Former TSYS call center to become small offices as Atlanta suburbs evolve

In 2014, Total System Services (TSYS) announced plans to open a call center in Henry County to support its existing operations in its Columbus headquarters.
“I have no doubt that our state will continue to provide this growing company with the necessary resources to remain globally competitive,” said former Georgia Gov. Nathan Deal in a news release at the time.
A few years later, TSYS merged with Global Payments (NYSE: GPN). Then, the Covid-19 pandemic closed the call center in March 2020. Employees never made a full comeback. After less than a decade, the company ended its lease at a 62,000-square-foot office in McDonough, a suburb 30 miles to the south of downtown Atlanta

The property owner tried to restore the vacant space as a call center, but no one would bite. Now, Denali Investment Group is chopping the unused building into small offices to accommodate upwards of 10 businesses.


Converting the call center

Atlanta-based Denali purchased the Loop Road property from LXP Industrial Trust for about $3.4 million. Known for buying and upgrading small warehouses and flex office space, Denali plans to invest about $3 million into renovating the former call center. The space will be marketed toward small, regional businesses — such as medical providers, plumbers or roofers — in need of close proximity to their customers, said Denali Managing Director Jason Chaliff.

As of the middle of this year, the southern half of metro Atlanta had a vacancy rate for flex office space below 3%, according to commercial real estate services firm Colliers International. Given rising construction costs and land prices, the market rarely sees new buildings constructed for these types of users. Average asking rents in suburban areas are often too low to justify construction costs for new offices.

“We couldn’t build this,” Chaliff said. “If somebody gave us a great piece of land and said, ‘Build us a great building that could house 15 businesses,’ we wouldn’t do it because the costs are so high.”


Demand from small businesses

Strong population growth is one of the key contributors to demand for this type of space. Henry County is now home to more than 240,000 residents, an increase of 18% from 2010 to 2020, according to U.S. Census data.
From an investor’s perspective, a diverse mix of tenants can help weather economic uncertainty, as it’s unlikely for all businesses to fall out of favor in the event of a downturn.
Redevelopment specialists are eyeing outdated suburban properties — whether they be office parks, shopping malls or retail centers — to modernize with new uses. Consider plans by Toro Development Co. to transform the former State Farm campus in Johns Creek into a mixed-use hub with apartments, townhomes, restaurants and shops.


Corporations shed space

The rise of remote work allowed some companies to shed excess office space, while others moved to job centers with robust amenity offerings as a way to attract and retain talent in a fierce labor environment.
A spokesperson for Global Payments did not immediately respond to a request for comment on the closing of its McDonough location. The company has decreased its real estate footprint since the pandemic.
Two years after the 2019 merger with TSYS, Global Payments consolidated its offices in the northern Atlanta suburbs and planned to test a “hoteling” model for employees to support hybrid work. Less than a year after that move, the company sublet half of the 200,000-square-foot office. Global Payments still has headquarters in Columbus and Buckhead.


Attracting companies in Henry County

The property purchased by Denali is only a little over 1 mile away from South Point Shopping Center, a retail hub with national retailers and restaurants. This could help the firm attract small companies looking for space in the Henry County area, Chaliff said. “This is where you want to be in southeast Atlanta if you live anywhere within 30 minutes of it,” Chaliff said. “We haven’t seen much development down there for offices or flex facilities, where the companies that serve businesses and consumers in the area set up shop.”

Tyler Wilkins
Atlanta Business Chronicle

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