Other metro communities hope to emulate Avalon’s success with projects featuring street activity, outdoor dining and unique merchants.
The Atlanta Journal-Constitution talked recently with Toro about the second phase of Avalon and other topics in metro Atlanta real estate.
On the differences between Phase I and Phase II:
The 19-acre second phase will be denser than the first phase and won’t include single-family houses. The first phase has 250 apartments, 100 single-family homes, a Whole Foods market, retailers such as Anthropologie, Arhaus and Tesla showroom, and in-town Atlanta eateries such Antico Pizza and El Felix.
The apartments in the first phase, which attract rents on average of $2.32 a square foot, rivaling Buckhead and Midtown projects, are virtually full and the bulk of the homes also have sold.
The second phase will have 276 apartments, a brick and glass office tower with the new regional offices of tech giant Microsoft and more retail and chef-driven restaurants.
In 2018, North American and partners Stormont Hospitality and HEI Hotels & Resorts will open a 330-room luxury hotel and conference center in a joint-venture with the city of Alpharetta. A second office tower is planned.
“The key learning from Phase I was to densify in Phase II,” Toro said.
“We made a change kind of mid-stream, probably a year and a half ago, and started planning to bring more Class-A office and we brought (developer) Hines onto the team,” he said. “We felt confident that as they did in Atlantic Station honestly, that the next generation off office tenants will want to be in an urban setting albeit in suburbia.”
On where metro Atlanta is in the real estate cycle:
“I think it depends on the product. A lot of people talk about multifamily (i.e. apartments) and how late we are in the cycle. I think the financial markets are starting to pull back. I know they are starting to pull back. We are in the process of trying to finance projects. But it depends on the sub-market and job creation. The latest numbers from Cushman & Wakefield are that there are 1.6 (would-be renters) for every planned apartment in Midtown. Not under construction, but planned. There are just so many jobs.
“That’s not the case everywhere. I don’t think that’s the case in Buckhead. There’s a lot of interest in suburban apartments.”
On MARTA expansion in North Fulton:
Toro has been among the loudest advocates for expanding rail to Alpharetta. Now that the city of Atlanta has voted on a half-penny sales tax hike to fund expanded rail and bus service, Toro said he thinks it is time for the rest of Fulton to up its ante.
Given its density, the Old Milton Parkway corridor where Avalon rises is a likely spot for a station, and Toro points out the city of Alpharetta owns land near the development that could be enticing for station if rail is ever built up Ga. 400. (That also would potentially be a boon to the development.)
He acknowledges past reluctance by suburban residents to embrace MARTA, but he said Alpharetta and the rest of North Fulton “is coming around” on the issue.
“Alpharetta and North Fulton are densifying at an enormous rate,” Toro said. “You finally have the kind of critical mass you need to support transit. Whether a stop is literally beside the conference center, and there is a site (next to Avalon) that the city of Alpharetta owns, or across [Ga. 400] on Old Milton Road. Wherever it is in this vicinity, if you can imagine a one-seat ride from the airport to this city within a city, it’s extremely attractive.”
“I personally, and the real estate community, will be active in the next legislative season to support that.”
What is Avalon? $1 billion, 80-plus-acre mix of offices, retail, restaurants, a movie theater, a future hotel and conference center, more than 500 apartments and more than 100 single family residences.
Retailers and restaurants include: Anthtrubeyropologie, Antico Pizza, Arhaus, Coletta, Crate & Barrel, Cru Wine Bar, Oak Steakhouse, Pottery Barn Kids, J. Crew, Orvis and Whole Foods
Future merchants include: Brooks Brothers, Pottery Barn and Williams Sonoma
Other notes: An arm of financial services giant Prudential acquired the first phase of Avalon and a future office tower site in 2016 with plans to acquire Phase II after it's finished. North American Properties will stay on to run the property.