Face Off: Shaping the future of Atlanta real estate
July 2024 — The development landscape in Atlanta continues to evolve, driven by a blend of innovation and adaptability. As market uncertainty persists and new challenges arise, leaders in the industry are proactively addressing these dynamics to maintain and enhance their competitive edge. However, leaders in the sector are not only adapting to meet these challenges, but also actively innovating and shaping the future of the region’s real estate landscape.
Focus: spoke with Jeff Koon of Stratus Property Group and Patrick Kassin of Woodfield Development to delve into their strategic responses to the current environment, their achievements over the past year, and the evolving trends in their real estate assets. Koon highlighted Stratus Property Group’s integrated approach and their emphasis on innovative, high-quality projects. Kassin shared insights on navigating the complexities of Atlanta’s market, leveraging new technologies, and maintaining high standards across their developments. Together, their perspectives provide a comprehensive overview of how firms in the region are driving progress and meeting the changing demands of Atlanta’s development landscape.
What contributions has the company made to the development landscape of the region over the past year?
Jeff Koon: Stratus Property Group operates across three core business lines: brokerage, investment, and development. Our brokerage division continues to set the industry standard, having been recognized as the top consumer-rated commercial brokerage in Georgia. In development, the completion of Puritan Mill, an upscale townhome community in Athens, GA, exemplifies our commitment to quality and innovation. By integrating historic elements such as the mill water tower and reusing original bricks, wood, and millstones, we have created an original development that enhances the natural landscape and has been highly praised by both tenants and the larger community. On the investment front, we are proud to report robust satisfaction among our tenants, investors, and partners, setting the stage for continued success in 2024.
Patrick Kassin: Over the past year, the downtown market has struggled more compared to the suburban markets. However, we have had successes, including delivering a project in Athens, a suburban, secondary market to Atlanta, and it has performed well. We have also successfully navigated the construction process on another project.
Despite adversity, we have achieved some significant wins. These accomplishments represent our primary milestones over the last 12 months. Additionally, we are close to breaking ground on several projects and are working through their capitalization. This is another positive indicator of how well Atlanta is viewed in the capital market.
How has your company adjusted its strategies to address recent market challenges?
Koon: In response to economic challenges, Stratus has demonstrated remarkable resilience. Our brokerage strategy emphasizes transparency with clients, enabling us to provide swift and informed responses to changing market conditions. We have opted for a custom-tailored approach to clients instead of a volume approach, which many brokers follow. This proactive, focused approach ensures that we deliver optimal outcomes for our clients, even in volatile markets. Our brokerage team continues to put together quality transactions in an especially challenging sales environment.
In development, our selective approach to project initiation enhances our resilience. By choosing projects versus selecting the most projects, we avoid the pitfalls of overextending ourselves which is all too common in the industry.
Kassin: The biggest challenge we are facing in Atlanta is the reputational issue within the investment category, particularly concerning lease denials due to credit or fraudulent leasing activity. This has been a tough hurdle to overcome, but we are addressing it proactively. The state has passed legislation to make evictions easier for those who commit fraud, shifting them from being residents to trespassers, which is a significant step forward.
As owners and operators, we are quick to adapt and adjust to new technologies in the market. For example, we employ background-check software, which is an indication of our proactive measures. We are effectively screening out undesirable applicants while adhering to fair housing regulations.
Despite these challenges, we are starting to see positive results, thanks to the implementation of better management practices and supportive legislative changes. The Atlanta Apartment Association has been instrumental in advocating for apartment owners and operators.
What trends are you seeing in your real estate assets, and how have consumer expectations evolved?
Koon: The office sector has experienced significant shifts post-COVID. Despite return-to-office mandates, many companies are downsizing their office space, resulting in a softened market. In contrast, the industrial real estate sector shows mixed trends, with some areas experiencing strong demand while others have softened, depending on the sub-market.
Our operations span the Southeast, with a focus on Georgia and neighboring states. The Piedmont Atlantic megaregion remains a prime target for growth, while rural areas like South Georgia present unique challenges. Despite some overbuilt sectors, areas with limited competition and strong demand continue to offer lucrative opportunities.
Kassin: One of our key values as an organization is to deliver best-in-class assets in any market we enter. We take pride in constantly raising the bar of expectations. When entering a new market or suburb in the Southeast, people are often unfamiliar with what a high-quality asset can resemble. We have been successful in changing that perception. The goal is to build the best project possible within that submarket. It’s about finding a balance and delivering quality service that meets the expectations of the market, considering factors like constraints and product availability.
Additionally, we place a strong emphasis on the resident experience. Incorporating elements like art into our developments has been enjoyable and has contributed to enhancing social opportunities that are not typically associated with multifamily development. This aspect of our mission has been rewarding to pursue.
What innovative products or technologies are you leveraging to improve efficiencies or increase sustainability?
Koon: Technology is seamlessly integrated into our operations, reducing reliance on paper and supporting remote work. We utilize various applications, software, and databases to enhance operational efficiency. Our continuous shift towards digitization drives innovation and positions us at the forefront of the industry.
Sustainability is a core value at Stratus. We promote eco-friendly practices through digitization and flexible work-from-home policies, reducing emissions and environmental impact. Our development projects focus on repurposing existing buildings and integrating with natural landscapes, avoiding unnecessary demolition. This approach underscores our commitment to environmental stewardship.
Kassin: From a development standpoint, we are always looking to improve our processes, although development tends to move a bit more slowly compared to other areas. Incorporating better scheduling software is a priority for us. We use Smart Sheets, which allows us to create incredible timelines and assign responsibilities efficiently. Additionally, we are starting to utilize Tableau to aggregate and visually present our information to our team and our investors.
Our development process is also becoming more design-driven, with teams collaborating better and using platforms like BIM 360 for real-time collaboration. While our software ultimately relies on Excel-based platforms for modeling, we are exploring new technologies and app solutions. One app we use is called Site Audit Pro, which allows us to quickly create visual reports on our iPhones, enhancing communication and efficiency.
For more information visit:
