Scotland Wright Associates Nominated for Alvin B. Cates Award

ATLANTA, March 29, 2022 –Scotland Wright Associates (“SWA”) team members, Brian Boyd and Michael Tucker, were named finalists for the Alvin B. Cates Award for their representation of MacDermid Graphic Solutions in their relocation that landed the company’s headquarters at The Works in the Upper Westside of Atlanta, Georgia.

The Alvin B. Cates Award is one of the most prestigious awards of the Atlanta Commercial Board of REALTORS®. Each year, the Award Committee selects three finalists who completed deals that are considered to be outstanding and noteworthy based on creativity, ingenuity and skill. The details of the challenges that were faced and the solutions that were created by the SWA team in partnership with Selig Development are outlined below.

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As with many industries, the pandemic caused a halt in demand for large swaths of office space across Atlanta, especially in the Upper Westside, a submarket still becoming a burgeoning office market. In January 2021, Selig heard MacDermid Graphics Solutions, a premier flexographic and printing solutions company, was in the market for new space, the Selig team was determined to add this tenant to The Works, Selig’s 80- acre adaptive mixed-use development in the heart of Atlanta’s Upper Westside. However, as Selig learned the details of MacDermid’s unique needs, it became clear that without ingenuity, creativity, and determination from all parties, The Works would have no realistic shot at the deal. This deal was highly attractive given its large space requirement (50,000 SF), high credit rating, and the desire by the tenant to quickly occupy the new space.

However, MacDermid was in need of a hybrid space that could accommodate 35,000 square feet of office space and an industrial-like innovation hub to act as The Flexo Xperience Center, an industry-leading concept that would include a 3,000-square-foot, 18-foot-tall printing press, which would need to be swapped out each year. The Scotland Wright Associates (“SWA”) team representing MacDermid knew that The Works was the preferred location for their client, but they also knew it would be difficult to overcome the economic and physical roadblocks that lay ahead. However, through open-minded communication, out-of-the-box thinking, and an overall desire to reach a solution, all parties came together and finalized one of the most creative real estate deals in Atlanta.

Challenge 1 - Access, dock space, and redesign of large multifamily project:

Though the MacDermid lease was a large deal, the company’s requirement for about 30% of the space to be dedicated for industrial use was a challenge at The Works as the 500 Chattahoochee Row space was designed to be 100% office space with no loading dock zones. MacDermid required weekly loading dock access for its 53-foot semi-trucks. The back of the building where Selig could incorporate loading docks was at the time a small private road with surface parking, which would not be able to accommodate these large trucks from either a weight or size perspective. In addition, Selig needed to begin construction on the adjacent 306-unit multifamily project, impeding the private road access to Chattahoochee Avenue. This required the access road to be demolished during the construction of the multifamily project. This construction was slated to last about 18 months past MacDermid’s move-in, which also didn’t work as they had their weekly deliveries as soon as they occupied the space. Finally, we needed to build a retention cistern underneath this existing road, and the ideal timing of this was near the end of the multifamily construction, which didn’t allow the road to be completed sooner.

The president of MacDermid was attracted to the vibe and energy of The Works and knew it was the best place to recruit top talent, but the challenges the physical building presented forced the company to halt negotiations and look elsewhere. Selig asked the MacDermid team if bifurcating the space requirement across two buildings could be an option, but the president wanted all of the business units under one roof, which several competitors’ buildings could accommodate.

Solution: To revive the deal, Selig immediately began reimagining construction plans of both the multifamily project and the 500 Chattahoochee Row office building MacDermid was considering. To ensure the 53-foot trucks could access the building, Selig decided to demolish the small existing driveway and rebuild a significantly larger driveway to accommodate MacDermid’s trucks. To accommodate the width, Selig had to shift the multifamily development to the east to allow for enough space for the larger access road. Also, for the road to get finished in time for MacDermid’s move-in, Selig relocated the placement of the cistern, so we would not have to tear up the new driveway in the future to build the cistern at the end of the multifamily construction. Finally, to incorporate loading docks, Selig designed the new road several feet lower in designated areas so that the docks were the appropriate height to receive the large truck deliveries. These changes led to a signed LOI, and lease negotiations commenced.

Challenge 2 - Ceiling Height, Structural Load, Column Spacing:

The building’s existing ceiling height was approximately 14 feet clear. The large press was anticipated to require a ceiling height of 18 feet clear in a portion of the industrial area of the space. To accommodate this height request, Selig originally agreed to weld steel beams onto the existing 14-foot structural beams for the area housing the press as it was anticipated to be just for a small portion of the overall space (3,000 sf), and the cost to do so was manageable since the overall deal was so large. Throughout the lease negotiation process, the manufacturer of the press provided the Selig team with the exact specifications of the press and the intensive process to move the press in and out of the space, which the MacDermid team planned to do annually as new models were released. With future presses requiring up to 22-foot ceiling heights, Selig’s solution to weld extension beams to the existing beams no longer was an option as the ceiling now needed to be an additional eight feet taller. Presenting more challenges, the path from the loading dock to The Flexo Xperience Center also needed to be 22 feet clear, which was not originally included in the design plans. Finally, the existing column spacing was too narrow for the press. These new discoveries again threatened to kill the deal. MacDermid and their team expressed doubts about the growing complexity of the deal, despite their desire to be at The Works. However, Selig and the SWA team continued their persistent problem-solving.

Solution: After long consultations with multiple structural engineers, the only viable solution was to take an area measuring about 15,000 square feet- demolish the roof and all the columns to rebuild the entire space keeping only the outside walls and the slab. New larger columns were selected to support the roof, which allowed for wider column spacing, and of course, a new roof had to be built. The new column spacing was five feet wider, which was enough room to meet the requirements of the press. During design, it was also determined that there was a substantial amount of weight added, and the structural engineer determined the old outside walls would not support this weight, so we also had to reinforce the outside walls.

Challenge 3 - Slab load:

Throughout the demolition and rebuild of the columns, another structural engineer determined that the density of the 60-year-old concrete within the space may not be sufficient to support the weight of the press. Once the team began coring, the team found inconsistencies in the depth and density of the slab.

Solution: After much deliberation, Selig agreed to re-pour the concrete slab underneath the press and the pathway from the loading dock to the press with a thicker and stronger concrete to meet the weight standards. The entire process resurfaced about 6,000 square feet of this 15,000-square-foot industrial portion of the requirement.

Challenge 4 - Existing HQ:

The final component to closing this deal was ensuring MacDermid could sell their existing HQ building, a 60,000-square-foot building located in the Fulton Industrial District. They owned this building outright, and the proceeds from the sale were required by MacDermid’s Board of Directors to help offset MacDermid’s relocation cost to The Works. After the SWA team marketed the building for months, MacDermid had received several offers, the high offer being a user who wanted to move in quickly. This caused concern for MacDermid as the timing of when the space at The Works would be ready became less certain because of the construction changes and supply chain issues with building materials, especially steel, that was needed to rebuild the 15,000-squarefoot industrial section of the new space.

Solution: Though it is not Selig’s goal to grow its industrial portfolio, in order to alleviate MacDermid’s concern about the timing as well as providing certainty to MacDermid of having the proceeds from the sale, Selig and the SWA team came up with an agreement for Selig to purchase MacDermid’s existing building at fair market value. The acquisition allowed the much-needed flexibility for MacDermid’s relocation and construction timeline. The negotiation around the timing and risk of this additional layer of the transaction was not easy, but all parties navigated the complexity and solved the issue.

Conclusion: Retrofitting this partial industrial use into an active mixed-use community and construction zone was no easy feat, but the reward was substantial. This transaction is a great example of two parties determined to close the deal utilizing strategic, out-of-the-box thinking to move it across the finish line. Signing MacDermid marked the Upper Westside’s largest office deal in 2021, at just over $20M in lease value. MacDermid will open its new 50,000-squarefoot office space and The Flexo Xperience Center showcasing the press in March.

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Chris Ahrenkiel, Executive Vice President at Selig Enterprises, represented The Works. Scotland Wright Associates Managing Partner Michael Tucker and Partner Brian Boyd represented MacDermid.