In today’s Four on Friday, we spoke with Chris Faussemagne, 2015 chair of the ULI Atlanta awards dinner and Principal of Westbridge Partners, which focuses on adaptive reuse and infill development. Faussemagne has developed more than $100 million of projects during the past ten years, winning awards from the Atlanta Urban Design Commission, Georgia Trust for Historic Preservation and the Atlanta Regional Commission. He shared with us how he got his start in commercial real estate and his thoughts on how the development cycle has changed in Atlanta during the past year. Many thanks to Faussemagne for his time.
How did you get your start in commercial real estate?
Faussemagne: I was always intrigued in the process of identifying a property, developing a plan and executing it at an entrepreneurial level. After a short stint in the music industry after college (I did get a gold record, but not for my personal performance), I began buying and renovating smaller properties on my own in the mid-to late '90s. About the same time I found myself drawn to projects such as King Plow Arts Center and Southern Dairies, where re-purposing old buildings into new uses created a quality of the space that far surpassed the traditional buildings that were being built at the time.
Through various partnerships, we developed several historic adaptive re-use projects in the late ‘90s through early ‘00s that focused on historic tax credits as the source to capitalize the deals. In 2006, we created the White Provision Development Co. with the sole purpose of developing the White Provision project. We brought in Jamestown as our investment partner and delivered the project in 2009. In 2010, Westbridge Partners was formed by the principals of the WP Dev. Co. to continue to focus on urban infill and adaptive re-use projects.
The biggest change I have seen over the past 15 years is the amount of institutional capital interested in historic and adaptive re-use properties. Whereas historic tax credits were the main source of the capital stack in the early years, institutional investors are now very active in these types of projects.
What new development projects are you working on at Westbridge Partners?
Faussemagne: We have primarily stayed in the West Midtown market and recently finished a couple of retail projects at 691 14th St. and 1071 Howell Mill Road, both located near the intersection of 14th St. and Howell Mill Road. Currently we are focusing on a project called Stockyards located at Brady Avenue and 10th St. also in the West Midtown market. The project will redevelop some of the last of the early 1900s buildings in the area into office and active space. Although we think the urban infill apartment projects are great in densifying areas of the city, we also think our current focus of non-CBD historic loft office space in an amenitized area is an important piece of a growing neighborhood.
How has the development cycle in Atlanta changed over the last year?
Faussemagne: Two things in my opinion: The trend of the “haves" and "have nots" is being seen even more in submarkets, and alternative transportation finally matters.
In areas where there is BeltLine access, top amenities or an urban core, sites are fetching top dollar as rents for both commercial and residential space continue to rise. However, in some of the suburban markets where success is based on interstate access but offer no amenities, public transportation or “story," it is a struggle to keep up. The exception is Avalon, which realized the typical suburban model had run its course and delivered a well-designed project with local food and good tenants. They can provide the city experience to the OTP customer. Expect more people to try and copy that model OTP.
The other item I see is the impact of transportation. MARTA rail stations, which once were surrounded by areas of parking, are finally getting density as a younger population is willing to accept less space in exchange for access to the city. Between a focus on bicycle lanes, public transportation and alternative ride share such as Uber, having a car and the associated expense is becoming less important every year. While the older people are complaining about traffic, the younger demographics are moving more freely with a network of bicycles, public transportation (including BeltLine), ride share (Uber) and walking.
I think there is a connection between the two comments above as market study after-market study continues to show that millennials are getting married later and have little desire for the suburban life where most of them were raised. A coffee shop in a hip in-town area is far more relevant than a power center with restaurant chains on the outparcels. I really can’t blame them on that one. The experience and quality of space matters and if a project has neither it can only be competitive by offering a lower price.
What’s your role with the Urban Land Institute, and what’s coming up that our readers should know about?
Faussemagne: I have been involved with ULI since the mid 2000s, as I view it as a great resource for the development community. One of the largest events for the Atlanta district of ULI is the awards dinner, which highlights the best developments in the region as well as individuals who have made large contributions to the Atlanta skyline or urban core. I am currently the 2015 chair of the awards dinner that will be held on Sept. 10, 2015, at the Fox Theater. The event sold out about a month ago and we will be highlighting some great projects, as well as Jim Borders and A.J. Robinson for their visions that helped define the city.
The importance of ULI to the city is that it not only provides developers and property owners with resources on policy and development issues but is also focused on the education of the future leaders. In seven years, the ULI Center of Leadership program has become as hard to get accepted into as top colleges and its alumni list has turned into a who’s who of the next generation of Atlanta’s development professionals.