Rick Badie
Atlanta may not be a super city, but it has been ranked as a desirable “second-tier” city by a real estate services firm that monitors international global real estate investment. Today, Atlanta Mayor Kasim Reed touts the importance of global economic engagement, while a financial executive says the region is being “rediscovered” by international investors.
Global engagement boost city’s standing
By Kasim Reed
Former Mayor Andrew Young, who arguably did more than any mayor to place Atlanta on a global stage, recently wrote the city had moved beyond being the “next great international city” to a “global powerhouse.”
I couldn’t agree more. Atlanta has a unique opportunity to solidify its position as the business and cultural center of the South via global engagement.
We have the tools to achieve this objective. We are home to the nation’s third-highest concentration of Fortune 500 companies, the world’s busiest airport, and renowned universities and talent. The consulting firm AT Kearney ranked Atlanta 35th on its Global Cities Index.
I’m not satisfied with Atlanta being 35th, though. I want us to dream big and move past cities such as Dubai, Berlin and Buenos Aires. I am taking steps to strengthen our city as a global leader in logistics, technology, trade and culture.
Atlanta ranks among the top 10 U.S. cities for foreign direct investment. Opportunities to expand foreign trade and investment are critical if Atlanta is to become the logistics hub of the Western Hemisphere. I have made it a priority to increase air cargo traffic into Hartsfield-Jackson International Airport. Just last year, Atlanta was ranked as one of the top 10 U.S. cities for air cargo traffic.
Recently, the Atlanta City Council approved an incentive program to attract new cargo carriers. I hope the program increases our airport’s global competitiveness. I will continue to work on the deepening of the Port of Savannah. We’re close to getting funding for that project, which would expand cargo traffic and bring additional jobs to metro Atlanta.
This month, I led a delegation of area companies to Brazil, where we met with more than 150 potential investors to promote Atlanta for foreign direct investments and export trade opportunities. Today, 35 Georgia companies do business in Brazil, and 41 Brazilian companies do business in Georgia.
Another key vision is to make Atlanta a global technology hub. I’ve set a goal to retain 75 percent of our science and technology graduates here so they can launch, cultivate and nurture their dreams. I recently traveled to Silicon Valley to tell the Atlanta story to venture capitalists. Right now, less than 10 percent of venture capital investment goes to the Southeast. We can, and will, make Atlanta an attractive city for Silicon Valley investors.
Finally, Atlanta is a cultural hub. Respect for cultures and a sense of inclusiveness are part of our “secret formula.” However, sometimes the region’s tone does not reflect this. To send a signal that all people are welcome, I signed a resolution reaffirming Atlanta’s commitment to being a Welcoming City. We will recognize the dignity of all people, regardless of race, ethnicity or place of birth.
I could not be more excited about our future. I’m confident it will be better than our past if we have the will and the grit to shape it.
Kasim Reed is mayor of Atlanta.
Real estate investors “rediscover” Atlanta
By Faron Thompson
As the economic recovery gains momentum, commercial real estate investors are rediscovering Atlanta.
Atlanta’s return to the limelight is akin to a baseball team’s late-inning rally. In the earlier stages of the economic recovery, domestic and international investors favored the 24-hour gateway cities of the U.S., such as New York, Washington, D.C., and San Francisco. More recently, investors are taking a closer look at Atlanta.
This shift is part of a larger trend taking shape globally. Recent research by Jones Lang LaSalle shows the world’s top 30 cities, which include Atlanta, account for half of the $4.6 trillion in direct real estate investments the past decade. A flood of capital targeted the largest cities, from London and New York to Tokyo and Los Angeles.
However, the combination of limited availability of prime properties and thin returns by historical standards in these super and primary cities has led investors to look elsewhere to allocate funds. Enter Atlanta and other second-tier cities.
According to a LaSalle ranking of the top 30 global markets based on direct commercial real estate investment, Atlanta rose from No. 26 in 2012 to No. 16 globally as of the third quarter of 2013. Total annual transactions rose from $6.7 billion in 2012 to $9.6 billion in 2013. Those volumes include heightened international investment, from $361 million to $795 million during that time.
What is Atlanta’s draw?
Its compelling case for investment and economic development is very much the same as during the first investment boom I participated in during the late 1980s to early 1990s. The city is accessible via Hartsfield-Jackson International Airport. We maintain a large, educated labor force and a lively pro-business climate at both the state and local level. Atlanta boasts a vibrant and diverse economy and offers sporting and educational assets in a pleasant climate.
There are some notable changes in the current real estate cycle. The shrinking availability of developable land creates higher barriers to entry, which is attractive to investors because they have less reason to worry about competition.
Although international investment in Atlanta is not dominated by any particular property type, multifamily investment has experienced explosive growth. The stigma about renting has been debunked. Renting is viewed as a viable alternative to home ownership at virtually every socio-economic level.
In the office sector, Atlanta possesses an abundance of the well-designed, flexible properties in urban settings that real estate investors seek.This high-quality space is crucial to Atlanta’s economic growth, enabling the city to land corporate relocations in sectors such as technology and health care.
We can expect the heightened investment activity in Atlanta to continue. Frankly, I’m a bit surprised it took this long for it to be “rediscovered,” but a late-inning rally tends to be more satisfying.
Faron Thompson is international director of capital markets for Jones Lang LaSalle, an investment management firm.