Brian Leary - The Real Story Behind Atlantic Station

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Hey guys, welcome back to the Sunbelt Developers Podcast. We are joined by Brian Leary, the Chief Operating Officer at Highwoods Properties. Brian, very, very excited to have you. Before we dive in, I just want to give a little update to everybody. We have uh we've hit a milestone for this project uh in September of 2026. We're just two days into October. Um we had a million views in

one month, uh, which has been kind of on our goal list for a while. So I just want to say a a genuine thank you for just supporting this. It's gone way further than I was expecting in the beginning. Um we we've got 10,000 downloads of the the podcast, and it's just up and to the right. Um I think it's it's been very well received. So I just yeah, thank you so much. And I don't know where this is gonna go. We'll we'll see how how far

it takes us. Um we were just laughing earlier. It's like, you know, there's there's more than just developers out there, and a lot of people have made an impact on the Sunbelt. And um so yeah, that that's it. So more more exciting things to come. We have a bunch of hard hat tours that are um in the works and soon to deliver um that you'll get a behind the scene look at at some of the really cool projects happening out there. But um at that, let's dive in, man. Tell

tell us who who's Brian Leary.

First off, Tim, thanks for having me and congrats a million. You know, uh that's crazy, right? Yeah, yeah. Um I I'm honored to be here. I think maybe we're gonna be in season four when this is recorded. No, it's season three.

Season four will kick off early next year. So well, think about that alone, right?

The fact that you have that many seasons under your belt, these many great people uh scrolled through the history and so many great friends on there. So um I love the fact that three people canceled on you today, so I'm the I'm the b the backup. So thank you. Thanks for having me. Seriously, it it's an honor to be here. Atlanta has a special place in my heart. Yeah. Um, this is where I kind of grew up in the business. My girls were born. Um still keep my Georgia Tech football

tickets, which is sort of a suffering uh subscription, uh, but I love it and so glad to be here.

It's good, man. And you y'all are based what, Raleigh?

We're based in Raleigh. We're we're Sunbelt based, right? So 95% of our NOI is in the Sunbelt. We are working our way out of uh Pittsburgh and Richmond to focus more on Dallas's and uh you know Charlotte Growth, which are newer markets for us. But yeah, so we're based in Raleigh, founded there, went public in 94, founded in 78. Um but Atlanta's a big market for us.

Very cool. Um I guess give us the snapshot of what's happening at Highwoods now. Like what are y'all I I've heard y'all are selling off some stuff, you're getting real focused on certain areas.

Yeah, absolutely, absolutely. Not all that different than um kind of our peers in the market. We are focused on making sure that we have a commute worthy experience for the workplace. And I didn't say buildings, I didn't say, you know, high rises, I didn't say anything that might be physical, it's the experience. And so to do that, we either have to make sure they're commute

worthy or change them to be commute worthy or sell them. So we're again we're we're working on um working out of the say bottom 20 to 25 percent of the portfolio, which um we don't think is as as competitive as it could be, and leaning in to markets that are growing. So Dallas, Charlotte, Nashville, Atlanta, Raleigh, those are core

Tampa. Uh that's really where we're focused. Trevor Burrus, Jr.

I know Cushman's got Century Center out there, and I think it was awarded where I share where that's not.

So Century Center, which is interesting here in Atlanta. Yeah. Um so we have a strategy called a BBD strategy, which is a best business district strategy, not a central business district strategy. And the reason why we term that I really is um born out of the GFC when a great deal of um concentration of kind of distress were located in certain areas. We believe

that the best and brightest want to be together in urban locations and suburban locations. So if you think about like even Buckhead, Buckhead would be considered suburban by a New York standard or even a DC standard. So my long story on that, when you think about best business districts, particularly even here in Atlanta, we found that Century Center isn't necessarily in one. It's its own little thing. It's its own little thing. Which is interesting, buildings are really

hard to move. So the old, you know, truism that location, location, location is the most important aspect comes back to buildings are hard to move. So Century Center is actually getting better by not being moved by Choa, by some of the other things. If you go to downtown Chambly, I mean it's it's a really cool village. So we've taken some moves out of Century Center to better position it

for value creation. So it's used to be under a ground lease, it's all fee simple now. And so we're uh we're soon to be demolishing, imploding one of the buildings out there, 1800 Century Center, which is a triangle-shaped uh building, which by the way, I would recommend not building any new triangle-shaped buildings.

Not very efficient.

Not not really, yeah.

So it's this the one that it was like talked about they were gonna do some like senior housing.

We actually we worked super hard to try to figure out how to reposition that, how to do mixed income, senior housing.

But you just said screw it, it's not a good thing.

I mean, yeah. So we kept rewriting the underwriting, right? And each time, you know, the building uh uh even if you contributed the building for a dollar with the hope that it would make it.

Here's a free building. Can you make it a little bit more?

Yeah, it would be really hard, right? And you know, interest rates haven't helped on that. And that so that that makes more sense to be imploded and maybe reimagined. And we had some great meetings. The folks that are running the city of Shamley, both elected and and um staff, are they they they're they're really visionary. They they had 15,000 people at their Fourth of July festival downtown. So we're trying to leverage

what they're doing in terms of placemaking and bring a little bit of that to Century Center to make it not only resilient and commute worthy, but you know and valuable.

Trevor Burrus, Jr. And it's got A-plus access. It's got a lot of good bones too. It just needs a little bit more of a lot of people. It does.

It just needs to become a place, right? As opposed to uh a suburban office park.

Right.

Right. That that's kind of the punchline. Yeah. Right. The evolution. And I think some of your previous guests have hit on it. Like the idea that the best and brightest are aren't going to be together in a workplace, I think that ship has come back in. People realize that they need their best and brightest together. Do they need them Monday to Friday, 40 hours a week? Maybe not. Does technology add flexibility that we didn't have before? Absolutely.

But there's clear conviction from owners and leaders that I we need our people together. Yeah. So when we can create a place that allows them to be better together, we find great value created and our building's filling up.

Right. If you've developed anything, you know this one. The forecast and budget lives in one spreadsheet, the draw package lives in another. And somebody on your team spends the last week of every month stitching them together into a report that's already stale by the time it goes out. NorthSpire was built by a real estate developer to end that. One platform for budgets, forecasting, draws, scheduling, and vendors

across every project you've got. Northspire has facilitated more than $500 billion of projects. Please visit Northspire.com. Again, that's Northspire.com. Now back to the show. Yeah, uh the world's a competitive place. And how can you be competitive and collaborative and creative and innovative if you're just all it knows?

I mean I'm talking my book, but yeah. But we're seeing it. We're seeing the results, right?

Cool. Um yeah, that the final thing I'll say that that whole node, I know Third Nurban's got a bunch going on with the thing. Right next door. Right. And that I there's two buildings that are getting knocked down for the BMW dealership. Um that's happening. Uh that Showa development is really just gonna catalyze that whole area.

Aaron Powell It's amazing what a couple billion dollars can do, right? I mean, and then the other thing about Third Nurban, right, they're already on the greenway. Right? So we were talking about the the next evolution of TOD, formerly transit-oriented development as trail-oriented development. Sure. They're in a great spot.

Yeah.

Right. And they're not making any more land inside the perimeter, right? So um I I'm bullish, right? It's it's cool to see those nodes densify and you know, it'll take a while.

Yeah.

Very cool.

All right. Let's let's dive in. I sure I had heard you had a a pretty significant role in the Atlantic station development. And I'd love to just get like you were at Georgia Tech studying urban planning, urban development. Sure. Just yeah, but take us, take us back there. Where were you at?

The good thing is you have editors and producers who can kind of make this a shorter story, but I'll I'm gonna take you back a little bit. So I'm the youngest in my family. My closest brother in age is eight years older. Um, my dad, who's since passed, if he um his birthday was just in September, he would have been 99. So I grew up with a bunch of older siblings and in traveling. And so we'd go to New York City, we'd go to other places, and um

as I was growing up, I was truly impacted by the built environment. I loved it. I love the the buildings, the connections, and the impact the built environment had on people. And I thought anything could be possible in that. So I had this idea that I wanted to be part of that. So came down to Georgia Tech to get my undergraduate degree in architecture. And at the time, Georgia Tech was on a quarter system,

so I did two minor concentrations in land development and real estate. Because when I showed up as a freshman, I knew I wanted to be a real estate developer. So I showed up knowing what my outcome wanted to be in terms of a job. So I started being fairly deliberate with my classes about how do I start providing myself sort of a resume to kind of do this. So even in undergrad, I started

with this idea. Well, I knew that coming out of Georgia Tech with an undergraduate in architecture was probably not the fast track to get hired by a developer. Because the developer's like, I'm not sure you're an architect. And even though there's a great lineage from Georgia Tech in the development business, you know, John Dewberry, Kim King, John Portman. I mean, there's all these great can connect Charlie Brown um connections

there. Um I needed a little bit of more um probably seasoning or um proof. I remember um he's a dear friend of mine now, um uh Bob Voyles, who was running Heinz at the time, and talking to him when I was coming out of undergraduate, and and I had these ideas. I had this idea called Atlantic Station, a place to live, work, and play, which is the idea of buying the Atlantic

Steel Mill. I lived in the neighborhood home park, which was between Atlantic Steel and Georgia Tech.

I lived there for a while too. Did you really? We're on Ethel Street. Ethel, yeah, sure.

Yeah, I lived on Atlantic for years. That's great.

Yeah. It's uh we had house parties and I met my wife on Ethel Street, and that's it hasn't changed a lot.

Home Park's got a special place in your heart then, right? Yeah, it does. It does. Yeah. Yeah, I'm actually surprised it hasn't changed more because of the synergy between. I mean, right? It's really, right?

It's like a stone throw away from midtown. It's like right across the highway. Yeah. I know there were there were a couple of homes that they, you know, tore down and put some sort of modern box on it, and it just hasn't hasn't changed much. Yeah.

So I keep yeah. So it's interesting. So long story short, yeah um, I tried to co-opt my classes, even in undergrad, to building layers of of uh viability of an idea of buying that steel mill and turning it into a mixed use environment. So back to what we talked earlier about location, location, location. I grew up in the D.C. area. And

the DC area and Atlanta, interesting enough, had about the same population or or you the curves were about to cross. But Atlanta was spread over like 3x the land mass than the DC area. So in many ways, when I grew up in the DC area and saw traffic, I actually before I even came down to Georgia Tech, I worked um in DC at a big architectural firm

called HOK. I commuted in on the metro and I carpooled, I did something called even slugging, where you like stand outside to get in a car with a stranger to so you can use the HOV lane to go in. So I did that before I even came down.

Slugging.

Yeah, I don't know if they do that anymore.

I haven't heard that term. That's like a hitchhiking for professional.

Yeah, now it's probably you know, you might be worried about ending up in the trunk instead of the back seat or something, I guess, with with the world that it is. But um so I had this kind of this idea that I wanted to be a developer. And so I was very frustrating, I think, in many ways, as a student in some classes with professors who have a certain dogma or a certain, you know, rhythm that they want to teach. And I'm like, I I got it. I'm I'm

your consumer, your provider, this is my goal. And so, but I got through it. And so I finished my uh undergrad work pretty early and started working on my graduate work, and then so there's a master's in city and regional planning with a focus on transportation and um land development. And the reason why I come back to transportation is that I had seen in the DC area that traffic was choking

a great deal of the place. And then while I was here in Atlanta growing up in Atlanta as a student and a uh young adult, early 90s, Atlanta was consuming land for its growth basically like 110 acres a day of just growth. At that rate, um, a researcher called it the fastest growing civilization in the history of humanity. Now, Atlanta is a place of superlatives. We love to say

we're number one of this, number at that point we were like, we're not sure that's one we want. And so back to location, location, location. This location between 75 and 85 where the Atlantic steel mill was had tremendous location when you hovered above the map of Atlanta, but no connectivity. So island real estate is great in the Caribbean, but not necessarily in midtown Atlanta. So

that's why I had that transportation angle in in my graduate work, is that my concept of Atlantic Station, even the name Station Trevor Burrus.

I was gonna ask you this. Well I mean, was there supposed to be a train station there?

Well, there is yeah, right. Well, there is one. I mean, there's one literally right next to it called the Amtrak Station. The idea that Atlantic Station, the station could move there and it could become a node of multimodal connectivity at the lower level, similar to Penn Station in New York. Sure. And then that was the idea, it could cap the site, the environmental contamination could be capped underneath, and we could build on top. There's very few new ideas

in cities. Cities have proven for a few thousand years to work really well in terms of organizing smart people. And so my goal when I was in school was just to pay attention to it. And then how do I incorporate that into a plan here?

Got it. Okay. So so there was a plan to move the ant track.

Trevor Burrus, Jr.: Well, in my plan, I mean, like in my yeah, thus the name station that it would be that I'll send you the thesis, you have trouble sleeping. I mean, it's uh right. So yeah, I'll get through it. Yeah, if maybe over a few weeks you might get through it. Um but the idea was hey, on the base level, we're gonna have trains, you know, Amtrak, we'll have regional trains, we'll have buses, all that stuff. And the idea was to cap it. The idea when I was coming up with the concept of Atlantic Station,

there there was no such thing as a brownfield program. And a brownfield program, I don't know if uh folks listening have heard about that, but they've now um been universally accepted in 50 different states and from the federal government, it's a way to clean up contaminated properties. And it's either real or perceived contamination. This was a steel mill since 1901. I mean, for a hundred years there weren't any environmental

controls. And, you know, you kind of throw it out back.

Yeah.

So my idea was, hey, because the reason why this wasn't developed for years is because people said the cleanup would be just too much. And people said $100 million for cleanup. Basically you have to remove everything on the 1990s. In 1990s, 100 million, right? Like so this that's why nothing happened. Yeah. So the mill had to keep operating. It was operating at a fraction of what it did years ago. So my idea was cap it, but

don't have to remove it and then build on top of it.

Got it. Support for some developers comes from Northspire, the development intelligence platform built for real estate developers. Please visit Northspire.com. Again, that's Northspire.com. Now back to the show. So as a student, I guess were you just kind of like walking around the site and like did they throw a hard hat on? Can you walk through that?

No, so definitely could not walk around the site because they had you know a big fence and wire at the top. Sure. They were an operating steel mill.

Yeah.

Um and I living in the home park, um, I got a lot of good views of it though. And being at Georgia Tech with resources for research, I could dig into all kinds of other things there. Um and as it turns out, the gentleman running the Atlantic Steel Mill, the CEO, Georgia Tech grad. So the Georgia Tech connection did absolutely help. Give you the the

a couple of the punchlines. At the time in grad school, I was also working downtown with Central Atlanta Progress CAP, you know, and that it had a subgroup within it called COPA Inc., Centennial Olympic Park Area. So this was the a group of loaned executives working on bringing together the land assemblage to make Centennial Olympic Park happen and then figuring out how to catalyze development around

it. And so I had a resource of loaned executives from Bell South at the time, Georgia Power, um Technology Park, Atlanta, all these folks. So I could pepper them with my ideas for my thesis. And so I got a lot of really good ideas. It was pretty awesome. And then um one of the guys down there, a guy named George Eichler said, Hey, you need to go share this idea with my boss, Charlie

Brown. And so sure enough, I went, Charlie Brown was the CEO of Technology Park Atlanta. Um, they were developing Lennox Park, Technology Park, and they eventually did Johns Creek. So I walked out there, and um at the time, along the Atlantic steel mill, um, along 14th Street was Georgia Tech's golf practice facility. So that was sort of adjacent to it. I showed it to Charlie. Um

he said, Yeah, well, we got to do something about this. This is great, let's stay in touch. My advisor in grad school was an amazing woman named Katherine Ross, who is a professor and tenured professor at Georgia Tech, but had her own business as a uh transportation consultant. Um she was she broke down a lot of barriers for me through grad school to be able to do what I needed for this. Stars started their

line. Charlie was able to put in a bid for Atlantic Steel, kind of with us thinking about what Atlantic Station could be with my thesis. And funny enough, uh the Atlantic Steel CEO said, Oh, Charlie, we just got under contract with this guy named Jim Jacoby. You all should get together. So then we all got together, and that's sort of the the short version of turning this thing into what it is today.

Sure. I I I was about to ask this the like what was going on in the market, because I used to work with this guy, Rick Nash, who is a you know, A office broker, and um he was running around with ATT, made tons of money, but um he's he's still going, but I I think this was around that time. I he had I think pitched to get the listing on it or something. I just I remember him talking about like, oh yeah, there's

so many brokers swirling like a huge piece of land right in the middle of the city. Like I I'm curious, like you know there are other bids you know.

Um I don't think there was a broker involved at the end of the day when he did the transaction. Yeah, but um so there were other bids. The challenge was no one knew what the cleanup would have looked like or what the cost would be. Yeah. So if I bought it for a dollar and it cost me a hundred million to clean up, it cost me a hundred, you know, million dollars. And so that was the issue. And

so what we were able to do while our bid were so Jim Jacoby, Jim Jacoby is.

You had lunch with him yesterday. I did. It was great. Yeah.

He and I cut up, man. He looked great, and we were just started to reminisce. And but he's 83 years old, and he already told me about the seven other deals he's working on. That's amazing. I'm like, and he's like, oh, he's I mean, he's all kinds of stuff. Stuff that it's not even just real estate. He's gonna harvest things from the sea and clean it up and turn it to energy and all that. I mean, it's pretty wild. So so Jim is um an inveterate entrepreneur. He is

um he's a deal guy and he got it under control. So location, location, location, three most important words. You know what the fourth is? Control. Hands down. Jim had it under control. So he like, you know, talk about the dog that caught the bus. That was Jim. And uh not to go into the whole Jim Jacob story, Jacoby story, but Jim was a prolific Walmart developer. And um, that might be pejorative

in some circles, but it was very productive from a development in a flywheel um standpoint. It keep going, exactly. And so there was a big hole inside the perimeter for Walmart and Sam's. And so Jim got the property under contract, even just for the idea that maybe Walmart and Sam's wanted to be there. So imagine had it just been that.

Be a little different.

Be a little different, right? Um so what happened is that it was really good timing that Jim had the right engineering firm. At the time they were called law engineering and then they're called Mac Tech, I don't know what they're called today. And we came up with an idea called remediate to use. And it was a new idea for Georgia, not a new idea for Pennsylvania or Pittsburgh. And that was also in my thesis,

remediate to use, which means that if we're not going to come out here and turn this into an organic farm, right, then the level of remediation on the property might be a different level. Oh, by the way, if we also create barriers between people and those contaminants, why does it ever need to leave?

Yeah.

So that opened up a completely different avenue. Because don't forget, Atlantic Steel, the selling entity, at the end of the day, from an environmental standpoint, is sort of on the hook from a responsibility standpoint. Trevor Burrus, Jr.

They can't just walk away. Trevor Burrus, Jr.

They really can't. Now it's economic at the end of the day. They can say, hey, how bad do you want it? Exactly. So the fact that we had a way to move forward that remediated the site at a much lower number, kind of put brackets around.

Sure. Doesn't have to be slightly clean at enough.

Trevor Burrus, Jr. The other kicker is there's a there's an engineering component to the cleanup of Atlantic Station. I kind of hit that with the the remediate to use. There was a lot removed. There's 130,000 cubic yards of it.

Wasn't that like 9,000 truckloads or something like that?

I mean it's like more than that. And a lot of it actually went out on train, too. Wow. Right? So so that's the bad or good news. It would be a steel metal for 100 years, it's gonna have an impact, right? They're producing things. The good thing is that it's it's um it's not things that end up in like Aaron Brokovich, right? It's metals. So it because what happens is when you make steel, the

impurities that come out, it's called slag, which looks like gravel gets put out on the site. So where that where those tested higher for lead and things, they got removed. Other stuff we could we could encapsulate. So that's just the engineering side. Then there's the other side is the liability side. So at the time, right, a new insurance vehicle started to arise called pollution limited liability

policies, PLL policies. So it turns out to do something like this, you need not only equity of your own, right? Then you need an LP equity partner, then you're gonna need debt at some point. Long story short, AIG, we a friend of this group, we asked AIG, who do you think would do something like this from an equity standpoint? And they said, why not us? We're the largest issuer

of pollution limit limited liability policies. We understand this. We're doing it in New York, we're doing it in New Jersey, we're doing it in Pennsylvania, Georgia.

Was that your plan going into the meeting? Like let this be their idea. I don't think so.

No, it actually happened. It was a two-person dinner up in New York. Yeah. And then out of that came helped me. Yeah. So it it um so those two um levers allowed the the remediation to move forward, which allowed us to be the ones to do that.

Aaron Powell So Did it come out to $100 million?

No.

No, no, but it didn't absolutely not. Because we did not have to remove so much of this site. So much of it's encapsulated and but I think it probably ended up being maybe twenty. Uh. Right? All said and done of of remediation and removal.

So we've got the site, you got it under control. Yep. Got a path to cleaning it up. Tell tell me so it wasn't gonna be a Walmart. What was the evolution of what was actually gonna go there?

Well you're gonna have to cut this one down. Big time. So there's a lot of moving parts with this deal. So going back at this time in Atlanta, I talked about Atlanta was the fastest growing civilization in the history of humanity. Okay?

Who said that?

I just got named Chris Leinberger. Okay. He's a was a Brookings fellow. He's he's a ULI trustee. So he he's an interesting cat, and he'd be a great interview.

Yeah.

Um and they had done the research on this. So Atlanta was spreading out. This at this point, Atlanta, the Atlanta region was 110 miles north to south. That's the entire state of Delaware you could fit in there. Which means we were driving almost more than anyone else. So when you think about environmental quality, you think about multiple components. You think about land environmental quality, which we talked about remediation. There's water

quality, which Atlanta's had issues with through the years, quality and quantity, and then there's air quality. So Atlanta ended up being in nonconformity with the Clean Air Act. And what happened, Atlanta got shut down by the EPA for all transportation funding approvals, et cetera. So we got rezoned in the spring of 97 for Atlantic Steel with the city of Atlanta and had 28

zoning conditions. One of those zoning conditions was a connection across the interstate.

This is the big, the big bridge.

The big bridge, the 17th Street Bridge, which is 135 feet wide now, by the way. So Jim's maybe dog that caught the bus saw Walmart, Sam's, no bridge, no this, no that. Clean sight, yes, do that. As the as you started to kind of dance with the 800-pound gorilla, which is the government, you stop when the government gets tired, not you. And so that connection over the interstate, like that's

a whole nother level of okay, now how do we do that? Right? No private developer one can afford to build a bridge over 21 lanes of interstate, nor do they have the right to either.

Yeah. This is the EPA telling y'all you got to build a bridge.

So no, first it was the brid first the bridge was required by the city with regard to zoning. Okay. Zoning. To do that, we're gonna need a public-private partnership with GDOT, the city, federal highway would have so transportation. Atlanta had an air quality issue. Atlanta gets shut down because of its air quality issue. What does it mean shut down? No new transfer, no new capacity

adding transportation projects, because Atlanta's air quality issue had been tagged to traffic congestion. We were all the tailpipe emissions were creating a problem. So all of a sudden we're feeling good, we had momentum. And by the way, this site had a hundred years of deferred infrastructure. So when we ended up demolishing it, we had to deconstruct the

mill because it it had, you know, whether it's asbestos here or whatever, so they take it down piece by piece and send it away. We started removing the infrastructures on site. We had pipes on the site that were still carrying water for the city of Atlanta that came through the site, went out, made out of wood.

Made out of wood. Right? Right. No, well it's funny.

As long as water keeps flowing in the wood pipes, they're okay. But so but it's crazy. We had wood pipes. So we then had to also have a partnership with the city. This is before the moratorium that I talked about.

Yeah.

So we ended up establishing the second ever tax allocation district in in a partnership with the city in Fulton County and APS. It was the second one established, the first one that was established. I happen to be a part of around Centennial Olympic Park. So I had a little bit of experience doing that downtown. We followed suit here with the second one. This is the first one ever to issue bonds. So we had a hundred

years of infrastructure that they go in place. So all that's moving to create a thing like a bridge, and then we all get shut down. So it's all of a sudden we've got all this money in, all this money in pre-development and master planning. So we started the new, we needed more density. The city wanted more density, more density creates more value. You really need to be able to have density on the cost, not only for to buy

the land, we end up buying the land for $76 million, 138 acres. Um that included that was a clean site. So you could say we bought a clean site for 56 or a site that's 76. So then we ended up having to form a public-private partnership with the federal government through EPA to allow this bridge to move forward as uh I could go way deep on this, but

it basically a thing that made the air quality better by building this. Because if we built our 12 million square feet on this 138 acres, it was absorbing 12 million square feet of growth at the perimeter.

Got it.

Instead of so that that 12 million square feet would have been on thousands of acres versus 138. And so we were able to prove that if we did that, you would actually improve Atlanta's future air quality than where it was going. So that's I mean, I don't know if anyone's still listening or they're awake, but like this was super complicated. And we had a number of curveballs that continue to come our way, but I would argue each curveball

made us better, made Atlantic Station better. We got more people under the tent, more momentum. So coming out of all of that, who are my partners out of that? Not only EPA, but Trust Republic Land, Environmental Defense Fund, Sierra Club.

Yeah.

I mean, which is interesting bedfellows for a developer. And with the the interesting thing about Jim Jacoby, prolific Walmart developer, also arguably one of the most committed, passionate, sincere environmentalists. So he had a bit of an awakening himself going through this process to being committed to saving the earth through what he did.

Very cool.

Yeah, pretty cool.

Just taking a couple steps back. Did you know you were in like a very exciting project at the time? I don't know if you were married. Like, were you like coming home telling your wife, like, hey, babe, I think we're we're gonna make something really cool happen? I was married to Atlantic Station.

That was like I it um and I I'm in my mid-50s. I have two girls, um, a freshman of high school and a seventh grader. So I'm a little old, like most of the parents are younger. And um it's a young man's game, but I'm so glad that I have the maturity now at this age to have the time for them. I'm still working

a ton of hours, but but I was solely focused on and married to Atlantic Station. And I think we needed it. Like it just it it um but it was a big project. I don't, you know, it's interesting, Tim. You asked the question, did I know at the time? I needed a job, man. Like I'm coming out of grad school and let me pay my bills. I think I I like look,

I'm uh not the tallest, not the fastest, not the strongest, not the brightest, definitely not the best looking. So I've had to be scrappy. So so like I think my buddies gave me the kind of nickname, the honey badger, you know, when that like that epic video came out. That's so I was just a grinder. And um, but loved what I was doing. The idea that we could create a place that would impact

people. Yeah. Like that was my fire. And man, when it like just seeing when it opened and the memories and the babies that were born there and the proposals that were made, and I don't know, it's pretty cool.

Yeah. And it's it's really cool to to hear the whole story and just how that natural curiosity that you had so early on really manifested and you you got to really be a part of something so so quickly right out of school. Yeah.

I mean, I it was very fortunate. Yeah. And clearly a PhD times two in this business and life and everything.

Aaron Ross Powell, did you have any other sites that you were looking at of like, hey, we we should change this? Or after Atlantic Station. I mean, was there Sure.

Well, across the country for sure. Yeah. Um I don't sleep much, and so I like to like there's I grew up in the DC area. There's a kind of a uh a mall, it's called Landmark Mall between the Beltway and downtown. And it you know, it was such a great location, but it really was a tweener. And now the guys have redeveloped it and they're adding a bunch of density. And so I that's the kinds of things I've been looking at. Trevor Burrus, Jr.

You've kind of kept kept your eye on a couple of those. Yeah. Like that could change.

Have for years, right? And and I think um I just love that. And what's cool, uh, my wife got again kind of married late in life. She's comes from a real estate background, she's in real estate. So we travel even as a family. We're still looking at projects and deals and discovery and places like that.

Aaron Powell Very cool. So okay, time timeline, graduate masters, go straight into Atlantic Station, work from Jim Jacoby. How long that was eight, nine years?

We get we get rezoned in ninety. So I started kind of working with those guys in uh sort of like I I started working with them, but like trying to pitch me to be part of it. Really in 97, we get our rezoning in 97. I joined the day I graduated from grad school in 98. We um got under contract, then we closed on the steel mill on December 31st of 1999,

not knowing if the millennium like bug would turn the next day in the world would end or not, right? But thankfully it didn't. Um so then basically 2000 um took a year of deconstructing the mill, uh, 2001 remediating the site, 2002, putting a hundred years of infrastructure back in the site. So think about that if you think about timelines of development. Everything's

going out the door.

Yeah.

I mean, nothing coming in for that long, which is tough. But we started to end up, you know, tying in the other partners. We wanted to be master developer to start off with, and that's a whole other angle. We wanted to be master developers. And we had contracts with a multifamily developer who was the uh gold standard name here in Atlanta, and um they went public, they evolved

as an organization, um, and they had to step out kind of at the last minute, like, hey, we're out. So then we had to scramble and get a uh backup you know multifamily partner, and that ended up being a great move because we found uh someone of Kindred Spirits in the Lane Company and Mark Pollock. If you haven't had Mark Pollock on the podcast, you've got to have Mark.

I've left him about four voicemails.

Okay, I'll work with him a little nudge for me.

Yeah. Totally. I'll work with the same. Some of these older guys, they just don't they don't want to cut I don't know what it is, but we're working that well, yeah.

Well, we'll do the angle as a chef and an artist. That's his passion now. Uh-huh. And affordable housing too. Like so anyway, so Mark and and and the lane company retail. We had uh the Mills Corp, which has now been rolled up into Simon many years ago, was kind of committed on the retail. A lot of their equity was offshore. They, you know, their world changed at

the last minute. They spit the bit on the retail. So we had enough momentum on prospective retailers. We leaned in and said, Fine, we'll be the retail developer. And then on the office, so the way the way, like, in my opinion, development works, right? Number one, the number one amenity for any commercial real estate, forget industrial outdoor storage. To me, that's that's uh covered landplay.

The number one amenity is a neighborhood, hands down. And the key to a great neighborhood is neighbors. And by the way, the neighborhood is also the most expensive and difficult to change. So while I can change my address, I cannot very well change my zip code. So you need the residential base first. You need people that to call this home. So retail follows rooftops.

When you have a place that people live and people play, then people want to work there. So bucket, like I think about all these places like perimeter had the rooftops, the mall came there, and I have a place I live, I can shop. Then it became an office market. It goes back for hundreds of years like this. So we needed to get the residential in there, we needed the retail. We then we thought, well, office,

office might be one of the more easy, or actually, multifamily to me is the easiest to develop because it's all spec. Easiest, I mean in course. It's all hard and it's all difficult, particularly right now with interest rates and different things. But multifamily is always spec. Office, you introduce this level of pre-leasing. Is it an inventory market? Is somebody going to commit before you see it? I mean, that's that that's difficult. But when you're actually building the mousetrap,

it's not that difficult, right? And managing an office building property management-wise, it's it's you know, it's a little harder than industrial, but nothing like retail, nothing like multi, nothing like hotel. Anyway, so we ended up, we find ourselves be now the developer of the retail and the office, because different folks have kind of you know uh disappeared on us. I'm thinking about also we're trying to do all this. I talked, I talked about we closed

down on the end of 99, 2000 deconstruct the mill, 2001 remediate. What happened in 2001? We had the the dot-com bubble burst, and then we had the whole world change on September 11th.

Yeah.

Right? Like, and by the way, our partner was AIG. AIG, if you want to get on Google Maps, they were headquartered at 70 Pine Street, steered right out at the World Trade Center. So we were on one of the first flights back to New York, um I think it was the Tuesday after, to the world to to lower Manhattan to meet with prospective uh debt participants in Atlantic.

I mean, it was so we one thing after another. Yeah. But like Jim Jacoby and I were in Miami on September 11th. We he text we text each other every September 11th. We were in Miami on a ULI panel about financing mixed use. And one of the panelists was a vice president from the Schorenstein group who had recently closed on their lease for the World Trade Center. So I mean, it's just like it's all very surreal.

Yeah. The fact that we were able to pull it off. Look, there's a lot of things we wish we would do different in Atlantic Station. Yeah. Sure. Right. But like the transformation of 138 acres, the connection of the 17th Street, you know, lateral connection from east to west. Uh I mean, it's pr it's pretty cool, right? I mean, it you know, and it goes through these evolutions. I mean, she's over 20 years old now.

Yeah. Right.

So sad to see the grocery store closing, but someone else might come in there. And you know, so it'll it's evolutionary.

Tell me about the Millennium Gate. Yeah. How did that? Yeah. Love it.

I haven't asked no one's asked me this question in a long time. So one of the and so you asked me a little bit provocatively before that I think the tape started rolling about the belt line and transit on the belt line. Won't go there yet, but I will tell you this. When you have an idea that um gets adopted and embraced by others than you, and it gets propelled forward by others,

that's actually a really good thing. And that's the flywheel that we started to have with Atlantic Station. Folks were like, huh, I guess you actually are gonna pull this off. Oh, it's actually happening. And look at this is pretty cool. And so we um, and and I there wasn't a meeting I wouldn't, I would never take. So I would sh tell the story of it to Atlantic Station to almost anyone and anyone. Like I had Dallas Austin out there, I

had Clifford Harris out there, I had Chris Tucker, I had Rodney Cook. So Rodney Cook grew up here in Atlanta. His father ran for mayor, he was an alderman back in the day, maybe city council member. Um as a student in um high school, he like chained himself the Fox Theater to save it. By the way, he would be a great interview. You know,

he also now has a pretty senior role at the federal level as the um head of the fine arts commission in approving the ballroom at the White House and other things. Anyway, he's an interesting guy with some real passion around classical architecture. And we gave him the tour of Atlantic Station through neighbors. Actually, someone who worked on the team was literally a neighborhood in Buckhead

with Rodney Cook, and I think met Rodney one day when Rodney was in his front yard on a horse. It's a whole story for another day. And this is in Buckhead. And Rodney had been working for many years in Washington, D.C. with Senator Paul Coverdale and Senator uh Moynihan. Coverdale from Georgia, Moynihan from New York.

And if you know anything about Washington, D.C., Washington, D.C. was a master plan city laid out by Pierre Lafont with a series of a grid of streets with diagonal streets that were avenues that when they intersect, create circles and squares. You can look at it. And you know things like DuPont Circle and McPherson Square, a lot of people know those names. Most of them have been developed. One of those that have not been

developed is called Barney Circle, where Pennsylvania Avenue heads out kind of across the Anacostia River. And Rodney was working leading up to the millennium, the year 2000, to build a kind of monumental arch to peace and prosperity of humankind in this circle, right? With these

two senators, with the National Capital Planning Committee, all these folks up in DC. Um and it was sort of like in DC it makes sense, right? That okay, got it. That's what I see. Yeah. Lincoln Memorial, Jefferson Memorial, got it. And the idea is that they would do the first one in Washington. And then the idea is that we might do these in other cities. So if you go to New York City, you go to Washington Square. And so Rodney, so

pitch was why not classical architecture, why shouldn't it still have a role or a voice in the conversation of the modern world, primarily on DC? But long story short, both senators pass away within a short period of time. We end up with a change in D.C. And so the idea was D.C. first and elsewhere. We showed him our master plan that we had built

where 17th Street came and split and created this great park in the middle called the Commons. And he was like, wow, if it'll because he's from Atlanta, so he had hoped someday I could come in Atlanta. He probably had ideas around Peachtree Street. He said, This is where it could be. This is this is a new thing for Atlanta. Would you ever consider it? And I can tell you I was a little skeptical. Because I'm like, what wait

a minute. Like, what are we talking about here? And by the way, have you been there? I have. Have you been in it? I have. Okay, got it.

I've met Rod. Yeah, yeah. I've just I've heard I've heard his side. Um just keep my mouth shut because they got to be. Well, let's see if you calibrate it. Yeah, right.

So I mean, his side, gift to Atlanta, all this stuff. Yeah. Right. And and he, by the way, he had engaged some of the best um classical architects in the world, right, out of out of London and other place, like to be part of this. And so we challenged him. We said, Rodney, first and foremost, like you have get

we'll work with you in terms of the land and some of this other stuff, but you have got to get a bigger tent and get some other people on board. And I'll I'll give you my my punchline. I we were not interested, um, we we were skeptical, which we should be on anything like this, not of Rodney per se, but just of this, that we would only allow it to go forward if we knew there were enough funding to build this thing and like lock it in like and

it could just be something to look at as opposed to even occupy. So we needed to make sure there was enough money in place to build this thing and be done. And he said, Okay, I got it. And so I had a good fortune on a summer trip. I went to England and I had I went out to the f the forge where the sculptor actually had his

works that he was talking about doing. So the idea there'd be a gate and there'd be sculpture and thing like this. And I went in there and I saw the mock-ups, I saw the bronze being poured, and I was like, this is amazing. And and Rodney had mentioned who was involved. I said, Rodney, look, if you can pull these people together that you've kind of mentioned, and he mentions them sort of off the cuff.

He's not necessarily name-dropping, but you start adding these names up, you're like, geez, Rodney, this is pretty big. I said, if you can put this group together for three days, I I bet and sure enough, he didn't. So he came back, and next thing you know, we're at, you know, the Buckingham Palace Gallery meeting with the Queen's Gallery with the sculptor, and we're going out to Blenheim Palace, being hosted by Lady Diana

Spencer Churchill. Jeez. Connect those names. Spencer, which is Diana Spencer, cousin of Diana Churchill Winston's great-granddaughter. So we're heading out there. We're going to Culane Castle off the the coast of Scotland, being hosted by Susan Eisenhower.

Like, what are we doing? It was wild.

No, I felt like forced gum a little bit. You know, I just didn't have 20 Dr. Peppers, right? Yeah, yeah. And and the folks that he had on we brought on that trip were the right ones who said, we'll make it happen. They were core Atlantans. They contributed. And and and and so it was my idea. My my thought was that here's someone and another group who are willing to invest

in a simple idea individually I had that got a lot better with a lot of other people's ideas. Um but we didn't just let them do it as we made him like slightly turn it and do some different things. And um, you know what's interesting? The kind of ivory tower pointy head architectural critics and stuff like that were you know, were aghast that this, you know, you

know, Arc de Triumph thing came into Atlanta. But you know what the general public love it because they're like, hey, that's permanent, that's classical. Right. So don't overthink it sometimes. But um, and by the way, it's been a great association, I think, for Atlantic Station because of what Riley and his group did, the National Monuments Foundation. Then they ended up helping, you know, create Cook Park here and downtown. And I'm not sure he

would have gotten to be able to do that if he couldn't show look, we we you know pulled this off. Yeah, yeah. Exactly.

Yeah, and it's it's it's nice. You know, classical architecture just it it lifts up the area and it it inspires us.

Well, so my goal for Atlantic Station architecturally is that it doesn't um it's not of any time that it actually feels evolved over time because that's the only way that it will be resilient over time architecturally. You can go to a lot of projects, and that was a word that was never allowed to be used whenever we talked about Atlantic Station. It is absolutely not a project. We were building a place. And this was even from day one. Um

if you think about like that, like you can go to so many projects and you're like, I I know when that was built because of the colors, the stone, the concrete, the dude ads on it. We were super deliberate about uh diversity of architecture, diversity of architects, diversity of ideas.

Timeless, timeless look.

Yeah.

So all right, let's let's keep going. You we need to get to like modern highwoods and all that stuff, but I I want to ask you, you you served on the belt line.

I did, yes.

For three years? I did, yes.

So tour of duty, so depths of the GFC. Yeah. Uh good friend of mine, connection through Leadership Atlanta, who's a uh had his own uh executive search firm. Um I said, let's get together for coffee or did you go through leadership?

I did.

Yeah, leadership atlanta, class of 05. Nice.

I'm I'm in lead right now. Oh, are you fancy?

Love that. Let's say touch on that. I would love to um hear how the It was great.

We just had our little opening retreat, and then um I guess you probably saw Pat last night. I did.

I mean, uh Pat's amazing. Pat Upshawn Monteith, if you don't know her, you should. She is an institution in in the best sense of the word here in Atlanta. She's impacted so many lives of folks who've gone through there. The organization is so exceptionally well run and resilient. Um and man, like I don't know what she's doing, but like she doesn't I think she's younger, looks younger than when I left, you know, fifth almost 15 years ago. She is she's amazing. Leadership Atlanta

is a tremendous organization. Lead Atlanta, which is um uh for kind of the younger cohort kind of building into the slipstream to someday do Leadership Atlanta. I I would argue um Atlantic Station was definitely impactful um professionally, hands down. Personally, my experience with Leadership Atlanta was the most impactful time that I had in Atlanta.

Yeah. I just I've I've heard stories about the opening retreat, and you have all these A plus executives coming into a room and I don't I want to say it's called hazing, but it's it's a lot of like, hey, we're gonna get you outside of your comfort zone in the midst of your peers, and everybody comes in with their shell, and this is me, I'm you know, Mr. and Mrs. Professional. Absolutely. You've got, you know, usually surrounded by your team and comforts and and um I mean Pat Pat's just

that's her gift. She's she can disarm people and and get them outside of their comfort zone.

Well, to your point, and someone you know, Ken Ashley, right? Uh a longtime graduate. When someone like that who's an alumni of Leadership Atlanta Atlanta gives four days just to show up for the retreat, yeah, like that tells you something. Right. Pretty pretty cool. Yeah.

Okay, so okay. So what was the con So you're doing doing Leadership Atlanta and there was a connection there that got you into belt line involvement?

Thank you for the reminder. Yeah. Right. So um we're talking about when we get together for lunch, and he's like, oh, let me tell you why I want to get together. Uh there's there's an opening coming up to lead the Atlanta belt line. I'm like, all right, let me help you with that. I think I have names. How about this person? How about that person? No. And he kind of he's like, after like four different folks, he's like, I want to talk to you. Would you have any interest? I was like, holy

cow. Um first off, I was like, well, uh I am not so sure. You know, like that's a whole nother like public realm. I'm a developer. You know, well, at the same time, um in the Atlanta Bell Alliance Defense, the global financial crisis, I'm at Atlantic Station. At this point, I'm working for AIG. AIG ended up, you know, growing

its investment so much so that it basically just um bought out Jim Jacoby and owned Atlantic Station LLC. So I was Atlantic Station LLC number one employee, and then uh AIG bought it out. I joined AIG. So here I am with AIG, Global Real Estate, which was an exceptional organization with offices all over the globe, now getting kind of sucked into the maelstrom that is big AIG

and the too big to fail, but not too big to break up and sell everything that isn't tied down. So it was sort of uh interesting timing. And um he said, like, we'll look into it. Because at the end of the day, Atlanta belt line, you could call it a real estate development project. It's so much more than that. But the more I thought about it and dwelled on

it and prayed about it, is that this could be an opportunity for me to give back doing what I love, which is kind of bringing the right people together in a room and you know, making one and one equal three. Um so the more we talked, the more we talked, the more I looked into it and kind of talked around it. A good friend of mine from graduate school was a guy named Ryan Gravell. So when I was sitting there late

at night in the lab working on Atlantic Station, he was sitting next to me working on the belt line.

I didn't realize the timing was that. We overlapped.

Yeah, and and um two iconic projects out of the thing. Yeah, something in the water at the time, right? It was fertile ground. And um so then it was also a chance to lead an interesting team to kind of take it to the next level. The first CEO, Terry Montague, um got the organization together um, you know, under the leadership of Shirley Franklin and Kathy Willard on City Council and got

some great momentum with uh alignment being secured and some of these other things and the organization, like and the infrastructure of a tax allocation district and some of these other things.

Like where where was the belt line at at that point? Because physically because it's kind of timely we're talking about this. I think you saw the headlines. They've acquired their final piece of property, they own the full 22-mile loop. I think I saw a headline like yesterday. Amazing. Yeah.

Yeah. So nothing. So they had only acquired what is today would be known as the East Side Trail. Okay. And they um Atlanta Beltline, right, took a lot of heat for acquiring it for a huge number that gave a huge profit to a former Four Pillars awardee, Wayne Mason, Gwinnett developer who came in and got the segment under control from the railroad there on the east side. Basically

from kind of Ansley Golf Club, kind of there, down to Piedmont Park and a little bit south of there, like a little farther south to Krog, probably would be that segment.

So like the the main, that's the main drag.

Exactly. That's the main drag, right? So that was under control, but it was overgrown and nothing there.

Yeah.

And they had just started kind of with machetes hacking out sort of a hiking trail, and we we were doing cleanups on the on the Atlanta Belt line. But that was it for that time. And so, long story short, my three years there, my goal was to get a stake in the ground. There's a very controversial but prolific um uh person in a guy named uh Robert Moses out of New York. He's long since passed.

And um Robert Carrow wrote a Pulitzer Prize-winning book called The Power Broker. And and Robert Moses got I've heard it's an amazing book. Isn't it like a thousand page? It's like a thousand page, yeah. It's like that thing, right? So I showed up at the Atlanta belt line and handed them out to everyone, and people were like, oh my God. I'm like, look, the first part's really slow, you gotta get through that. It's the middle, the last third you don't need to read. It's kind of the, you know, there's wheels coming off. It's

the middle part. And or or you could just take one thing from it. One single line from that thousand-page book about a guy who got LaGuardia Airport done, who got the Long Island Expressway, you know, all these belt parkways, Jones Beach, all these bridges, tunnels, all this stuff. Prolific. One single line from a thousand pages, and this is it. Those enough brave enough to drive

a stake in the ground, right? Very few are brave enough to pull it out. So just get it started. Get it in the ground. And that was my passion when I for the Atlanta Bell Line when I was there. Because look, the the I think when the Atlanta Bell Line Inc. hired me, they were very, and they said this to me, the board and folks were very concerned that, hey, this is a safe harbor during the GFC, you're gonna be here for a year and gone. And and I

said, I can't guarantee anything, but like, no, I end up being there three years. Um, maybe it was a year longer than I probably needed to be there, but three years. Um, and my goal was to get that stake in the ground. And that's what we did with the Atlanta, the East Side Trail. That's what we did with Stanton Park, the skate park. That's what we did with getting the quarry under control. That's what we did, the fourth ward park. I mean, just think about that alone. Like by by striking

a deal with the Department of Watershed to not build the vault, to build this park, allowed us to negotiate the sale of City Hall East to Jamestown. So I was intimately involved with that and making that happen. And remembered a young kind of project manager named Jim Irwin, who I was greatly impressed by on Catherine Kelly and and the team at Green Street and then Jamestown and Matt Bronfman and this guy.

So there was another that was another place that something was in the water there. I mean, the Jamestown class of constant. 100% out of third Nurban, and you got all these other guys that have just sprung from there.

Right. And we got and and we got a trail and in Buckhead, you know, that the spur trail, the idea of creating these spurs. And a lot of people were critical, like, oh, what are you doing? It's only this long of a trail. And and our goal, this my goal was to get the belt line almost everywhere so someone should say, I want more. So like even that little bit Tanger Creek Trail and Buckhead, it's not much. I remember when we because I lived over

there, you go on it, turn around, come back. Yeah. And people said, I want more of this.

So that that turner of the staircase there? Yeah. That was like our backyard. We were in those townhouses up until like six months ago. No way. That's so cool. Like I outside of our window, you see the trail. I so I I used to run that um that trail. You go around Bobby Jones, it was exactly 3.65 miles. Very good. Yeah.

Yeah, you're 5K almost. Yeah.

Yeah, yeah. No, it's uh and it it's amazing. The the canopy back there, and I uh we heard they were just about to start construction and obviously our family was growing, so we needed a bigger house. But I believe they started on construction behind it now that goes over that kind of spillway and then connects over to the west side.

Oh, well, and I think they're gonna they have the then they bought the property right there on Peachtree. Yeah. Right?

Where that little club was.

Right. To be able to connect. Yeah. Which look, I I have nothing but great things to say about the idea about the people of the organization. I think Clyde Higgs has been an amazing leader. Trevor Burrus, Jr. He's coming on in a couple weeks. So he's fantastic. And um Yeah, it's but it but like and this is the tough thing. A few folks were there when it started, got a few folks on

board, they got the momentum, but it is an idea, not a project. It's an idea that's much bigger than the original thesis, it's a much bigger than the original city council approved idea. And it's it's had to go through an evolution, and it still is, and and that's painful. You've have people on it's it's actually divided houses, it's divided families,

it's divided longtime friends a little bit on this next evolution. Yeah. In many ways, one would say that sh that's actually healthy because whatever the outcome will be will be better. But I know it's painful.

Yeah. Yeah, I might I I know you you're alluding to the rail conversation that's been very active. I think I don't really have a strong opinion about the rail part. I think the the easiest win that we could figure out tomorrow is just create a separate lane for all the wheels that are on it, like the rollerblades, the bikes, all that. Like you go up to New York, it's like, oh, they've very clearly like these are designated areas for the 20 mile an hour folks

versus the walking.

Well, it's like Yogi Barra, right? It's so crowded, no one goes there anymore.

Like I, you know, I don't think we The belt line on Saturday is crazy. I mean it's just it's amazing. So that's right.

Wait a minute. Okay, it's better than we thought. Yeah. And you can you can be on the east side chill, and you can clearly see if you're heading north, they're on the left. That's where the train's gonna go. That's where the the extra right-of-way is. So there's room, to your point. That's a pretty cost-effective way to increase usability. Yeah. This is what I would tell you about uh transit.

And I'm gonna use a different word than transit. I'm gonna use mobility. So greater mobility via the Atlanta belt line makes way more sense. It like it's what the original idea was via transit, right? Because that was our idea back then. There was no such thing as autonomous vehicles, no such thing as all these other things back then. Um is it expensive? Absolutely. The idea that it would be

disruptive, I think, is a uh a paper tiger because to everyone who's on one side of it, it's like that's always been the promise. So like don't say, like, hey, it's great, like we don't need it. There is a mobility challenge population that um could benefit by greater mobility through the Atlanta belt lines kind of connectivity that I think should absolutely still be a priority.

How you do it from an engineering standpoint, right? That I think is what the good debate is going on right now. The reason why transit from a development standpoint has been something we've been so passionate about as developers, because once you put a rail on the ground, you're not moving it. Right. So I know that that infrastructure is there and that then I can, with some certainty, invest my own

dollars next to that. Like developers want to invest a dollar where someone else has done 10. So that transit goes in. It's like the interstate. Interstate goes in, then I know what corner I need to be on. But if it's just rubber tired and it can move, I'm not that interested. The belt line alignment's there. The trail is there, right? So this idea, think of what's out there right now, that's that's trail-oriented development, not transit-oriented development, even though it's all transit supportive.

But Jim Erwin built fourth ward, right? He built 725, all the stuff that's going on there is happening not because of the promise of transit, it's because of the promise of place that's been created.

So we call it beachfront property. Well, there is it's waterfront, right?

It's why it's so in Atlanta didn't have it before. Atlanta's waterfront before was 21 lanes and a river of concrete called the connector, which in many ways serves as a downtown disconnector. But that is beachfront, to your point. And hopefully I've threaded the needle on in terms of I would I love to see translator? Absolutely. I would love to see it. It would make the streetcar that much more viable if it had something to connect to. And right.

Does it have to happen for greater mobility to serve either transit dependent or I probably not. So what's the right answer?

Well done. I gotta ask a kind of French question about the highway. Please. And I feel like it just this will be the last thing we talk about in Lake Station. We can get into more modern highwoods. This section of the highway drives me nuts. Yes. Most people don't realize it's here. Yeah. Um if you're online. So there's this I guess it's like four lanes that they just kind of put up barriers and whenever they re-lined

things. Wasn't wasn't there supposed to be a bridge that was going to connect that station. You've done the 17th century.

You've done your you've done your homework. Okay. So I talked about the downtown disconnector. This screenshot here is a great example of that.

I mean, like if you're on 17th Street looking over, it's like, oh, there's a lot of things.

And that's deliberate. So to G Dot's credit, when we built the 17th Street Bridge, we also had to design the 15th Street Bridge. I mean, it was a little, I mean, so again, another challenge to us getting this thing done. So the idea of the 15th Street Bridge would be an HOV only.

Okay.

So it would provide, so that's why that middle lane is there. So you could conceivably come off that HOV lane with a left exit and come right into Midtown at 15th Street and turn into Midtown to the east. And could there be a future connection development to the west? Because that's not highest and best use there between kind of the off-ramp and the first street there.

The U-Haul and the epic.

Not not really, right?

We got a Carvana tower now.

Hey, I mean, then you've you've arrived, right? So so that actually makes tons of sense. And you imagine what's happened at 15th over. In the harbor.

Yeah, they did that kind of quarry. They like blow up some rocks and they push it through. So, okay, is that like scrap forever or just that took you know it's a great question.

Okay. I have no idea. But it's on the plan, it's on the plan and it works. Yeah. So it's engineered. We took it through a certain level. Um, you know, it'd be interesting. You know, and I'm not being critical when I say this, I feel like so much of the enthusiasm energy from a connector midtown standpoint is this concept of the stitch, much farther south, which is really not about

um connections from that that main line of interstate traffic, that major artery, it's really kind of a cross and kind of placemaking. I would argue that it should absolutely be on someone's list and a priority because it will continue because think about the HOV lane, right? Not only are you running potential carpools in there, it's regional bus, it's other forms of higher density mobility

could come right out of that center lane and connect into Midtown, it continues to provide more connectivity for Midtown.

Yeah. That makes sense.

Um Great question though. Yeah, thanks. No one has ever asked me that question.

Really? Okay. All right.

I mean, that's also ancient history a little bit, but I love that someone noticed it.

Yeah, yeah. I it's it I once you see it. Sumbbelt developers is brought to you by Northspire, built by a developer for developers. Visit Northspire.com. Again, that's Northspire.com. Now back to the show.

I mean, I was greatly involved in, you know, the mid midtown and all of Atlanta, Atlanta Regional Commission. So anywhere you want to go with this, it's uh you know, Atlantic Station is evolutionary. Sure. You know, and so I think, you know, even think about it's not it's uh probably only a third built. Right? So if you think about the master plan, I mean, it probably won't ever be fully built because decisions have been made for

density to be less than what was on our master plan. So you think about where Microsoft is, which is an amazing project, but we had they gotta pull their people people back in that building.

I I've heard there's like ten people that work out of that building.

Yes, I hate to hear that.

Um okay, the pinnacle site here that obviously the the tennis tournament was going there.

Um Cirque du Soleil shows up you know every now and again. That was a deal. Um I did talk about a covered land play. It's like, how do we get energy and activity to this becomes a place that people are used to going to?

Sure.

And so we negotiated, it's a very long-term deal with Cirque du Soleil.

Um like 30 years or something.

Yeah, they they there's some outs in there, but yeah, it was 20 years, so they've been out there 20 years now. And um we end up you know kind of consummating the deal in Montreal, and it's wild. So like we ended up uh kind of the after party, whenever they launch a new tour, they launch it in Montreal. That's where they're based. So the guy who founded uh Guy Libert, um, founded Search of Soleil, he was like a knife swallower and flame

eater like on the street and like the rest is history.

Did you get to meet him?

Um he was sort of sitting in the corner, like Lotus style, like with you know, like it was it was kind of wild. But the party, after party was like, you know, eyes white, eyes wide shut meets like the Smurfs or something. It was kind of wild. Like there were like, you know, little horses walking around and people on stilts and matches. It was wild. Yeah, but anyway, so so that's yeah, the pinnacle site, the tennis tournament, search of

a but that's like that you could put a couple nine square feet on that.

Oh, I mean, it's it's a huge site that's again right are right under everybody's nose. So the the rail sphere, this was gonna be what that train, the Amtrak, exactly. So okay.

Yeah, yeah.

So what y'all just cut the lines and said there's a bridge there and basically Yeah, exactly.

Yeah, no, I mean it was like okay, that's that's not happening. You could actually you can imagine how it continued right through between Randall Brothers property and everything. Right? Okay. So you could kind of see that and um Wow but so that connection, right, still there. It does still lead to the possibility of a connection to Peachtree. And yeah, I mean, imagine

just if the Amtrak station alone moved.

Yeah, yeah. I just I mean, uh like we we lived right around the corner here.

She did, yeah.

Amtrak is you just see people show up and they'd be walking up and down Peachtree just like with their bags, and you're like, Well, and and considering Atlanta's history, yeah, that is the sad part of that, right?

Founded as Terminus, Georgia, founded as a rail hub, almost unmasked, particularly in the southeast. What what we have and this is it right now. And you're seeing other cities. Charlotte's a good example, um, Raleigh's a great example, building a new there, it's Union Station and like So what happened. Amtrak's just like, no, we're not moving it, or like I don't think it I mean, I think Amtrak would be all you know uh supportive of a kind

of a new location, but I just don't think there's a ton of conviction um from others to create that place, to create that that development. So if you think about it now, right, you can move it, but you really need to redevelop this site next to Target. And that was Randall Brothers lumber.

Is that still isn't that still active?

I I'm guessing it might be still active. I mean, it what what day is your aerial here? This is 2023, July 18th, 2023. So I don't know.

Um I think it's still active. I just let's let's uh that's that's literally this month, October 2026. Not the same.

There it is. But so look, is that highest and best use? Not, right? It needs to be cleaned up because they've but like that activity has to cross the main line here of Norfolk Southern. And by the way, like zoom, there's trains literally in that picture. Is that are those boxcars? Yeah. So that is one of the busiest corridors in all of Atlantic. It's 35 trains a day that used to go through. I don't know how many go through there today, but I knew that fact when I was working

on it. So that that really wants to be redeveloped and be part of Atlantic Station. Yeah, but I'm sure Atlantic Station is like, hey, wait a minute, like we're not gonna let something just you know draft off of us. But imagine if that was a cool train station and you could be connected. Um, there's an idea that makes sense to me.

I call Atlantic State.

Well, you know, it's interesting. In North Carolina, we um are leaning in and upgrading the rail connectivity between uh Richmond, which gets us to DC, and our line, which is actually owned and operated by the state of North Carolina. Amtrak runs it to Raleigh to then Charlotte. So we're gonna upgrade the speed of the trains and the crossings and all that stuff. So we'll take an hour out of the transit time between like

the Raleigh area and Richmond. And so the idea of high-speed rail, which you've you it's out there, people have talked about it, connecting Atlanta to Charlotte, and you know, this idea of Savannah or Savannah, right? Charlantingham, you know, connect to Birmingham. If there was a high-speed rail to Savannah, I think a ton of people from Atlanta would take it.

Yeah.

Right? I mean, Christine was on here, he he had his whole campaign pitch about it. I was like, you're I'm I'm pretty compelled to get your selling with the yeah. Yeah.

Imagine if you I mean, we talked about connecting just even Atlanta, like to Emory out to Georgia, right? Call it the brain train. Run that, like, and just imagine imagine if you could live in a village, say in Athens, and I could be in Atlanta in 40 minutes. Like, I don't know, that sounds pretty good. It's pretty good. I can't imagine as a yellow jacket living in Athens, but it's

a pretty special place.

Maybe drop me a little more in the middle of things than this spot. Okay. Um I keep saying this is the last question, but there's just now that we have the map up, there's just, you know, getting ideas. This bridge right here, I've heard there's this kind of pointing fingers, like the city's like, that's not our bridge. And then Atlantic Station's like, that's not our bridge either. So there's been kind of this fight over who's taking care of the landscaping

on this. Oh my gosh. Maybe that's I don't know if that was. So it's interesting. Um For those listening, this is the 17th Street. 17th Street Bridge. That uh I guess this this takes you straight over to the West Side.

Yeah, it connects to Northside Drive and Howl Mill, right? It creates quite the rung of the ladder here for crosstown connectivity. So Atlantic Station in the core of it, like a couple couple things. Um a lot of people don't realize when you come across the connector on the 17th Street Bridge, it's 135 feet wide. So it's got lanes for cars. It has that dedicated transit lane

on it. It is also constructed to carry rail. So we have an alignment where rail could come out of the Midtown Art Center station and come across. Same debate on the belt line. Do you need rail to do that? Could you just do um a bus, but I would argue like unfortunately, buses have a bad rap, right? Um, a bus rider means like you have to ride the bus. But there are other forms of transit that

actually use a rubber tire that people are very excited about. A lot of people don't realize half the Paris Metro is a rubber tired train, right? If if that bus it was going across was a double decker London bus, so much cooler. Where I'm going with all of that is that when you come across that bridge on the 17th Street Bridge, you're on concrete, you're up in the air. Typically, bridges are concrete because that's what holds the bridge up. And

so the driving surface is concrete. But people don't feel like they're in a village or a shopping district if everything's concrete, the streets are concrete. So you come over that bridge, you end up on an asphalt street. You're still 40 some feet in the air. A lot of people don't realize that. So we had to work hard to figure out how do we create that? So all of this core of Atlantic Station, which was known as the district, the high density

part of Atlantic Station, is in many cases 40-some feet in the air, other cases 28 feet.

When you look inside this, there's like that one pad site, you're like, whoa.

I am exactly and so again, we borrowed um some things from other cities. So all running underneath 17th Street is something we call you know lower 17th Street, and or the utilador. So there's a corridor that runs all the way underneath 17th Street, which is a service corridor that serves all of those high rises. Wow.

So that way it's like a big hallway kind of cavity.

We borrowed that from Lower Michigan in in Chicago. So I didn't think about that.

Because yeah, there's there's all the parking down there, but it just kind of stops at some point and huh.

Right. So and we also so there's three levels of parking, south of 17th Street, two north of 17th Street. It's a function of rock, it's a function of the like so when we were out there with Atlantic Station on site, now I was allowed on site because we were in a contract to buy it. We're decon deconstructing the site, and we're standing on the grade, and we knew where the bridge had to be. The bridge had to be a certain height to clear traffic underneath it, oh, and the structure to hold it up. I remember standing on the

site, looking up in the air, going, the bridge will come in up there. How do we do this? Well, so you asked me a simple question on landscape, you know, maintenance on the other end of 17th Street. So all the way through Atlantic Station, there is a whole organization that is maintaining all the landscaping and the parks, and we have a dog park out there. Atlantic Station runs its own transit. It it runs its

own transit connection that goes over to the Art Center Station. When I was last connected to it, we carried over a million people a year. I can only imagine how many people are coming. So you if you think about transit ridership and and uh transit um systems in the state of Georgia, this might be one of the tops in terms of the number they carry.

Yeah.

When the 17th street like road leaves Atlantic Station down near IKEA and rises up over the rail line to connect to Northside, like uh after the, you know, our the property line right there, like a little like south of that bridge, that's not that's gotta be someone else is taking care of part of that. Yeah.

But are you saying like where this is? Yeah, exactly.

Yeah, something like that. You can imagine, right? There's yeah, and I don't think there's much on there anyway. And by the way, we're talking about pennies for either side of the coin. Right. So hopefully someone could figure that one out.

Okay. Yeah, that's this is somebody somebody can figure that out. There's bigger problems to solve. Um can we talk about so what do y'all have going on at Highwood? Are you all building anything? You got like okay, tell tell me about it.

So um, all right, like what's my day job today? Highwoods properties, right? Trade on the New York Stock Exchange, HIW, is the stock symbol. Always a good time to be buying Highwoods stock. Um we are uh primarily Sunbelt. 95% of the NOI is based in that Sunbelt, as I mentioned earlier. So we um we're looking at, we're constantly, just like folks in our business,

um, looking at the risk-adjusted return. So at the end of the day, we're allocators of capital. So if you're an investor with us, you own one of our shares, uh you've made a decision to invest in real estate, not directly, but through hybrids. By the way, most real estate, right, from a direct real estate investment standpoint, it's not liquid. So you own a building, you own a share of a building, you want it out, good luck. It'll take a little while to happen. We're inherently liquid. You come

in and out every single day, multiple times a day if you want. Prefer you stay in as long as you like. So you've made the decision, you've given us your money, you like the idea of real estate, you like the idea of sunbelt, like or you like the idea of office, then you like the idea of sunbelt. So our goal is to put that to work to generate that return. There are certain markets right now where there is growth, where they're in rents, where there

is a risk-adjusted green light to underwrite development. That's Dallas, that's Charlotte, and that I would say that's Nashville. In some cases, we're doing it elsewhere, primarily on a build-a-suit standpoint. So, what we've also seen is that convicted companies and leadership want their people together. When they look at what they spend every year as an organization, let's take the GA

expenses, it's typical expenses, which is general administrative expenses. Most organizations spend 1% every year on utilities, 9% every year on real estate, 90% on people. So you can grind down your 9% for the lowest common denominator for the cheapest deal you can get. And if you impact your 90%, you're cutting off your nose in spite of your face. If you lean into your 90% and have exceptional

workplace experience through your office space, that's proven there's some good data out there that shows you can increase productivity from your team by about 10% or even more. I mean, math's not great, but if you're 9%, it's increasing productivity of your 90% by 10%, your real estate's free. So we're seeing organizations saying, hey, when we do the math, this concept

of a build-to-suit, hey, we will lean in, we want to kick off development and partnership with you is starting to underwrite. So we just finished uh developments in Dallas, uh, went really well.

This is Uptown? Uptown, right?

Development there code 23 Springs. Uptown, we've seen rent growth there.

That's nuts. Our Dallas guys tell me about it. While you're while you're telling, I'm I'm gonna pull up. I just want to you know give it a look and show everybody. What what's the address again?

Um see if you can type in uh 23 Springs, Uptown Dallas. Yeah, see if that just shows up. There it is.

Nice, beautiful glass box. Very nice. Yeah. Who's who's in here?

Uh well, we've got um Bank of the Ozarks, we have Deloitte, we have a number of private equity um folks. We have law firms that are in there. And I really have to give a shout out to our partner, Granite Properties. Um before I joined Highwoods, I was with a company called Crescent Communities out of uh Charlotte, but prolific in the Southeast, um multifamily, office, industrial.

And we had tried to get our business going on the commercial side in Texas, Dallas, Austin, primarily. And what the interesting thing about Texas, while we feel really good about ourselves in Atlanta, Dallas is another level of everything. Just fill in the blank. And if you show up from out of town in Dallas, particularly kind of in office development, again, multifamily is spec development.

So you need the right site, you build it, individuals make decisions to rent there. Office corporations make decisions, and there's sites that are held up. Yes, you could buy a site, but kicking off anything with preleasing is another story. So if you show up out of town in a place like Dallas or Texas, they're super friendly. Welcome y'all, and they will uh go to lunch with

you and and tell you about Dallas. And then you say, Well, hey, I'd love to do a deal here. And they said, Well, fantastic. We're closed today. You're like, oh, oh, okay, got it, super friendly. Like, how about tomorrow? And they turn the town over like, oh close tomorrow. How about the following week? Oh, wait, let me check. No, not obvious. So it as big of a place as it is for office development, it's really not open. So we felt like

it was super important to have a great partner, a local sharpshooter. And there we partnered with Granite Properties, who has a presence in Atlanta. So we had known them. So through Granite, they had this site. They were looking at capitalizing it. They had also one in Plano for a place called Granite Park. We were able to come become their partner, develop it. This building has filled up. Um rents probably. What was the last net

number you saw there? It had a nine handle on it.

Wow. Wow. Wow. Net. Last summer it was like high sevens? Yes.

We one might argue we underwrote in the 50s. So and it's that's triple net. And expenses are high in Dallas because of taxes. 22? You're getting you're yes. So you're you have a three three-digit all in. And these are folks who are saying that's still only nine percent of our expenses because our 90% want to be here and we're we're creating great value. So um Dallas has been super impressive. So when we talk about, when we

we really focus on, I'm gonna get a little bit in the weeds, net effective rents. For us, net effective rents are the the output of a calculation that accounts for the cost of doing a deal.

Sure. Yeah, you commissioned CI, baby, and all that. All that stuff, right?

Sure. And so when we look at net effective rents in Atlanta, so think about the rents with a nine handle on it in uptown Dallas, and think about midtown Atlanta. Steel, concrete, glass, drywall, all that costs the same in both places. Like it's a super compelling value proposition in places like Dallas. Charlotte is close behind, you know, in terms of rent growth because there's no supply,

right? It is super difficult to build anything new. So we're not seeing any new supply being added. We're seeing the denominator get smaller by things being taken out. Up to Uptown Charlotte, exceptional market, they're taking two million square feet out of the denominator. These are high rises. One's converting to a W hotel, uh, one's getting turned into condos and retail. So um anyway, Dallas

has been a wonderful partnership for us with Granite and the team there. They're a like-minded culture-driven organization. Charlotte, we've grown our business there too.

What what do you have in Charlotte?

So, Charlotte, um, those that uh are longtime Atlantons, you drive up to Charlotte and spend some time there, you're gonna feel like you went back in time. Um, and it's uh it's it's a small place, um, but a very big um economic engine. And um they're open for business. So a difference between uh Georgia and North Carolina,

the cities in North Carolina are professionally run. That's not a knock on Atlanta. That means that they have professional people, like city managers run the cities there. And it's a weak mayor system, council drives a lot of the decisions, city manager runs it. Whereas here in Georgia, it's a strong mayor system. So when you have strong chief executives, right, great things happen

too, because it's sort of a one-stop shop. So anyway, Charlotte's open for business. Um, there are more uh financial services jobs there than almost anywhere in the country. That's the second largest uh center of deposits outside of New York. Um, they've expanded their hub airport. I mean, so Charlotte's really got a dynamism going on. Um that's exciting. It's compact, right? It's really got like Uptown as their main

best business district. Immediately adjacent to that is called the South End. Uh so imagine uh imagine the East Side Trail. Now imagine it immediately much closer to Midtown. Imagine it uh almost where Georgia Tech is, flip that over, right? It's right there. Now imagine light rail line running right through the middle of it. Now imagine 10,000 new residents is living there. So it it's um and then the the rail line

connecting at the other end to the heart of UNC Charlotte, which is now just Co University of Charlotte. So um Charlotte's been a great place. We lived there for five years. Um, and what's happened is a lot of folks have relocated out of New York, Boston, and Chicago, primarily coming out of the pandemic.

Sure.

So if you're a trader, you're private equity, your portfolio manager moving from New York to Charlotte, your salary didn't change. They don't knock your salary. So if you think about your take-home pay, probably quadruple them anyways. Oh, and by the way, what's your time worth? So now you literally commute from, say, Myers Park or Eastover to uptown Charlotte, but you oops, you left the iron on,

you just go home and you turn it off, you come back. Right. You do that in Manhattan, commuting from Westchester, commuting from the Gold Coast on Long Island, commuting from you know, Bergen County, New Jersey, forget it. So Charlotte has got a lot of great things going on. A chip on their shoulder about Atlanta. When I got there and got very involved, they're like, oh, we're so glad you're from Atlanta. We don't want to be Atlanta. And I told them, Don't worry, you won't be. And they were

offended by that. Like you don't want to be Atlanta. I said, you won't be. And I told them at the time, and it's still true. I said, if Atlanta stopped growing, period. So if no one moved to Atlanta and nobody was born in Atlanta, no one died or left Atlanta, right? And Charlotte started growing as fast as Atlanta has, which by the way, Atlanta is growing as still as fast as it ever has, close to 100,000 people, I think,

per year in the total region, about a million people per decade. If Charlotte ramped up its growth to Atlanta standards, which Charlotte's not growing that fast, and Atlanta didn't grow for 39 years, you wouldn't catch Atlanta. The 40th year, you would catch Atlanta. So that's in some ways the good news. So hey Charlotte, why don't you pay super close to what Atlanta

did right and do it sooner? And what you think they did wrong, don't do it. And so Charlotte very much has lived that way. Um so I would I would definitely keep an eye on Charlotte because you know the Honeywell moved their headquarters there, so that's not just financial services. You've got um Scout Motors creating their headquarters there for that. So it's diversifying its um economy,

it's a center of energy with Duke energy headquartered there as well. It's got a very entrepreneurial um owner of the Carolina Panthers. When he bought the Panthers, Dave Tepper was the wealthiest NFL owner in the entire league. So very quickly, then he got MLS. And so just when you have certain dynamics like that, it's great. Nashville is another great market for us, and we're happy to be there.

I hadn't been to Nashville in a while and went there what I think like last we went earlier this year, and then did you recognize it? I mean, it's changed so much.

It's a proper like city, right? I mean, they've got the four seasons there, they've got the Conrad Hotel there, the Ritz is coming, they've got right, the St.

Regis has a side off and all the new stadiums exceptional, right?

Super cool. The stadium's being built. I mean, uh with the and it's still I mean, the city part with a lot of the tourism stuff, yeah, that's like mega, I think as the kids say. But if you live in Green Hills or Brentwood and all that stuff, it's still a super livable, very high-end, high quality of life place. Williamson County, where we are starting a huge development called ovation, a mixed-use development,

sort of a mini-Alttic station, calling the Avalon for Nashville. Um it's exceptional.

Yeah. We're um so I uh there's there's the classic, you know, Dow Charlotte, Raleigh. Are there tertiary markets you all are looking at? Any anything at Greenville or I don't think so. I don't think that makes it maybe it doesn't fit the core mission.

It probably doesn't fit the core mission. And the we really like to have everything under one roof, as we say, with one like Highwood's blue shirt. Um we like to own, we like to operate, we like to lease, we like to develop. And so you you to do that, you need some scale. And I think you need scale just from a deployment of capital standpoint. So those markets are so small, it'd be like really hard to get the scale

to make much sense. I'm not saying two. I don't know. Well that's well that's true. I'm not saying there's not core in those places, absolutely. Yeah. But that's probably not the right. We're trying to get kind of more efficient. Like so places like Dallas make sense, Charlotte. I mean, at the green light will come back on Atlanta, but um, it's it's gonna tighten up here.

I guess to we're we're starting to see some bidding wars and and some of the B plus stuff.

And look at Buckhead. I mean, look at some of the numbers now in Buckhead, yeah, right. Um we we're seeing growth there. Our our friends are seeing that down the street in in in core buckhead. And um, I think the threes are gonna be fours very soon.

Right. I I have my bets on you know the one or two buildings I think will be the first to hit $100 a foot in Atlanta, but um hold my tongue here live. But uh I'll tell you after.

I've I've got a lot when they do hit a hundred and you come back to the calculus, that that organization is paying a hundred, that's only nine percent of their typical expense. Right. Yeah, yeah. It's it's so funny.

When when you know broker, tenor rep brokers, we get in the business and the senior guys are like, oh, you need to call people and tell them this is the second largest line item on their, you know, their PL or whatever. Right. Um but when you see the difference of the first and the second, it's like a joke. It's such a difference. It's like but if you invest in that in that second line item, it really doesn't yeah, we'll we'll get you the best deal, we'll negotiate it, we'll we'll make sure it's market. Right.

Um but it to invest in the right space for your people is just so worth the investment.

Well, and to and to that point, like we as an organization, you asked me a little bit about highways. We're we've been um in the evolutionary state really um in 2019. I had the good fortune when I joined in the summer of 2019 to get out into the field. All of our leaders in the field are are sort of on my team, but I kind of support them. So uh we have a leader in every market. And I happen to be um I don't know if

I should rat out the market and tell you which one it was. It wasn't Atlanta, I'll tell you this. But I'm suburban. It's a suburban office park.

Yeah.

Um, and it's the kind of thing other people have lambast it is commodity and you know, stuff they may not want, untrophy, suburban office park, and it was all surface parked, and there's a whole series of buildings. We probably had about eight buildings. And I am riding in the car, my market leader was driving, and my leasing leader was in the back seat for this market, and I let out an audible

sigh driving through this area at the time. And uh our leasing leader at the time was one of our two most senior leaders in all of the company, and she was um very good at what she does, very proven, years of success, but also super opinionated, generally right, but never unconvicted. And she hits my chair and said, What are you sighing about up there in the front seat? And I said, These buildings

stressed me out. This is summer of 2019. I said, There's there's no place I'd want to grab a cup of coffee. I'm not taking a date to lunch here, and I'm the buddies aren't gathering for happy hour to be here. No one wants to be here. It feels like they have to be here. This is where they collect a paycheck.

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And she said, quit bitching. It's full. And she was not incorrect. And sometimes I can find myself overthinking the consumer, right? I'm like, you know what? Fair enough. Maybe I don't know this submarket, maybe I don't know this market. Yeah, this is what they want.

But you know your own likes. It's full.

It's it's full. And you know, like, okay. A few glasses of wine into dinner, something hit me. I said, What did you tell me in the car? He goes, I don't know. I said a lot of things in the car. I said, When I kind of let out my sigh about where we were, she said, quit complaining. It's full. And I said, You know what? So was the stomach of the T-Rex right before the asteroid hit. Didn't work out so well for him. And

and she said, Huh. Still full. I came back to Raleigh and shared my story. And I said, Team, guys, like it's coming. We have got to evolve. Right? The asteroid's coming. We had a lot of T-Rexes, a lot of dinosaurs roaming our portfolio. We've got to change it into this place. People want to be. And so we started very

quickly leaning in to transforming the portfolio. I'll give you an example. That same submarket, we had like an office building that was built years ago, filled up, and we had a pad next to it that had been had numbers of buildings drawn on it, but like the rents hadn't grown. Like the cost had gone up over the years. Yeah.

So your margin gets less and less.

So I asked my market leader, like, well, what are the market rents? This I asked my development team, what do you need for a yield on this? They were $25 apart. We went and got the sites rezoned for multifamily, sold the office pads out. And that was a big kind of shock. A lot of folks like, oh my God, we're selling office pads. Are we not in the office business anymore? And I'm like, we absolutely are in the office business. We sold the site next to an

office building for multifamily. So now I've got somewhat synergistic uses to further like define the place. Yeah. One, we repatriated cash, we could put that to work. Now I had, you know, some story of mixed use. We did that on a number of sites. And that was transformative. Oh, and then March of 20 came. And we had already started doing this thank goodness, but clearly we

were convicted to like lean in and do more. So we truly believe that the best and brightest are better together. That if we give them an environment and an experience, environment's a building, experience is what you feel when you're there. Call that environment as hardware, experience as software. When you put the hardware and software together, that great things happen. If we allow great things

to happen because of the people in there, people will pay the rent. They're going to succeed in their business, they're going to be growing. Like our success as a publicly traded company will be an outcome. It's not our goal. Our goal is to create compelling workplace experiences that drive occupancy and value. If we do that, we'll return to our shareholders. So we got pretty convicted on

that quickly. So that term that we have for that combination of environment experience is that it has to be commute worthy. Because we were seeing that right in the pandemic. So again, while we can be criticized for having a portfolio that in some cases has all kinds of cats and dogs in it, like some surface park suburban development. By the way, those were the first parking lots that filled up coming out of the pandemic. Commutes were easy.

You weren't riding up an elevator for 20 stories. You know, you came in. So for instance, a million square foot suburban park like in in uh Raleigh, we rezoned it. We added retail, we converted different things. Now we we build our first brewery. We have the bagel place, the taco place, the Asian place, the grills coming in. And that's fundamentally changed. And by the way,

it's suburban. And people love it. Because by the way, executive housing surrounds it. The commute's four minutes. Now you've got a place. But I firmly believe if you can stimulate talent to start with caffeine, nourish it at noon with lunch, and hydrate it at a happy hour, it'll come to the office because doing all this at home aren't nearly as fun.

No. No. I I think of um have you been to that little ray on Northside?

Super cool.

I mean, that was like overnight success. It was like traditional office park, nothing special. You put in a taco shop and a coffee.

Yeah, but you can't find it. But no what? People do. They do. You don't try and buy it and see it, right?

Yeah, we we go there Fridays with with some friends, and I mean there's a hundred kids running around there. But during the day, I mean it's just as full for for lunch.

Um we had uh, you know, over like a half a million square feet in suburban Nashville, three buildings, one building that was we knew was going to be go from 100% to zero percent least. And in the middle of these three buildings was sort of like a forest that, you know, sort of there, there it is, there's the green space. And we got ahead of that, completely changed that, created a park in the middle, ban shell

for performances, put in a sport court, pickleball court, basketball court, and a playground. And I remember the team at the time like, why are we putting a playground in? We don't have any kids in our buildings. I said, you know what? What I hope we have are parents in our buildings. The funny thing about parents, usually one of them works. And so we put this playground, and it was like the team was like, traditional property management is not that far removed from facilities

management, right? Yeah. So we are trying to evolve as an organization. We put that playground in, we then land a 15,000 square foot early education higher end kind of daycare, not called a daycare, but early education uh operator. We have those two, that's energy. We then land a headquarter relocation from another city because they're people. Think about coming back from the pandemic. Yeah. I'm gonna go on a limb. Maybe

half of the workforce might be female. Females carry a higher burden of return to the workforce when they have newborns. Now we had uh uh infrastructure to support talent throughout their day, throughout their week, throughout their lives. Headquarters moves here, headquarters now expands. Oh, by the way, we also then opened a coffee shop, crushing it.

Yeah.

And that is suburban. And while we don't think like take a suburban office park and just roll out a pickleball court and that's gonna solve our ills, but we created a place people want to be. It's now called Park Place. And we're dealing with folks that want to be there on the weekends and show me a place where people invest their heart, and then they're gonna want to work there.

Yeah. I haven't heard that one. Throw a playground to end and at least up a almost a million square feet. Is that exactly?

I mean, it's it's a little more nuanced than that. But yes, yeah. It's not just add water, but it's it's it's how do you how do you create a place?

Yeah, very cool. Um well, Brian, this this has been amazing. Uh anything else that we should know about Highwoods or anything else you wanted to say.

No, I think I think um we're very optimistic about the future, even particularly with the the onslaught of the AI uncertainty of what that means for the workplace. I think for five years leading up to this past spring, I'd kind of been beating a drum wherever I could that I foresaw um an AI-induced white-collar rust belt spreading across the country, east, west, north,

and south. I think that's still going to happen because I do think of the power of AI is going to change absolutely the workplace. But I've also come to the conclusion that I don't think we're going to outsource being human to an algorithm or a large language model. I don't think the boss is going to outsource themselves to that either. So I actually think the power of human

creativity connection is actually going to be more valuable than it was before. So I'm quite convicted that as long as we are creating places people really want to be, we're going to be in really good shape. And that's what we're seeing. So talk about the rent growth. We're creating places that are supporting talent. Like we, we are running room service up into buildings. We're doing um uh

puzzle marathon, we're doing all kinds of stuff to be basically like, you know, the hospitality director of a resort. Yeah. Um and it's different scales of different places because not everyone wants to, not everyone can as an organization afford 90 bucks triple net rents.

No.

Right?

No.

But at different scales, people can do different things. So I am more convicted than ever that as we continue on our simple strategy and we're we're active in that and we're we're selling those things and reinvesting and growing and and the green light is starting to flash on where development starts to underwrite uh right now. I couldn't be more bullish about the future. And I love the magic that can happen

in the places that we create. When magic happens, they can afford to pay the rent. And that's the short story. That's good.

I don't know. I'm this is your your playground thing. I also I heard the other day that Chick-fil-A is putting their playgrounds back in the stores. Awesome.

Why not dog parks? I mean, all this stuff like I mean, look it before work used to be a place you had to go to collect a paycheck.

Yeah.

Today it's a place that has to attract talent. The the war for talent's over, talent won. We're just we just don't have enough and we aren't going to we're not birthing enough people or the immigration isn't enough. So the the talent like so when when your kind of occupancy with uh with us becomes competitive currency to attract, retain, and recruit talent.

Like we get really philosophical here. Like where where do you think this is going 10 or 15 years? Like the talent, the demand and the need for it. And I mean, we just need to have a kind of like an industrial revolution on There's gonna be a billion less square feet of office space in this country, I think.

Like of what's there today. There'll be stuff added. Yeah. And I think it will be integrated, it'll be neighborhood driven, it'll be a mix of uses, it'll be places where you high-fi you're the person sitting next to you because you created something, you solved something. I mean, like I think the idea of anything that is a process that can be distilled in a series of steps will will be

moved over to automation 100%. And by the way, when we prove you could work from home, those jobs and processes that are can be fully done from home can be done from anywhere. They can be done from anywhere, they can be done from nowhere. It's already happening. So I think, yes, 10 to 15 years, I I think I think office is a fantastic place

to be because of the the magic, the value that can be created. If you got you can always cut this out, but if you think about where magic's created with regard to real estate, yeah. I want you to imagine a simple XY graph. On the X-axis, I want you to think about land use types, different types of commercial real estate. On the Y, we're gonna plot magic. Okay? At zero, zero,

let's just, no offense to the guys out there that do this, we're gonna plot industrial outdoor storage, iOS, right? It's a gravel lot with a fence around it, right? Got who knew it was a thing?

By the way, just got an iOS deal signed yesterday.

Yeah, well done. And probably at a cap rate lower than uh any office deal, right? Right, which makes no sense. But whatever. I'm okay with that. I accept my fate. And that that is a cover, it's a cover land plane. But the the amount of magic that can be created by its either location, its design, the the real estate development, to me is very minimal. Right? It's where you park your extra

boat, your RV, or your trailers, or what have you. You could next go to industrial. What's the magic there? Well, I don't know. Is a magic it's an Amazon Fulfillment Center that it's delivering hot, you know, Christmas gifts or Hanukkah gifts, and may I I don't know, maybe you could stretch that. Okay. Then you have other uses like multifamily and hotel retail. I'm gonna put life science on the far right.

Right? So imagine the magic chart for me is actually a 45-degree curve. So life science on the front. Think about life science. During the pandemic, life science-related spaces came up with an mRNA vaccine through an algorithm, you know, working through the night. They basically used data science as much as bioscience to come up

with a solution to a global pandemic. When the people who did that left and kissed their loved ones goodbye, where do they go? They were going to the office. They were going to work. That's life science. So I would put office right next to that because you think about the stuff right now. Funny enough, all the AI firms that are blowing up and growing and everything right now, they have a five day a week in the office, in some

cases six days a week in the office requirement. Yeah. So magic that's happening in the office, you think about the value that's being associated with their ability to be together, it's it's not happening right now. We're undervalued as a sector. Um, I'm super bullish about what that means for the future. I love where we're at. I love our balance sheet. I love our evolving portfolio.

Above all, I love our team. We we believe there's a different value proposition when an organization operates the building, manages, you know, leases the building. There's a greater connectivity to our customers and our consumers. Customers are people we have a legal agreement with, us to provide and they to pay. It's called a lease. But our consumers are individuals that choose to walk through the door every day. So that's

who we're focused on, making sure they keep coming in.

Very cool. Brian, thanks for coming out. This is this was a treat. Yeah. Um, well, y'all, uh, thank you for tuning in to another episode of Sunbelt Developers. Uh a couple little housekeeping things. Um, you've probably noticed I'm not a professional ad reader. We're working on our ads. Um, but if you could, please check out Northspire. Uh, they've become a great partner of ours. Um, I got a demo of the software that they

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this in any other way uh beyond just listening, uh please email me. My my email contact information, even my cell phone is in the description of these episodes. And I would just love your feedback. If there's things that we could do above and beyond what we already are doing, um love to hear from you. So at that, uh thanks for tuning in and um we have more to come. Thank you.