Dunwoody allows State Farm office campus to add hotel, 300 apartments

Developer shifts plan to incorporate a 175-room hotel and apartments into Perimeter workplace district
This is a rendering for altered plans for the fourth building within the Park Center development in Dunwoody.

Credit: Cooper Carry

Credit: Cooper Carry

This is a rendering for altered plans for the fourth building within the Park Center development in Dunwoody.

Instead of more office space, the developer behind a massive corporate campus in Dunwoody will be able to add a hotel and hundreds of apartments.

The Dunwoody City Council on Monday approved a rezoning request by Texas-based KDC to allow the developer to build 175 hotel rooms and 300 apartments on the last undeveloped portion of its Park Center campus. A partnership with insurance giant State Farm, the project was initially going to include a fourth office tower, but the impacts of the COVID-19 pandemic on metro Atlanta’s office market have made that plan no longer viable, KDC representatives said.

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Announced in 2014, the Park Center campus would have had KDC partnered with State Farm to develop it next to the Dunwoody MARTA station between Hammond Drive and the Perimeter. Three towers have opened, totaling more than 1.6 million square feet of offices. A fourth building at 245 Perimeter Center Parkway was slated to add another 700,000 square feet of offices to the campus.

“There has been a fundamental shift in the needs of the campus since we broke ground on Park Center One in 2014,” Jim George, KDC development program manager, said in a news release.

The new proposal calls for 300,000 square feet of office — less than half of the original plan — and 22,000 square feet of retail and restaurant space along with the hotel rooms and apartments. The site will be divided into two towers, a 20-story apartment building and an 18-story office and hotel building. Offices would comprise the lower 12 floors, while six hotel floors would top the tower.

Demand for office space has waned since the onset of COVID-19, which prompted scores of white-collar employees to work from home. In the years since, office vacancy across metro Atlanta has skyrocketed, with the region setting records for its abundance of empty and unwanted office square footage.

Park Center has also faced tenant issues as a result of the pandemic. State Farm, which enacted a hybrid work policy, agreed to sublease the entire 570,000-square-foot Park Center 1 tower to Carvana. However, the online used car seller backed out of that deal last spring. A State Farm spokesperson said in February the company remains committed to its long-term leases at the three existing Park Center buildings.

George said KDC will bring in development partners to handle the residential and hotel aspects. He said during prior city meetings that the apartments will be high-end without any units reserved at below market-rent rates.

Construction on the two buildings is expected to begin in 2025.