A down economy won’t get The Alter Group down. Throughout its 46 years of operation, and the typical highs and lows of real estate, the Chicago-based development firm has kept its focus on one general client: Corporate America. In fact, most brokerage firms would probably categorize The Alter Group as an office or industrial player, says Richard Gatto, executive vice president.

“We haven’t ventured into retail, residential or hotel,” he says. “These last few years, we’ve gone into telecommunications and Internet infrastructure building programs, so we’ve really done a variety of emerging and evolving business use types in terms of the real estate needs of a firm. But we’ve always done corporate real estate.”

Change is afoot with the current state of the economy, however, and The Alter Group has chosen to run with it, focusing on less speculative development and more build-to-suit projects.

The Alter Group has traditionally ventured out to acquire large tracts of land and develop them into traditional suburban-style business parks. To date, the company has developed close to 100 million square feet of commercial real estate in 42 different markets for local, national and multi-national corporate clients, including office, industrial, manufacturing, warehousing, R&D, call center, data center, and government and educational projects.

From speculative development to build-to-suit work to the company’s own ReadiDesign program, The Alter Group has left its mark throughout the Southeast. For the speculative office sector, the company looks for areas with significant potential for job growth with heavy office users.

“Typically that will lead you to metropolitan areas, such as Orlando, Fort Lauderdale and Atlanta,” says Russ Posey, senior vice president of development for the Southeast. “We are continuing to look in other southeastern markets for opportunities, but with the current economy and employment situation, the job growth is certainly not what it has been in the past.”

Though the company has just delivered speculative properties in Orlando and Fort Lauderdale, Florida, the down economy has put the brakes on any further speculative development in the near future.

“We’ve probably shelved five different projects in the last year,” says Todd Yates, senior vice president, national development. “We finished some things we had in the pipeline, but really after September 11, we pulled the plug on anything that was not under construction.”

The company is now focusing on more build-to-suit development, including its proprietary ReadiDesign concept. The intent of this concept is to have pre-designed building options that can quickly be customized to meet tenant and user needs, and allow The Alter Group to get a jump on critical scheduling opportunities. The concept has allowed the company to move clients into a building in as little as 4 months after signing a lease.

The ReadiDesign package includes design/renderings, site plans, floor plans, furniture layouts, preliminary pricing, and construction and performance specifications, yet is customizable to the client’s specific requirements.

“We invested heavily in designing a half a dozen different buildings in the ReadiDesign system, which in my opinion certainly will accommodate 95 percent or better of the users looking for office use,” says Posey. “We have a module for a call center, big floor plates that allow for single-user high-efficiency operations and smaller floor plates that allow for a mix of single-floor tenants and multi-tenants. So we think we’ve covered the gamut of requirements.”

The Alter Group takes a similar approach to build-to-suit and speculative development in terms of speeding up delivery time. By working on different areas of development simultaneously — designing, ordering materials, leasing — and maintaining relationships with a core group of architects and contractors across the country, The Alter Group can move faster than most developers, according to Randy Thomas, executive vice president of development.

“We have relationships in place that are close enough where we can start grading the land before the lease documentation is completed,” he says. “That says a lot about the trust we have with our clients that we can actually begin the project before all of the documentation is in place.”

The Alter Group’s development portfolio includes several projects in the Atlanta area. The company recently developed about 45 acres off Georgia 400 in the North Fulton submarket. Brookside/300 at Brookside Concourse in Alpharetta is a combination of multi-story and single-story office buildings. As part of the overall 45 acres, the company did a build-to-suit for Agilent Technologies that was part of the ReadiDesign program. Agilent is the sole occupant of the 101,000-square-foot, two-story Brookside/300. The firm, which had previously leased 61,000 square feet of space within the building, is using the space at Brookside Parkway as an Atlanta-area sales office.

Probably the most interesting current project, according to Yates, is a second build-to-suit development for Siemens in Orlando. The Alter Group is building a second 225,000-square-foot building for the company, completing a total of 500,000 square feet in an 18-month period. The project is a consolidation of other offices where the company had a lot of inefficiencies with duplicate reception areas, copy rooms, conference rooms and break rooms.

“From the client’s standpoint, they are utilizing less space, saving more money and getting a brand new state-of-the-art building,” notes Yates.

Like the fluctuating economy and overall real estate industry itself, The Alter Group’s buildings have seen many changes over the years, including larger floor plates, higher parking ratios and a preference for single-story office buildings that, today, are much more attractive.

“In the early ‘80s, the single-story office buildings tended to be more industrial and utilitarian looking,” notes Thomas. “Now they are very attractive, nicely landscaped and have some of the internal technical amenities of multi-story, sophisticated office buildings.”

As for the future, The Alter Group is maintaining a wait-and-see attitude about further spec development.
“We’ve got buildings that are ready to go,” says Yates. “But for now, we’re just going to monitor the economy and look for opportunities to do build-to-suits.”

In the meantime, the company will focus on the industrial segment, according to Gatto.

“It’s a reaction to the office markets becoming softer for a longer period of time,” says Gatto. “We achieved a lot of success in office and, as a result, while we’ve always done industrial, our focus shifted a little more to office. So one of the things we’re going to do in the next 1 or 2 years is really try to re-establish the firm on a more national level as an industrial player.”

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