DEL.ICIO.USUP CLOSE: GREGG METCALF, VICE PRESIDENT, ALTER GROUP, ATLANTA
Broker leases commercial space, looks for land to develop
The Atlanta Journal-Constitution
Sunday, October 19, 2008
Much has been made about residential real estate tanking, but what about office and industrial?
Gregg Metcalf leases office and industrial space in suburban Atlanta and elsewhere in the Southeast, and searches for land that his employer, the Alter Group, can buy and develop.
Sean Drakes/Special
Gregg Metcalf, vice president of the Alter Group, said the economy, competition from states with more incentives and Georgia’s Open Records Act are changing his business, based in Skokie, Ill.
• Age: 38
• Home: Brookhaven Heights near Oglethorpe University
• Family: Wife, Jere Metcalf, a real estate agent; and two dogs, Ralphie and Tommie
• Favorite vacation: "The Griswolds in Italy" -- 10 Metcalf family members tour the boot for two weeks.
• Book recommendation: "Richistan: A Journey Through the American Wealth Boom and the Lives of the New Rich" by Robert Frank
• A previous job: Concierge at the Mayfair residences when they opened in Midtown 18 years ago.
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A privately-held company based in Skokie, Ill., the Alter Group owns Brookside Concourse in Alpharetta and Chattahoochee Corners in Duluth.
Overdevelopment, corporate wariness and high land prices have hurt business. But those challenges are forcing adjustments that will result in more thoughtful projects, he said.
Metcalf also shares his thoughts on economic development and the state’s Open Records Act.
Q: Is it harder to do leases now in metro Atlanta with the economy in such poor shape?
A: It’s slower to do deals. I’m in a long, long negotiation with a tenant right now for a renewal and expansion, and it’s like pulling teeth. I think it’s a lot of anticipation because of the election. Everybody wants to wait and see who’s going into the Senate, who’s going into the House and who’s going into the executive role. It becomes business as usual after.
Q: What about finding land?
A: We went through a cycle where land got so expensive because residential guys drove the cost up. Finally, the landowners are getting realistic and reducing their price. Or, unfortunately for some of those residential developers, that land is going back to the bank, and we’re going to see an opportunity to pick up some dirt.
Q: Are gas prices hurting your business?
A:
Gas prices will change our business. Atlanta is the only city I know of where someone will walk a full block to get into their car to drive a block. You can still build a traditional office park if it’s driven by a tenant that wants that environment and it’s what I consider a campus-type environment. But I don’t believe you should develop any kind of office without mixed-use completely in your mind.
Q: Are many companies looking for industrial and office space?
A: We haven’t had the UPSes, the major corporate moves we’ve had in the past. Having land in South Florida, Atlanta and Chicago, I witnessed a process of one company choosing between the three, and they chose the most expensive in South Florida, and it was driven mostly by incentives. I had a great building here in Atlanta. It was the least expensive. Yet they still went to South Florida.
Q: Why Florida?
A: The feedback I got was the young employee base there. Here in Atlanta they were looking at suburban. In South Florida they were also looking at suburban. One of the comments was, “Well, a lot of the young technological population in Atlanta is in Midtown.” We were getting that same [Midtown] demographic in South Florida when we were looking in suburban.
Q: Does the state do a good a job attracting companies?
A: Our economic development folks do a spectacular job in Georgia just like they do in Florida, just like they do in Tennessee. But one thing I’d like to see is a little more executive support for our economic development people.
The head of real estate for Kaplan [University] — I was playing golf with him many years ago and he received a phone call and it was the governor of Florida [Jeb Bush], just to say, “We really would like to see you come to our state. Here’s the number to my office. Anything we can do to help.”
I would bet that our governor makes that phone call, but he probably makes it only to the CEO or the chairman. The influence there is going to be the real estate guy when it’s a big company like that. It would be nice to hear a story like that happening in the metro Atlanta area.
Q: What could the state’s economic development department do differently to help commercial real estate?
A: In North Carolina, Tennessee, as well as Florida, it seems like those states have bigger budgets. A lot of what happens in Atlanta, and in Georgia as a whole, is driven by private enterprise as opposed to state funding. I don’t know if that’s a leadership thing or a legislative thing or where that comes from. Should states infuse taxpayer dollars into these projects? That’s a political thing. The reality is that it works. It becomes political when the dollars reach a certain point. We are competing with other states. And if the other states have the bigger budget, they’re going to beat us.
Q: Are there additional incentives the state could offer?
A: It’s different for every company. Whether it be training, tax credits, cash. State of Florida, for example, can write a check to a tenant. Just write a check, cash money. Now, there are lots of strings attached to that check. You need to provide X amount of jobs for X amount of years. We’re a little more conservative than Florida. I don’t think Georgia writes checks. Which is probably not a bad thing.
Sometimes a project may come into the market and our executive level may champion that project and it gets a lot of attention and it gets pushed through. Then sometimes another project may come through — and I don’t know if it has to do with the weather or what it is — it just gets overlooked and it goes somewhere else.
Q: How has the Open Records Act affected economic development?
A: In Georgia, not good because other states don’t have it. There are economic development people in Tennessee that, if we have any kind of an offering to a company to incentivize them to come, they can see that offering, turn right back around and up the ante. We can’t see what they’re offering. It’s very uncompetitive negotiations. The Open Records Act is a wise thing overall, but it does have a negative impact on economic development.
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