Secondary markets host plenty of economic and real estate activity, but much of this progress fails to gain national attention. I’m sometimes puzzled by the bandwagon mentality that brings real estate investment to a select few gateway markets. New York, San Francisco, and Washington, D.C. certainly offer great stability and high demand, but what about yield? What about new opportunities?
Some are beginning to look more closely at secondary markets in their search for yield. Some are beginning to challenge the notion that investment capital should only flow to the so-called “safe harbors.” With some searching and a little creativity, one may find a strong value-add opportunity in a market with higher cap rates or older inventory.
To discover a market’s CRE opportunities, we have to look to its overall economic activity. What industries are growing? Which submarkets offer the best opportunities? Is the market bringing in more professionals, students, tourists?
Atlanta, Georgia is a perfect example. Atlanta is one of the biggest and most prominent cities in the South, yet its real estate market has languished behind others in its recovery from the recession. In fact, a Jones Lang LaSalle report listed Atlanta as one of the “Top 10 Hospitality Markets in which to Sell.” This shows how crucial tourism will become to Atlanta’s growth.
Last fall, I discussed a new attraction coming to Atlanta: the College Football Hall of Fame. Such a unique, nationally known attraction is essential to a market’s ability to attract residents, visitors, and capital.
The challenge, as always, is funding.
Atlanta Hall Management, the nonprofit that is working with the National Football Foundation to develop this attraction, has found a creative solution.
Via email, I discussed the funding challenge with John Stephenson, President and CEO of Atlanta Hall Management. He explained some of the conditions, funding sources, and relationships that have led up to the project’s groundbreaking this year.
(Thus begins the interview portion of the post…)
Llenrock: Since other cities and college towns were competing for this project, what factors helped Atlanta secure the new Hall of Fame?
John Stephenson: In typical Atlanta fashion, many of our local corporate leaders rallied around the effort, working with our public officials to create a very attractive opportunity for the National Football Foundation to relocate the Hall. Key current sponsors such as AT&T, Coca-Cola, Chick-fil-A and Kia already use college football as a marketing platform, so it is a natural business and civic fit for them.
However, our site is what makes this project so attractive to the NFF. The GWCC’s former “Green Lot” is directly across Marietta Street from Centennial Olympic Park, and is a five-minute (or less) walk from thousands of hotel rooms, the Georgia Dome (and future new stadium!), the Georgia Aquarium, and so on.
L: How do you think the Hall of Fame will compliment other Atlanta attractions, such as the Georgia World Congress Center (GWCC)?
JS: The Hall will prove to be yet another “marketing asset” for the GWCC and for the Atlanta Convention and Visitors Bureau. The Hall will be connected to the GWCC and has four unique meeting spaces that can accommodate meetings, social gatherings and banquets from 100 persons to over 2,500. As for the other attractions in the Park district, everyone is in agreement that the rising tide lifts all boats. When the Hall and the National Center for Civil and Human Rights come online in 2014, we will have a very diverse selection of attractions in very close proximity to one another. Our neighbors have extended incredible professional courtesy to us in terms of helping us understand the projected business model, lessons learned, etc., because our success is good for them as well.
L: What was the biggest challenge you and Atlanta Hall Management have faced in executing this project?
JS: The biggest challenge was, during a tough economy, getting the project to a point where our corporate partners had enough confidence in its viability to invest. That took a lot of due diligence and analysis by a lot of people, but the project is on more solid footing because of that forced discipline. We are very proud of our private sector funding, and there are still categories available for sponsorship.