With urban living booming, new and improved rapid transit has become critical nationwide. In cities such as Atlanta, more residents want to ride trains to the office.
“When you talk about mass transit - here in Atlanta and worldwide - we're really starting to realize the importance that it plays,” says Richard Slaton, CCIM, director of real estate for the Metropolitan Atlanta Rapid Transit Authority. “Not only from a quality of life or an environmental standpoint, but also from a real estate value standpoint.”
Slaton oversees all aspects of the transit agency's real estate functions, such as managing the agency's real estate portfolio; handling land-use issues; and managing compliance with federal, state, local, and MARTA regulations.
Also, Slaton plays a key role in planning and executing transit-oriented development on MARTA-owned properties. “With the strong population growth and clogged traffic, developments with access to public transportation add tremendous value to the real estate, but they also open up different opportunities for development that surrounds mass transit,” he says. “So I think mass transit is becoming an integral part in development models, now and going forward.”
Slaton talks about his experiences with MARTA and TOD in Atlanta, as well as sharing insights with Commercial Investment Real Estate.
CIRE: What role does a transit agency, such as MARTA, play in transit-oriented development?
Slaton: The agency often has excess property or underutilized property that's adjacent to transit facilities. What we're looking to do is re-adapt those assets to higher and better uses. We typically enter into a joint venture agreement with developers, and they'll put a mix of uses on a property.
One example is Lindbergh Center, where our office headquarters are located, and there's also other office space, retail, apartment, and structured parking. This is the first TOD that MARTA undertook, and we looked at this as a model and are implementing this strategy with other transit stations, which have excess or underutilized real estate next to them.
Typically, MARTA owns the land, and we'll enter into long-term ground leases with the developers. They're usually 99-year ground leases where we get a coupon payment and appraisal resets. As a result, we can capture some of the upside in the increase in the property value after it's developed.
CIRE: How did you get into mass transit real estate?
Slaton: I've been in commercial real estate for roughly 20 years. My career started as a commercial real estate lender at Wachovia Bank, and I quickly learned that commercial real estate is all about relationship building. As a lender, I interacted with many local municipalities, especially Fulton County government. So when an opportunity came up, I went to work for Fulton County [as a real estate manager], and was there from 1998 to 2002.
All of the skill sets I use in my current position, I learned at Fulton County. I learned real estate engineering, appraisals, how to value an easement, and how to acquire and dispose of right-of-way. After that, I went to work for a developer as a development manager and built projects from the ground up - a lot of mixed-use residential over retail, shopping centers, and townhouse developments. From 2004 to 2015, I worked for Bank of America, advising high net worth individuals on how to invest in commercial real estate. The MARTA opportunity came up in 2015. The skill set that MARTA sought were the skills I had acquired, so everything that I did prepared me for this role.
CIRE: If a commercial real estate professional is interested in working in mass transit real estate, what would you suggest?
Slaton: Build relationships and get involved with the local municipalities. So much collaboration occurs between the transit authorities, city and county governments, and businesses within each city or county. Experience in areas such as asset management, appraisal, acquisition, relocation, demolition, disposition, right-of-way, and retail and concessions will allow a commercial real estate professional to make the transition and be successful in mass transit real estate.
CIRE: How has the CCIM designation helped you?
Slaton: The designation has equipped me with the skills necessary to make informed investment decisions that pertain to lease negotiations, market analysis, and financial analysis. Since CCIMs are recognized as leading experts in commercial investment real estate, it adds a level of credibility when speaking with various stakeholders in my market about mass transit real estate. Now I'm in the process of becoming a CCIM instructor, which I'm excited about.