Industrial Is in a Class of Its Own Positive Outlook For

www.REBusinessOnline.com March 2021 • Volume 21, Issue 12

POSITIVE OUTLOOK FOR CAROLINAS RETAIL SECTOR With restrictions easing, retailers and owners in the two states are hopeful for a strong rebound. By Julia Sanders

year ago, the overall U.S. retail The Carolinas aren’t quite follow- sector was in a dark period of ing suit just yet, but both states have Auncertainty. With many people recently lessened restrictions. In North stuck at home indefi nitely and strict re- Carolina, Gov. Roy Cooper signed an strictions placed on restaurants and re- executive order to lessen some of the tailers by state and local governments, pandemic restrictions, such as opening brick-and-mortar retail sales declined some indoors and outdoors areas to 100 drastically in some markets. percent capacity, with the restrictions The National Retail Federation (NRF) of face masks and six of feet social dis- reported that retail stores had their big- tancing still in place. Additionally, re- gest hit in March 2020 when the pan- strictions of late-night sale and service demic caused all non-essential retailers of alcohol in bars, restaurants and other to temporarily close their doors. NRF stores were completely lifted. data showed that clothing store sales In South Carolina, Gov. Henry Mc- were down 50.5 percent from the month Master completely lifted restrictions before, furniture store sales were down linked to the alcoholic beverage sales 26.8 percent and sporting goods stores and mass gatherings on March 1 of this decreased 23.3 percent. year. Fast forward to 2021, with the release of three FDA-approved COVID-19 vac- InvenTrust Properties will soon open Popshelf, a newly launched retail concept from Popular with investors cines and the $1.9 trillion relief package Dollar General, at Sycamore Commons (pictured) in Matthews, North Carolina. The COVID-19 pandemic has passed by the U.S. Congress starting changed how retailers approach sales to be distributed, retail professionals time retail sales would surpass $4 tril- tions. and also where investors want to own seem to have a more positive outlook lion in history. Improved sales should Additionally, states such as Texas, retail projects. To many retail owners for the future. The NRF recently fore- motivate investors to acquire more re- Florida and Mississippi have fully and developers, the Carolinas remain casted retail sales to increase to $4.3 tril- tail real estate and push retailers and dropped their pandemic restrictions on lion in 2021, which would be the fi rst restaurants to want to open more loca- retailers and restaurants. see CAROLINAS, page 20 INDUSTRIAL IS IN A CLASS OF ITS OWN Investors are swarming to the safest real estate bet post-pandemic, but are owners willing to sell? By John Nelson he U.S. industrial sector has by says Garcia-Menocal about activity in in consumer patterns last year boosted of commercial real estate, especially ho- most all measures weathered the Miami’s industrial market last spring. online sales to north of 20 percent of tels, offi ce and retail, industrial is seen TCOVID-19 pandemic the best of “Overall industrial demand was accel- total retail sales for the fi rst time in his- as the surest bet and safest haven for all the major real estate categories. Ga- erated by the pandemic and lockdown, tory. investors amid the pandemic. Institu- briel Garcia-Menocal, executive direc- it was an eventuality.” “Because of the global dynamics of tional investors, REITs, private equity tor of NAI Miami, says last year the The ultimate driving force of the sec- e-commerce and how we were living fi rms and high-net-worth individuals collective industrial real estate com- tor continues to be e-commerce, sales our lives, industrial has been the ab- and families have all been competing munity braced itself for a slowdown in of which grew by 32 percent in 2020 solute benefactor of the problems that for industrial properties, albeit at dif- activity and a rise in vacancy, but that ($788 billion) compared to 2019 ($596 the pandemic caused in other asset ferent tiers. never materialized. billion), according to the U.S. Census classes,” says Erik Foster, principal of The level of competition has driven “Renewals began coming in, and Bureau. Government-mandated re- Avison Young’s Chicago offi ce. things were moving incredibly fast,” strictions for stores and a general shift Relative to the other major categories see INDUSTRIAL, page 22 INSIDE THIS ISSUE

Want to receive this magazine at home? Visit www.francemediainc.com/ Market Highlight on publications Birmingham to temporarily change your address today. pages 13-16 Suzanne Hillman grew up renovating homes with her family. Now, she’s President and CEO of Southern Management Companies, a Top 50 multifamily real estate firm with nearly $5 Billion in assets. Her portfolio – including office buildings, hotels, and multifamily – serves over 67,000 residents, most of whom are America’s workforce. From their first property, which is still one of their top-performing assets, to their 76 other properties, Suzanne knows how to take “what is” and turn it into “what could be.”

To learn more about what drives Suzanne, go to WalkerDunlop.com/WhatDrivesSuzanne

WHAT DRIVES YOU

March 2021 • Volume 21, Issue 12 PUBLISHERS’ NOTE VACCINES, LESS RESTRICTIONS GIVE RETAIL PROS IN CAROLINAS NEWFOUND HOPE President Joe Biden’s goal of getting 100 million COVID-19 vaccines admin- FRANCE MEDIA, INC. Southeast Real Estate Business (ISSN istered within the fi rst 100 days of his Jerry France ...... Chairman & CEO/Publisher 1530-6097) is published monthly by presidency was reached by day 58, and Scott France ...... President/Co-Publisher France Publications, Inc., d/b/a France as of this writing there have been an es- Scott Philp ...... Chief Financial Of cer Media, Inc., Piedmont Center Fourteen, Jaime Lackey ...... VP of Marketing & Digital Strategy timated 143 million vaccines doled out, 3535 Piedmont Rd., Suite 950, Atlanta, Randall Shearin ...... SVP, Editorial & Operations according to National Public Radio. GA 30305. Telephone (404) 832-8262, fac- Coupled with the $1.9 trillion stimu- EDITORIAL simile (404) 832-8260. E-mail: southeast@ lus package, the success of the vaccines Matt Valley ...... Editorial Director, Real Estate Regionals francemediainc.com. Periodicals postage has given newfound hope to retail John Nelson ...... Editor paid at Atlanta, GA, and additional mail- professionals as shoppers and diners Julia Sanders ...... Assistant Editor ing offi ces. Jerry France Scott France begin to frequent stores and restau- Kristin Hiller ...... Assistant Editor POSTMASTER: Send address changes Chairman & CEO President rants more and restrictions are lifted. Jeff Shaw ...... Assistant Editor to: Southeast Real Estate Business, P.O. Taylor Williams...... Assistant Editor In North and South Carolina, the retail ed near-shoring of manufacturing. Box 308, Skokie, IL 60076. Sarah Daniels...... Content Manager real estate community is also bullish Investors are competing for deals Southeast Real Estate Business is a reg- Lynn Peisner ...... Staff Writer as their populations continues to grow and are looking at portfolio transac- Nick Topolski ...... Graphic Designer istered trademark of France Publications, and jobs recover. tions and joint venture arrangements Julie Hunt ...... Graphic Designer Inc. Subscription rates: USA 1 year $69; 2 The tailwinds in place should help to build up their industrial holdings. years: $116. Single copies are $10.00. For ADVERTISING the Carolinas’ top retail markets make One source says the only tricky thing subscriber services, including change of Scott France ...... Co-Publisher up for lost time, and developers and has been convincing owners now is a Ryan Nixon ...... Associate Publisher address or subscriptions, please email brokers are hopeful the region will good time to sell [email protected] or call (855) 736-2644. reach new heights using the lessons Just like shopping centers in the Car- INTERFACE CONFERENCE GROUP ©2021 France Publications, Inc. For they’ve learned this past year. Read olinas, France Media and our InterFace Richard Kelley ...... Senior Vice President reprints or to photocopy articles, please Alicia Turlington ...... Conference Manager more about the Carolinas retail scene Conference Group are also returning contact Barbara Sherer, manager of spe- Kelly Moustafa...... Conference Coordinator in our cover article. to normal with conferences and webi- Jada Braxton...... Conference & Marketing Associate cial advertising at (404) 832-8262. Our second feature is a look at indus- nars, some virtual and some in-person. The opinions and statements made trial acquisition activity. The hand’s Be sure to visit interfaceconferencegroup. CIRCULATION AND ADMINISTRATION by authors, contributors and advertis- down darling of commercial real es- com for more information about our Teresa Hennington ...... Of ce Manager ers to Southeast Real Estate Business are tate is industrial as it benefi ts from the slate of informative events that you’ll Janet Shan ...... Executive Assistant & Billing Specialist not necessarily those of the editors and Carol Spach ...... Director of Audience Development growth of e-commerce and the expect- want to attend. publishers.

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© 2021 Berkadia Proprietary Holding LLC. Berkadia® is a trademark of Berkadia Proprietary Holding LLC. Commercial mortgage loan banking and servicing businesses are conducted exclusively by Berkadia Commercial Mortgage LLC and Berkadia Commercial Mortgage Inc. This advertisement is not intended to solicit commercial mortgage loan brokerage business in Nevada. Investment sales / real estate brokerage business is conducted exclusively by Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. Tax credit syndication business is conducted exclusively by Berkadia Affordable Tax Credit Solutions. In California, Berkadia Commercial Mortgage LLC conducts business under CA Finance Lender & Broker Lic. #988-0701, Berkadia Commercial Mortgage Inc. under CA Real Estate Broker Lic. #01874116, and Berkadia Real Estate Advisors Inc. under CA Real Estate Broker Lic. #01931050. For state licensing details for the above entities, visit www.berkadia.com/legal/licensing. SOUTHEAST GROUNDBREAKERS Advertising Section

Avison Young, North Carolina Bayer Properties, Alabama Capital Square, Virginia Foundry Commercial, Tennessee JLL, Georgia Avison Young has promoted Birmingham-based Bayer Capital Square, a national in- Foundry Commercial, a full-ser- JLL announced that John Emily Bostic to the role Properties has hired Lindsay vestment sponsor specializing vice real estate services and Weber and Bill Shippen of research manager. Bostic Vetzner as vice president of in tax-advantaged real estate investment fi rm with offi c- have joined the fi rm’s Atlanta is responsible for directing all anchor leasing, overseeing big offerings, announced today that es across the Southeast, is offi ce focused on multifamily research activity for Avison box leasing and development Jeffrey Blount has joined pleased to announce that investment advisory transac- Young’s Raleigh-Durham and Bostic efforts across Bayer’s 10 mil- Vetzner the company as chief technol- Blount John Mudgett has joined Mudgett tions in the Atlanta area and Weber Charlotte offi ces. She lever- lion-plus-square-foot portfolio. ogy offi cer. Blount brings to his the fi rm as senior vice presi- greater Southeastern United ages market intelligence for thought lead- Vetzner will join Bayer’s Mid-Atlantic offi ce role at Capital Square experience aligning IT dent in Foundry’s Nashville offi ce, primarily States. Weber is joining JLL ership content and tracks key real estate in Philadelphia. Vetzner joins Bayer after with business objectives, optimizing logistics focused on offi ce leasing. In his role, Mudgett as a senior managing director and economic metrics to produce insights. a six-year tenure with Pennsylvania Real Es- for IT performance, customizing and improving will work on offi ce leasing assignments in the and will oversee the Southeast Prior to her current position, Bostic served as tate Investment Trust (PREIT) where he led technology services and processes, as well as greater Tennessee region, serving as both a multifamily investment adviso- the research analyst for Avison Young’s Ra- the big box and outparcel leasing efforts, executive consulting. Prior to Capital Square, landlord and tenant representative. Mudgett ry team. Weber was a founding Shippen leigh-Durham offi ce for three years, during leasing over 1.3 million square feet, includ- Blount served as virtual chief information of- recently relocated to Nashville from Califor- partner of Apartment Realty which time she was responsible for tracking ing eight redeveloped Sears, Macy’s and JC fi cer at Cobb Technologies. Blount earned a nia, where he started his commercial real Advisors, which was later acquired by BGC and analyzing commercial real estate mar- Penney anchor stores. Vetzner’s career spans bachelor’s degree from Bluefi eld College and estate career in 2006 with stints in both Los Partners/Newmark Knight Frank. Shippen ket data. Bostic takes the helm from Avison coast-to-coast from vertical projects in the an associate of science degree in electronics Angeles and Sacramento. Mudgett is a grad- joins JLL as a managing director with more Young’s long-time head of research, Eliza- Bronx, New York to a Southern California engineering technology from Virginia Western uate of Pepperdine University. than 20 years of experience in the industry. beth Gates, who is transitioning to a new shopping center landscape. Community College. Prior to joining JLL, he was a principal at role within the Raleigh offi ce. Apartment Realty Advisors and an executive managing director at Newmark Knight Frank.

Katz & Associates, Tennessee MacKenzie, Maryland RangeWater Real Estate, Florida Walker & Dunlop, Maryland Brian Katz, CEO of Katz & Asso- MacKenzie Commercial Real RangeWater Real Estate an- Walker & Dunlop Inc. an- ciates, is pleased to announce Estate Services LLC is pleased nounced the appointment of nounced that Dana Wade To publish news about that Molly Marcum has to announce that Dylan Bo- Josh Colter as director of has joined the fi rm as chief joined the fi rm. Marcum joins zel has joined its brokerage acquisitions for the Southeast, production offi cer for all Federal new hires, promotions Katz’s Tennessee offi ce work- team as a real estate advisor. where he will spearhead the Housing Administration-backed ing on tenant and landlord Marcum Working from the fi rm’s Lu- Bozel company’s initiatives for new Colter loan originations with the U.S. Wade or awards, visit representation. Previously, therville, Md., offi ce, Bozel will multifamily acquisitions and Department of Housing and www.francemediainc. Marcum was at Boyle Investment Co. where partner with industry leaders Bill Whitty, Joe equity partners, while also overseeing Range- Urban Development (HUD). Wade will also she worked on prospecting, creating and im- Bradley, Matt Mueller and Henson Ford. He Water’s current multifamily portfolio in the be responsible for helping drive the compa- com/regional-ground- plementing merchandising plans, marketing will support leasing and sales activities for region. Colter brings more than 16 years of ny’s affordable housing fi nancing activities. and the leasing of Boyle’s projects including offi ce, mixed-use, fl ex and medical properties global, national and regional expertise in ac- She previously served as the commissioner of breakers. Capitol View and McEwen Northside. Mar- throughout the greater Baltimore metropolitan quisitions, private equity, asset management the FHA. Wade also held senior roles in Con- Questions? cum also helped create the agency’s Tenant area. Bozel will work with team members to and joint venture structuring. Since 2015, he gress, including deputy staff director for the Cares program, a very successful initiative generate new leasing prospects, identify mar- has been responsible for over $1.7 billion of Senate Committee on Banking, Housing, and Contact Barb Sherer that facilitated communications with tenants ket opportunities and support business devel- multifamily apartment, hotel and offi ce ac- Urban Affairs and deputy staff director for the at 404.832.8262 and helped generate new leases and renew- opment initiatives. Prior to joining MacKenzie, quisitions. Based in Miami, Colter will focus Senate Committee on Appropriations. Wade als. Marcum graduated from the University Bozel worked for staffi ng fi rm Ajilon as a client on private equity investments and multifamily graduated from Georgetown University with a or bsherer of Georgia. She is an active member of ICSC relations and staffi ng manager. development, acquisitions and operations. bachelor’s degree in economics and earned an and is a licensed real estate salesperson in MBA from the Wharton School at the Univer- @francemediainc.com Tennessee. sity of Pennsylvania. FINANCE FINANCIAL SCOREBOARD Loans Recently Closed For Southeast Properties

LOCATION PROPERTY CLASS SIZE AMOUNT LENDER ARRANGED BY (CITY, STATE)

Bank of America Tower Ofﬁ ce Jacksonville, Fla. 662,241 SF $61.3 million Prime Finance Walker & Dunlop

Eastboro V Ofﬁ ce Tysons, Va. 222,989 SF $50 million Unnamed national bank JLL

The Shore Apartments Multifamily Lakeland, Fla. 300 units $38.2 million Fannie Mae NorthMarq

City National Bank of Time Century Mixed-use Miami 225,000 SF $23.6 million Florida Undisclosed

Capstone at Kinsey Cove Affordable housing Dothan, Ala. 50 units $11.6 million HUD Bellwether Enterprise

River Ridge Apartments Multifamily Riverdale, Ga. 150 units $8.1 million Fannie Mae American Street Capital

1323 Greenwood Road Industrial, Self-Storage Pikesville, Md. 177,000 SF $3 million MD Energy Advisors Undisclosed

We’re the largest independently owned capital markets firm – known for our valued relationships ADVOCATE. and strong results. While you can count on us as your advocate, adviser, and ally, we are your partner long after closing a specifictransaction. ADVISER. With our unmatched network of buyers, sellers, and capital sources, we can provide certainty of execution and protection of your investments ALLY. in any market conditions. DEBT & EQUITY + INVESTMENT SALES EXPERTS northmarq.com

SOUTHEAST REGION

www.REBusinessOnline.com Southeast Real Estate Business • March 2021 • 7 CAROLINAS

JAMESTOWN, GRUBB Grant Linderman and Gary Lyons of VENTURES BREAK GROUND Avison Young represented the seller, ON $150 MILLION RALEIGH LSP Verris Eastchester LLC, in the IRON WORKS PROJECT transaction. Peters Development LLC RALEIGH, N.C. — Jamestown and purchased the shopping center for Grubb Ventures have started construc- $9.5 million. Eastchester Shopping tion on the first phase of Raleigh Iron Center was fully leased at the time of Works, a new mixed-use development sale to tenants including Office Depot, with nearly 500,000 square feet of of- Dollar Tree, Hooters, Dunkin’, H&R fice space, 90,000-plus square feet of Block and Plato’s Closet. retail and 220 new residential units. Brasfield & Gorrie is part of the con- DOLLAR TREE SELLS METRO struction team. Raleigh Iron Works CHARLOTTE DISTRIBUTION was designed with a mix of shopping, CENTER FOR $10.5 MILLION dining, wellness, event and outdoor MATTHEWS, N.C. — Dollar Tree Inc. spaces. The first phase includes the has sold a 354,518-square-foot indus- renovation of the historic Peden Steel trial property in metro Charlotte for mills and warehouses into office and $10.5 million. The facility, known as retail spaces, along with the construc- Eastside Logistics Center, is located tion of a new seven-story multifamily on 43.5 acres at 10301 Monroe Road building. Phase I, which will include a in Matthews. The Silverman Group Eastside Logistics Center was sold vacant and is part of a larger complex, the parking deck of nearly 700 spaces and bought the property. Chris Skibinski remainder of which is occupied by Family Dollar, a subsidiary of Dollar Tree. a planned greenway connection, is ex- of Avison Young’s Charlotte office and pected to open in 2022. Jeff Heller in Avison Young’s New Jer- CNC CABINETRY SIGNS A industrial space within Spartan sey office represented Dollar Tree in 109,000 SF INDUSTRIAL Ridge Logistics Center since 2018. The AVISON YOUNG BROKERS the transaction. The building was sold LEASE IN SPARTANBURG speculative industrial space is located $9.5 MILLION SALE OF vacant and is part of a larger complex, SPARTANBURG, S.C. — CNC Cabi- at 2000 Nazareth Church Road near EASTCHESTER SHOPPING the remainder of which is occupied by netry, a manufacturer and distributor Interstate 85. Dillon Swayngim of Col- CENTER IN HIGH POINT Family Dollar, a subsidiary of Dollar of kitchen and bathroom cabinetry liers International represented CNC HIGH POINT, N.C. — Avison Young Tree. The property is being marketed and countertops, has leased 109,000 Cabinetry in the lease transaction. has brokered the sale of Eastchester for last-mile distribution, light manu- square feet of newly built speculative Travis Hicks and Chase Clancy of Col- Shopping Center, a 63,000-square-foot facturing and other uses that will have industrial space in Spartanburg. The liers’ Austin office referred the tenant. neighborhood retail center located at direct impact to nearby household landlord, Atlanta-based Rooker, has Trey Pennington and Jeff Benedict of 274 Eastchester Drive in High Point. density areas. developed 559,000 square feet of Class CBRE represented the landlord.

www.realtylinkdev.com

In March of 2021 RealtyLink added Josh Lewis to continue the charge into cold storage development. Josh will partner with RealtyLink of Atlanta’s Principal Thomas Eldridge with ve new markets under development. Josh is an Air Force veteran who comes to RealtyLink with 20+ years in construction, food production and cold storage development. Most recently, Josh worked for Americold Logistics THOMAS ELDRIDGE, III JOSH LEWIS as head of cold storage design in their Principal – RealtyLink of Atlanta VP of Cold Storage Development business development department. Josh’s 678.488.0407 334.447.9733 focus with RealtyLink will be large scale [email protected] [email protected] cold storage design, pipeline development and project implementation.

NOW PRE-LEASING OVER 1.5 MILLION SF ACROSS THE SOUTHEASTERN UNITED STATES AND BEYOND • HOUSTON, TX – Q2 2022 DELIVERY • CHARLESTON, SC – Q2 2022 DELIVERY • MOBILE, AL – Q3 2022 DELIVERY • WILMINGTON, NC – Q3 2022 DELIVERY

REPRESENTATIVE PROPERTY • GAINESVILLE, GA – Q1 2023 DELIVERY

8 • March 2021 • Southeast Real Estate Business www.REBusinessOnline.com FLORIDA

TARGET SIGNS 77,000 SF nities including four restaurants, two LEASE AT CENTROCITY outdoor pools and a full-service spa. MIXED-USE PROJECT IN MIAMI In addition, the resort features two MIAMI — Target has signed a bars/lounges, a 24-hour fi tness center, 77,000-square-foot lease as part of a poolside bar and free transportation Terra’s CentroCity mixed-use rede- to all Disney theme parks. velopment located at 3825 NW 7th St. in Miami. Construction is expected to FRANKLIN STREET SECURES start this summer. Arquitectonica and 136,000 SF INDUSTRIAL RSP Architects are designing Cen- LEASE WITH TRAILER troCity. As part of the project, Terra MANUFACTURER IN DELAND is redeveloping what was previously DELAND, FLA. — Franklin Street has known as Central Shopping Plaza into secured a 136,000-square-foot, full- a 38-acre mixed-use project. The plans building warehouse lease with trailer include up to 1,200 residential apart- manufacturing company ALCOM ments, green space for residents, an LLC. The property is located at 2526 offi ce building and a shopping cen- W. New York Ave. in DeLand. Frank- ter with 300,000 square feet of retail lin Street’s industrial team negotiated and restaurant space. CentroCity will the lease on behalf of the landlord, feature three eight-story multifamily Blackmore Family Trust. ALCOM’s buildings with 460 rental apartments. Target signed a 77,000-square-foot lease as part of Terra’s CentroCity mixed-use new facility is approximately 40 miles Future phases with additional mul- redevelopment in Miami. Construction of CentroCity will begin this summer. north of Orlando and is close to ma- tifamily units and a 250,000-square- jor highways such as State Road 44, foot, Class A offi ce building are also underwent more than $1 million in Reudelhuber and Alexandra Lalos Interstate 75, Interstate 95, Florida’s planned. The project’s plan includes capital improvements over the past of HWE represented the undisclosed Turnpike and Interstate 4. The facil- seven new multifamily buildings lin- three years, including upgrades to the seller in the transaction. The buyer and ity features 24-foot clear heights, 3,600 ing the property behind the Target- roof, lobby and elevator systems. The sales price were also not disclosed. square feet of offi ce space, 21 dock anchored shopping center. property spans an entire city block The seller previously implemented doors and upgraded electricity and between Links and North Osprey an extensive multimillion-dollar reno- lighting. Previously occupied by a SUFFOLK OPENS 226-UNIT avenues. The building was approxi- vation to upgrade the property to a cabinet manufacturer, the property is SANCTUARY AT DORAL mately 70 percent occupied at the resort-style complex. The Sheraton currently being renovated to accom- APARTMENTS NEAR MIAMI time of sale. Douglas Mandel of In- Lake Buena Vista Resort is located one modate ALCOM’s manufacturing DORAL, FLA. — Suffolk, a Florida- stitutional Property Advisors, a divi- mile from Walt Disney World. The needs. The fi rm is expected to take oc- based general contractor, has opened sion of Marcus & Millichap, marketed property offers numerous guest ame- cupancy of the property immediately. Sanctuary at Doral, a 226-unit apart- BB&T Financial Center for sale. Scott ment community located at 9400 NW Wadler of Berkadia’s Miami offi ce ar- 41st St. in Doral. Shoma Group se- ranged acquisition fi nancing through lected Suffolk as the builder and MSA Prime Finance. Architects as the designer. The development exceeds 500,000 square feet MCCRANEY PROPERTY TOP TALENT. and features two fi ve-story parking ACQUIRES 40 ACRES garages, two standalone retails build- IN OCOEE FOR SPECULATIVE INDUSTRY ings with grade parking, a three-sto- INDUSTRIAL DEVELOPMENT ry clubhouse, eight acres of outdoor OCOEE, FLA. — McCraney Property LEADERSHIP. amenities and a ground-fl oor pool. Co., a private industrial real estate de- According to Apartments.com, Sanctu- velopment and investment fi rm, has MARKET ary at Doral’s rental rates range from acquired 40 acres in an off-market as- $2,289 to $3,815 per month. Commu- semblage of three parcels just south of INTELLIGENCE. nity amenities include a fi tness center, East Fullers Cross Road in Ocoee. The sauna, spa, pool with a sundeck and purchase price was not disclosed. The cabana, playground, bike storage, company plans to develop Progress walking trails, game room, Zen gar- Commerce Park, a six-building, Class den and a picnic area. A speculative industrial park totaling 480,560 square feet. Currently, the pro- TRICERA CAPITAL ACQUIRES posed site plan is under review with OFFICE BUILDING IN the City of Ocoee, as well as a zoning SARASOTA FOR $35 MILLION change request. If approved, Progress SARASOTA, FLA. — Tricera Capital Commerce Park will be developed in has acquired a nine-story, Class A of- three phases. The sellers are Lawrence fi ce building in downtown Sarasota Levin, Patricia Donahue, Thomas known as BB&T Financial Center. West and West & West LLC, according The Miami-based real estate invest- to Orlando Business Journal. Neither ment fi rm purchased the offi ce build- the seller’s nor McCraney Property As the global leader in commercial real estate ing for $35 million. Tricera Capital had brokers in the acquisition. services, CBRE delivers world-class consulting and partnered with private investor Alex advisory services to all of our clients in Greenville Karakhanian and Fort Lauderdale, HODGES WARD ELLIOTT and beyond. Our unparalleled local market insight, Fla.-based investment fi rm Merri- ARRANGES SALE OF integrated services and proven expertise continue mac Ventures on the acquisition. The SHERATON LAKE BUENA to unlock the power and potential of real estate for seller was private real estate investor VISTA RESORT IN ORLANDO everyone we proudly serve. George Spector. BB&T Financial Cen- ORLANDO, FLA. — Hodges Ward ter is located at 1800 Second St. The Elliott (HWE) has arranged the sale 550,000-square-foot building spans of Sheraton Lake Buena Vista Resort, across two towers and features 500 a 486-room hotel located at 12205 S covered parking spaces. Originally Apopka Vineland Road in Orlan- Learn more at cbre.us/greenville developed in the 1980s, the building do. Mark Elliott, Daniel Peek, Rudy www.REBusinessOnline.com Southeast Real Estate Business • March 2021 • 9 GEORGIA AIRBNB SELECTS ATLANTA FOR EAST COAST TECH HUB ATLANTA — Airbnb plans to open a technical hub in Atlanta by the end of 2021. The company did not disclose what area of Atlanta that it is going to occupy. The San Francisco-based lodg- ing company originally made plans to open the hub in 2019 but had to stop development due to travel restrictions and the COVID-19 pandemic. Airbnb anticipates the hub will be home to one of its product developments teams and will become the regional base for hundreds of technical and non-technical roles over time. Atlanta was the city that Airbnb chose due to its strong educational infrastructure and supporting communities of color. If any economic incentives or credits are associated with the East Coast hub location, Airbnb plans to donate them back Middle Street Partners and PCCP have begun construction on an unnamed, six-story apartment community in Atlanta’s Grant Park to Atlanta for community initiatives. district. The property will feature 323 units and provide frontage along the Southside Trail of the Atlanta BeltLine.

LEE & ASSOCIATES ARRANGES 589,680 SF VIKING CAPITAL ACQUIRES Real Estate LLC is a full-service com- er Exchange, a 263,651-square-foot INDUSTRIAL LEASE APARTMENT COMMUNITY mercial real estate development com- shopping center in Lawrenceville. IN BRASELTON IN STOCKBRIDGE pany based in Kansas City, Mo. No The property is anchored by Kroger, BRASELTON, GA. — Lee & Associ- FOR $52.7 MILLION other development team members which recently extended its lease by ates’ Atlanta office has arranged a STOCKBRIDGE, GA. — Viking Capi- were disclosed. five years. John Tennant and Bryan 589,680-square-foot industrial lease tal has acquired Marbella Place, a Belk of Franklin Street represented the at Park 85 Business Park in Braselton. 368-unit apartment community in the MIDDLE STREET, PCCP BEGIN local owner, Monarch Investments, in Billy Snowden, Rick Tumlin and Mike south Atlanta suburb of Stockbridge. CONSTRUCTION ON 323-UNIT the $19.3 million disposition. In ad- Sutter of Lee & Associates represented The Tysons, Va.-based multifamily APARTMENT COMMUNITY dition to Kroger, River Exchange’s the tenant, California-based Compt- investment firm purchased the prop- IN ATLANTA’S GRANT PARK tenants include Goodwill, Farmers ree Inc., in the lease transaction. Bob erty from the undisclosed seller for ATLANTA — Middle Street Part- Home Furniture, Metro by T-Mobile, Currie, Brad Pope and Reed Davis $52.7 million. Marbella Place, built in ners and equity partner Pacific Coast Citi Trends, Habitat for Humanity of JLL represented the landlord, Los 1999 and fully renovated in 2017, is Capital Partners (PCCP) have bro- ReStore, Hertz, Cato and One Main Angeles-based CBRE Global Inves- a 351,640-square-foot complex. The ken ground on a 323-unit apartment Financial, as well as a Kroger fuel cen- tors. The newly built facility is located property features a pool, two play- community in Atlanta’s Grant Park ter. River Exchange is located at 2100 at 1380 Jesse Cronic Road in Atlanta’s grounds, a newly redesigned club- district. Middle Street expects to fin- Riverside Parkway, about 29 miles I-85 Northeast submarket. This is the house and detached garages. The ish the property in 2023, with the from downtown Atlanta in Gwinnett third Atlanta facility for Comptree, apartment complex is situated at 3470 first residences available in Novem- County. which specializes in the acquisition Mountain Zion Road, 13 miles south ber 2022. Brock Hudgins Architects is and distribution of furniture, outdoor of Hartsfield-Jackson Atlanta Interna- spearheading design, and J.M. Wilk- BERKADIA NEGOTIATES accessories and printer media. The tional Airport. The property has one-, erson Construction Co. is the general $7.8 MILLION SALE OF ARBOR company supports e-commerce via two- and three- bedroom apartment contractor. Middle Street Partners, a GARDENS MULTIFAMILY websites Meritline and ABCink. homes with oversized closets and Charleston-based real estate invest- PROPERTY IN SOUTH ATLANTA kitchens with both a microwave and ment and development company, ATLANTA — Berkadia has brokered SRS BROKERS SALE icemaker. paid $6.9 million for the land. The un- the $7.8 million sale of Arbor Gardens, OF 18,550 SF RETAIL CENTER named property is located on the At- a 102-unit multifamily property in IN NORCROSS VANTRUST BREAKS GROUND lanta BeltLine’s expanding Southside Atlanta. Matthew White, Paul Vetter, NORCROSS, GA. — SRS Real Es- ON 515-ACRE INDUSTRIAL Trail. The six-story apartment com- Andrew Mays and Judy MacManus tate Partners’ Investment Properties DEVELOPMENT NEAR munity will feature a combination of of Berkadia’s Atlanta office led the Group has brokered the sale of an SAVANNAH studio, one- and two- bedroom units, transaction on behalf of the seller, a 18,550-square-foot retail strip center BRYAN COUNTY, GA. — VanTrust 15 percent of which will be available joint venture between Atlantica and in Norcross. The seller, an entity do- Real Estate LLC has broken ground on at 80 percent of area median income Auerbach Funds. Arbor Gardens sold ing business as OMI 5770 IB LLC, the 515-acre Interstate West industrial (AMI). The unnamed property’s units to White Mountain Management, and sold the property to Shallya Whole- development in Bryan County, just will feature designer cabinetry and the sales price equates to $76,471 per sale Distributing LLC for $4.3 million. 30 miles west of Savannah. The first lighting, quartz countertops, stainless unit. The property was 99 percent The property, known as Peachtree phase includes a 1.2 million-square- steel and gas appliances, island sinks occupied at the time of sale. Built in Corners Pavilion, is located at 5770 foot speculative, Class A warehouse and top-control dishwashers, along 1973, Arbor Gardens is located at 5503 Peachtree Industrial Blvd. The center that will deliver in the fourth quarter. with dedicated office spaces designed Riverdale Road in the Atlanta portion is situated on the border of Norcross Overall the park will have the capac- with new work-from-home policies in of Clayton County. The property is and Peachtree Corners, and sits on ity for 4.9 million square feet of indus- mind. Community amenities include 3.4 miles south of Hartsfield-Jackson roughly 1.9 acres. It was fully leased trial space. Danny Chase and David a 24-hour fitness center, courtyard International Airport. The commu- at the time of sale to retailers includ- Sink of Colliers International | Sa- pool, dog park and coworking spaces. nity’s amenities include a swimming ing TapOut Fitness, Avis, Shane’s Rib vannah are marketing Interstate West pool, playground, sports court and Shack and CBD Plus USA. The retail for lease on behalf of VanTrust. Situat- AMERICA’S REALTY BUYS community garden. Atlantica is a center was built in 2006. Kyle Stonis ed just off Interstate 16 and Highway RIVER EXCHANGE SHOPPING real estate firm based in Atlanta, Au- and Pierce Mayson of SRS’ Invest- 280, Interstate West will be situated CENTER IN LAWRENCEVILLE erbach Funds is a real estate private ment Properties Group represented about 22.6 miles from Port of Savan- FOR $19.3 MILLION equity firm based in New York and the seller in the transaction. Chase nah, 15 miles from Interstate 95 and LAWRENCEVILLE, GA. — America’s White Mountain Management is an Murphy of Skyline Seven Real Estate 18 miles from the Savannah/Hilton Realty LCC, a Baltimore-based in- independent investment firm based in represented the buyer. Head International Airport. VanTrust vestment group, has purchased Riv- New Jersey. 10 • March 2021 • Southeast Real Estate Business www.REBusinessOnline.com GULF SOUTH

MIA ROSE, ERC BREAK PALOMAR GROUP ARRANGES at the time of sale to tenants includ- ser of HREC exclusively represented GROUND ON 234-UNIT SALE OF RETAIL CENTER ing Pizza Hut, Weight Watchers and the seller, Hotel Capital LLC, in the MULTIFAMILY COMMUNITY IN COLUMBUS, MISSISSIPPI Sally Beauty. Kroger shadow-anchors transaction. Barry Swanson, Michael IN SPRINGDALE, ARKANSAS COLUMBUS, MISS. — The Palo- Delchamps Plaza. The Palomar Group Salloway, Ketan Patel and Scott Ste- SPRINGDALE, ARK. — Mia Rose mar Group has brokered the $1.7 is an investment sales fi rm based in phens of HREC assisted in the transac- Holdings and ERC Construction million sale of Delchamps Plaza, an Augusta. tion as well. The buyer, Atlanta-based Group have formed a joint venture 18,870-square-foot retail center in Generation Hospitality, will manage to build Pure Springdale, a 16-build- Columbus. The buyer was an un- HREC BROKERS SALE the hotel. The sales price was not dis- ing, 234,000-square-foot multifamily disclosed regional shopping center OF SHERATON HOTEL closed. The Sheraton Galleria Metai- community in Springdale. Courtyard owner, and the seller was an invest- IN METAIRIE, LOUISIANA rie Hotel is located at Four Galleria Building and Block LLC is the archi- ment group based in New York. The METAIRIE, LA. — HREC Investment Blvd. and is fi ve miles from the New tect, Crafton Tull is the engineer of Palomar Group represented the seller. Advisors has brokered the sale of the Orleans Botanical Garden and seven record and Trinity Multifamily is the Located at 1801 Highway 45 N, Del- 181-unit Sheraton Galleria Metairie miles from Louis Armstrong New Or- property manager. Mia Rose and ERC champs Plaza was 100 percent leased Hotel located in Metairie. Len Worm- leans International Airport. recently broke ground on the 234-unit property, which is scheduled to be complete in fall 2022. The project includes new construction of one- and two-bedroom apartment units on 13.7 acres. The apartment complex will feature walking trails, three ponds, a resort-inspired pool, 1,300-square-foot fi tness center, technology lounge/ business center, gated dog park and numerous green spaces with grills and seating.

MARCUS & MILLICHAP NEGOTIATES $25.8 MILLION SALE OF MULTIFAMILY PROPERTY IN BIRMINGHAM INTRODUCING LUMENT. BIRMINGHAM, ALA. — Marcus & Millichap has brokered the $25.8 THE PEOPLE YOU ALREADY million sale of The Park at Forest- dale, a 486-unit multifamily asset KNOW AND LOVE. in Birmingham. The property sold for $52,984 per unit. Josh Jacobs of Marcus & Millichap represented the seller, an affi liate of Birmingham- based Four Four Capital. Jacobs also procured the buyer, a partnership between Arch Co. and Drake Real Es- tate Partners. Built between 1968 and 1980, the Park at Forestdale is located 5.7 miles from downtown Birming- ham and 6.2 miles from The Uni- versity of Alabama at Birmingham. Community amenities include a fi t- ness center, pool and a playground. The property features studios and one-, two- and three-bedroom apart- Hunt Real Estate Capital, Lancaster Pollard, ments. and RED Capital Group are now MAG CAPITAL ACQUIRES 14,004 SF ENTERTAINMENT VENUE IN FAYETTEVILLE, ARKANSAS FAYETTEVILLE, ARK. — MAG Capital Partners has acquired a 14,004-square-foot restaurant, brewery and entertainment venue in Fay- Our talented people have always shared a simple yet powerful idea: that lending is more etteville. The property is operated by JBGB Restaurant and JJ’s Beer Gar- than a loan. To us, it’s about relationships, commitment, and driving the success of our den & Brewery, and offers an outdoor clients. Now with the strength of our combined platforms and the depth of ORIX’s balance playground, a stage for live music and sheet, we can draw on even more products and resources to make our personal service a 225-seat dining area. The new own- more valuable than ever. Discover all we can offer at Lument.com. ership plans to immediately break ground on a 10,921-square-foot expansion of the JBGB restaurant and FANNIE MAE | FREDDIE MAC | FHA | BRIDGE | MEZZANINE | PREFERRED EQUITY | M&A venue. Judd Dunning of DWG Capi- tal Group arranged the sale-leaseback transaction on behalf of MAG Capital ORIX Real Estate Capital Holdings, LLC, d/b/a Lument, is a subsidiary of ORIX Corporation USA. Partners. T.J. Lefl er with Sage Partners Securities, Investment Banking and Advisory Services provided through OREC Securities, LLC, d/b/a Lument Securities. represented the seller, JBGB Restau- rant and Brewery. www.REBusinessOnline.com Southeast Real Estate Business • March 2021 • 11 MID-ATLANTIC

KOUCAR, DONOHOE DEBUT from Arlington County’s Affordable $58 MILLION CAMBRIA HOTEL Housing Investment Fund (AHIF). IN SOUTHWEST D.C. The redevelopment was awarded $2.5 WASHINGTON, D.C. — Cambria Ho- million in 9 percent low-income hous- tel Washington DC Capitol Riverfront ing tax credits (LIHTC) and approxi- has opened in southwest Washington, mately $1 million in 4 percent LIHTC D.C. Michigan-based Koucar Manage- equity. Michael T. Foster Architects ment and Donohoe Cos. Inc. co-devel- designed the apartment community, oped the nine-story, 154-room proper- and Harkins Builders constructed the ty. BBGM Architects and DiLeonardo property. designed the hotel, which is valued at $58 million. The hotel’s amenities 28 WALKER TO DEVELOP include guest rooms with spa-style 125,000 SF TIMBER OFFICE bathrooms, 24-hour room service, a BUILDING IN BALTIMORE fitness center, full-service restaurant BALTIMORE — 28 Walker De- with patio seating and 1,500 square velopment will build a five-story, feet of meeting space. The property 125,000-square-foot office building also has a 3,500-square-foot rooftop at 4010 Boston St. in Baltimore City, terrace offering skyline views. Cam- known as 40TEN. The Class A office bria is a hotel flag under Choice Ho- space will be delivered in early 2022. 40TEN will be a five-story, 125,000-square-foot office building in downtown Baltimore. tels International. An official grand 40TEN is the first commercial office The project will be the first commercial project in the city using timber materials. opening celebration at the hotel will building in downtown Baltimore con- be held later in 2021. structed entirely using heavy wood timber materials. 28 Walker chose to and care center, signed a lease with 28 ally grow the staff to over 1,000. Char- AHC DELIVERS $100 MILLION utilize heavy timber based on the ma- Walker as the inaugural tenant at the lotte-based Aston Capital acquired the AFFORDABLE HOUSING terial’s positive energy efficiency at- building. Joe Nolan of NAI KLNB is White Oak Village building in Febru- PROPERTY IN ARLINGTON tributes, with flooring, columns and handling all marketing and leasing for ary 2020 through an affiliate company, ARLINGTON, VA. — AHC Inc. has exposed ceilings all comprising natu- the building. AC Richmond. The company then delivered The Apex, a 256-unit afford- ral wood. 40TEN is part of the Col- made renovations to the property, able housing community in Arling- lective at Canton, a mixed-use project T-MOBILE OPENS 131,000 SF including a new exterior facade and ton. AHC Management, a subsidiary developed by 28 Walker that features CUSTOMER CARE CENTER renovated parking and landscaping. of AHC Inc., is managing the $100 a Sprouts Farmers Market, Sola Salon AT FORMER SAM’S CLUB The firm also added employee ameni- million development and is currently and Chase Bank. Future plans include IN RICHMOND ties including exercise rooms, gaming accepting applications. The Apex fea- an apartment community built by RICHMOND, VA. — T-Mobile U.S. room, onsite café and mother’s room. tures a playground, sport court, com- Greystar and a hotel. The office build- Inc. has opened a 131,000-square-foot The $30 million project, which is adja- munity center, underground parking ing will feature a communal roof- customer care center at White Oak cent to more than 900,000 square feet and fitness room. The community’s top amenity deck free to all tenants. Village, a mixed-use development in of retail, offices, restaurants and hotels one-, two- and three-bedroom apart- The property features 14-foot ceiling Richmond. Aston Capital converted at White Oak Village, was completed ments are available for families earn- heights and enlarged windows. The a vacant, former Sam’s Club at White in October 2020. Frampton Construc- ing 40 percent to 80 percent of area building will include a fitness center, Oak Village into new Class A office tion was the general contractor on the median income (AMI). The communi- touchless entry systems, antimicrobial space for T-Mobile. The Bellevue, conversion and interior upfit, Tim- ty will also offer a variety of social and finishes and specialty HVAC systems Wash.-based mobile phone carrier is mons Group provided civil engineer- educational programs for residents. engineered to improve air quality relocating approximately 500 employ- ing services and McMillan Pazdan The project’s financing includes up to and stimulate outdoor air flow. Cele- ees from Richmond’s Short Pump area Smith Architecture and JPC Architects $20.9 million in revolving loan funds bree School, a childhood education to the building with plans to eventu- were the architects on the project. GULF SOUTH SOMERAROAD TO DEVELOP ALBION RESIDENTIAL TO BUILD and engineering, Hodgson Douglas JLL INCOME PROPERTY $200 MILLION PASEO SOUTH $140 MILLION APARTMENT is in charge of landscape architecture, TRUST BUYS 1 MILLION SF GULCH TOWERS IN NASHVILLE TOWER IN NASHVILLE Stanley D. Lindsey & Associates is the DISTRIBUTION CENTER NASHVILLE, TENN. — SomeraRoad, NASHVILLE, TENN. — Albion Resi- structural engineer and I.C. Thomas- IN METRO LOUISVILLE a commercial real estate investment dential will develop Albion in the son Associates Inc. is the MEP engi- FOR $95 MILLION and development company, is devel- Gulch, a $140 million apartment neer. Construction is expected to be SHEPHERDSVILLE, KY. — Chicago- oping a mixed-use project known as tower at 645 Division St. in Nashville. completed by the end of 2022. based JLL Income Property Trust Paseo South Gulch in Nashville. The Hartford Investment Management has acquired a 1 million-square-foot, $200 million property will be located Co. provided a $87.2 million loan for AMAZON TO OPEN 634,812 SF Class A industrial property known at 620 Eighth Ave. S. The property’s the project. Albion in the Gulch will FULFILLMENT CENTER as Louisville Distribution Center in 16-story Tower 1 is expected to be include 415 studios to three-bedroom IN ALCOA, TENNESSEE Shepherdsville. Atlanta-based Core5 finished by 2023, and the 20-story units, as well as two-story townhomes ALCOA, TENN. — Amazon plans Industrial Partners sold the property Tower 2 is expected to be completed within the tower. The 20-story prop- to open a 634,812-square-foot fulfill- for $95 million. The tenant roster was by 2024. The two towers will total 608 erty will feature interactive events, ment center in Alcoa, which is locat- not named. Built in 2020, Louisville residential units. Between the high as well as its own comedy club that ed 14 miles south of Knoxville. The Distribution Center is located at 170 rises, there will be 18,000 square feet will double as a karaoke venue. Com- development, which is anticipated Clermont Road, within 20 miles of of office space and 14,000 square feet munity amenities will include a cof- to launch in 2022, will create nearly major distribution hubs including of new retail space situated within fee shop, indoor dog run and spa, a 800 new, full-time jobs. Dallas-based UPS Worldport (Air Distribution the original Voorhees Building and poolside tiki bar, indoor/outdoor fit- Hillwood Development Co. Inc. is Hub), UPS Centennial Hub (Ground former Antiques Mall. SomeraRoad ness facility, golf putting greens and developing the project on behalf of Distribution Hub) and Louisville partnered with ESa, Hawkins Part- simulation room and 10,000-square- Amazon. The Alcoa facility will be Muhammad Ali International Air- ners, Manuel Zeitlin Architects and foot sharable workspace. Clark Con- Amazon’s third fulfillment center in port. The property includes 40-foot Kimley-Horn on the design front, as struction is the general contractor, Tennessee to use Amazon Robotics clear heights, cross-docking, LED well as Cushman & Wakefield and and Hartshorne Plunkard Architec- technology and the company’s eighth motion sensor lighting, 234 trailer Ojas Partners for office and retail leas- ture is the architect. Barge Cauthen fulfillment center in the Volunteer parking spaces and HVAC through- ing, respectively. & Associates is in charge of planning State. out.

12 • March 2021 • Southeast Real Estate Business www.REBusinessOnline.com MARKET HIGHLIGHT: BIRMINGHAM INSTITUTIONAL INVESTORS REJOIN BUYER POOL FOR BIRMINGHAM INDUSTRIAL FACILITIES and Clayco’s Lowe’s distribution facil- Gardner Lee ity in Bessemer, large national compa- Principal and nies are developing the new Amazon Co-Founder, and FedEx projects. Growth Capital Partners In addition to the recent transactions in Birmingham, it is noteworthy that the Huntsville market also has seen over 1 million square feet of industrial development attributed to its rapid population growth and from several Since Prologis sold its Birmingham large new manufacturing operations holdings in the late 1990s, the industri- in the area, most notably the Mazda al real estate market in the Magic City Toyota Manufacturing USA plant. has been dominated by local invest- While speculative development in ment groups, with a few national de- the industrial sector has lately been velopers entering the market for either focused on the larger markets or fast- built-to-suit or specialized projects Growth Capital Partners sold 43 properties totaling 11.7 million square feet to Exeter er-growing cities in the Southeast, the like the recent Amazon facilities. As a Property Group. The portfolio included Gazelle I in McCalla, Alabama (pictured). lack of speculative development in the result, institutional investors were un- Birmingham market has driven rents comfortable with the liquidity of this compression in other markets, institu- ers are still focusing mainly on build- up by 13 percent the last five years. If market. tions and REITs are increasingly look- to-suit projects such as the recently speculative development remains low, Several recent acquisitions by na- ing in mid-size markets like Birming- announced Ferguson Enterprises rents should continue to rise, and oc- tional real estate investment groups ham for better yields. While markets warehouse in Avondale, the Graham cupancy rates will remain at their re- have now broken that barrier to entry. such as Nashville and Charlotte are & Co. Mercedes parts facility in Vance cord-high levels. In October 2020, Growth Capital Part- seeing cap rates in the high 4s and low ners (GCP) sold 43 multi-tenant dis- 5s, Birmingham’s market is typically tribution properties comprising 11.7 75 to 100 basis points higher, hovering million square feet to Exeter Property in the upper 5 to low 6 percent cap rate Group (one of the largest institution- range for investment quality proper- al owners of warehouse space in the ties. country), including 2.6 million square Bill Pradat, president of Cushman feet in Birmingham. & Wakefield/EGS Commercial Real At a recent Central Alabama Com- Estate, noted that a recent sale by Hall mercial Market Symposium, Sonny Capital, which is active in all the pre- Culp of Graham & Co.’s Birmingham mier Southeastern markets, to STAG office said, “It’s not uncommon for speaks well for the Birmingham mar- us to see a lot of institutional-type ket’s evolution, regardless of how interest coming to Alabama for these strong the industrial sector has be- single-tenant buildings. But to see Ala- come nationally. bama get on the map as part of a larger Clayton Moss, Hall Capital’s man- transaction from a portfolio buyer like aging director and chief operating of- Exeter with a transaction that mirrors ficer, says the city’s industrial market what you see in larger cities — Atlan- is a larger focus for the firm, especially ta, Charlotte, etc. — that speaks well compared to other asset classes, which for our state [in terms of] how inves- would have to have a compelling sto- tors are starting to look at investing in ry. Hall Capital is continuing to look this market.” in Birmingham for multi-tenant, bulk Publicly traded STAG Industrial industrial distribution centers on the also recently purchased 296,000 square newer side that range from 100,000 feet in Birmingham in December 2020 to 300,000 square feet. A recent exam- for $23.5 million. In addition, the on- ple of this dynamic would be Shades going development of multiple Ama- Creek Business Park, which sold to zon distribution centers has solidified STAG. Birmingham’s place as an institution- Culp said investment sales and ally accepted market. build-to-suits have been strong, and John Huguenard, senior managing he expects to see speculative projects director at JLL, recently remarked that soon. the sale of GCP’s portfolio to Exeter While it is no secret that the pan- “highlights the investment commu- demic has accelerated many trends nity’s laser focus on acquiring institu- that were evolving in consumer spend- tional-quality industrial product from ing and supply chain reconfiguration, market-leading operators in growth the industrial market in Birmingham markets as a defensive play in response certainly reflects the impact of these to a changing landscape brought on by growing trends, with its long-term the COVID-19 pandemic.” high occupancy levels and steadily The Birmingham industrial real es- increasing rental rates. To this end, tate market has experienced a solid GCP reported 100 percent rent collec- 95 percent occupancy rate the last five tions since the pandemic began from years, with strong rental rate growth all properties, including the Alabama averaging 3.6 percent each year. In- assets in the Exeter transaction, which creasing needs by national tenants comprised approximately 25 percent have increased the demand for devel- of the portfolio. opment. Because of continued cap rate In Birmingham, while local develop- www.REBusinessOnline.com Southeast Real Estate Business • March 2021 • 13 MARKET HIGHLIGHT: BIRMINGHAM BIRMINGHAM’S OFFICE MARKET SHOWS STABILITY AMID POST-PANDEMIC RECOVERY tertainment venues. An area to watch is Brad Jones the Parkside District of downtown Bir- Senior Vice President, Birmingham’s greatest need will be to mingham, which has quickly emerged CCIM, as a dynamic growth area with a num- Cushman & Wakefield retain our existing talent and support the ber of innovative and transformative / EGS Commercial Real projects currently underway. Any sig- Estate success of existing businesses. nificant new construction is expected to continue to be generated by build-to- suit projects or with significant preleas- Birmingham’s Midtown submarket totaling approximately 600,000 square ing in place. Has our tertiary office market been maintained the lowest overall vacancy feet: One Federal Place and Renasant impacted by the pandemic? This seems rate at 7.5 percent in the first quarter, Place. Both assets have generated a tre- Submarkets to watch to be a popular question these days. followed by the central business dis- mendous amount of activity and are The two submarkets most interesting The answer is “yes,” but the overall im- trict (CBD) at 14.3 percent. expected to sell in the first half of 2021. to watch currently are Birmingham’s pact has not been as extreme as first-tier Other market indicators also point to In development news, there is one Highway 280 submarket and CBD, markets. The impact has been selective a generally stable office market. Overall notable multi-tenant office project near- both for very different reasons. and varies from one asset to another weighted average asking rents for the ing completion. Located in Midtown, Long before COVID-19, Birming- and from one submarket to the next. Birmingham market increased slightly Steelridge Center is a 35,000-square- ham’s Highway 280 submarket has The Birmingham office market con- to $21.39 per square foot during the foot property being constructed as the historically experienced extreme dy- sists of approximately 19.9 million quarter, up from $20.77 per square foot new headquarters for North Alabama namics ranging from good to challeng- square feet of multi-tenant inventory a year ago. Leasing velocity continued Fabricating Co. The steel fabricating ing. This submarket consists of office across five submarkets, four of which at a pace close to pre-pandemic levels, company will occupy the top floor inventory in two separate counties: have Class A inventory. During first- recording 131,211 square feet of trans- (10,000 square feet), leaving approxi- Jefferson County and Shelby County. If quarter 2021, Birmingham’s multi- actions signed in the first quarter, with mately 24,000 square feet available for you bifurcate this submarket into these tenant office remained flat with 10,851 Class A transactions accounting for lease with an asking rate of $34 per separate counties, the Jefferson County square feet of positive absorption, a 66,640 square feet of that total. square foot full-service. occupancy rate is 91 percent and the relatively positive outcome amid lin- Investment sales activity remains While new construction remains lim- Shelby County occupancy rate is 59 gering pandemic-related uncertainties. steady, as outside investors continue ited throughout Birmingham’s office percent. Overall vacancy fell to 16.8 percent, to find Birmingham as an attractive market, a number of older buildings Grandview Medical Center, which down from 16.9 percent from fourth- market to deploy capital. Our firm is in the CBD are being renovated for of- opened in 2015, continues to serve as a quarter 2020 and slightly above the currently involved in the disposition fice use and redeveloped for alternative catalyst for growth in Jefferson County. 16.2 percent rate in first-quarter 2020. of two Class A buildings in the CBD uses such as retail, residential and en- see OFFICE, page 16

GREENVILLE, SC (GARLINGTON) INDUSTRIAL | FOR LEASE OR BUILD TO SUIT • Now pre-leasing 169,000 SF, subdivisible to 14,040 SF • Interstate 85 & Pelham Road | Greenville, SC 29615 • Additional +/- 11 acres pad ready for build to suit • Inland Port Greer ±8 miles • Interstate Frontage/Visibility • Greenville-Spartanburg International Airport ±4.5 miles • Class A Industrial Spec Building with rear load configuration • FedEx Freight ±9 miles • UPS Freight ±1 mile

BUILDING 1 (UNDER CONTRACT): FRONT BUILDING 1 (UNDER CONTRACT) : BACK

NEIL WILSON HAYDRIAN LEWIS Principal Developer Associate 864-263-5413 864-263-5436 [email protected] [email protected]

14 • March 2021 • Southeast Real Estate Business www.REBusinessOnline.com MARKET HIGHLIGHT: BIRMINGHAM INVESTORS EYE BIRMINGHAM OFFICE ASSETS AS WORKERS RETURN TO THEIR DESKS are acquiring assets that are well-po- vironments with natural light, green West Harris sitioned to take advantage of the mar- natural environments, health and well- Executive Vice President, ket’s economic fortitude and a return- ness options for employees and good CCIM, ing workforce. food options either onsite or in close Harbert Realty Services Investors know that office users are proximity. Some building owners are rethinking how they use office space, ahead of this curve. how much space they will require long- In the Highway 280 Corridor, In- term and redesign scenarios. There is verness Center and Urban Center are not an office tenant in the market that prime examples of projects that are is not contemplating how to make the positioned to address changing tenant The Birmingham office market is ex- workplace safer and more functional needs with green space and opportuni- periencing a resurgence of purchase for their staff. This is creating disrup- ties to reduce office over-population. and investment activity at a time when tion in buildings where tenants have In the central business district (CBD), many business are implementing “relocated long periods of time and op- 1901 6th Avenue North has recently turn to office” work scenarios. Institu- portunity for owners that have large undergone extensive renovations in the tional, family office and high-net-worth blocks of available space to lease. Most service and entry areas of the building investors are returning to the Birming- tenants prefer to relocate rather than to provide tenants more amenities in a ham office market as well for opportu- live through a renovation project, and safe, easily accessible environment. nistic, value-add and core transactions. many Birmingham office tenants have Sophisticated office investors are E-commerce platform Shipt recently Investor confidence is increasing with been in their current locations for more paying attention to the markets in the expanded by 60,000 square feet at the distribution of COVID-19 vaccines than 10 years. Sun Belt, like Birmingham, which are Shipt Tower in downtown Birmingham. and Birmingham’s economic strength, Some major leases have occurred in expected to thrive during the next in- and experts believe there is pent-up recent quarters, despite the pandemic. vestment cycle. Transactions have investor demand that is expected to UAB Business Services leased nearly been completed in the CBD and subur- tion or redevelopment opportunities translate into significant transaction 70,000 square feet in the Bessemer ban markets this year, with other assets continue to fill the transaction stack as volume in the second half of 2021. submarket in the second quarter of in the market under contract to close well. Birmingham has a diversified eco- last year. Furthermore, Shipt, the local mid-year 2021. Investment momentum is following nomic base with large sectors of em- startup turned Target’s e-commerce While the urban core has received a the changing needs of leasing momen- ployment in government, financial and platform, continued its growth by leas- large amount of investor interest in re- tum, and those investors that are ahead trade areas. The current economic out- ing 60,000 square feet in the former cent years, suburban assets have driv- of the curve will be the ones that benefit look predicts less severe job loss rela- Wells Fargo Tower (now Shipt Tower). en the majority of recent sales volume. from market disruption and changing tive to the national average. Investors Overall tenants are seeking office en- High-vacancy properties with renova- tenant needs.

DANVILLE, VA – CANE CREEK CENTRE | FOR LEASE OR BUILD TO SUIT

• Existing 100,000 square foot Butler Building with galvanized steel beams • Building complete and available for review • RealtyLink will nish out facility in accordance with Tenant speci cations or provide TI allowance • 19.063 acre parcel, Lot 6A, located at the entrance of Cane Creek Centre Industrial Park • Cane Creek Centre is new location for 900,000 square foot Morgan Olson facility (formerly IKEA facility), that is manufacturing eet truck delivery vehicles for Federal Express and Amazon • This property is in a designated Opportunity Zone, Enterprise Zone, and eligible for New Market Tax Credits, as well as availability for City, County, and State incentives • Expansion space available for another 100,000 square foot facility on this property • Building has ve, 8’ x 10’ (leveler space available) and one 8’ x 12’ ground level delivery doors • State and RIFA Performance Agreement Incentives available for Operator

OLIVER PERDOMO, Principal – Realtylink of Chattanooga 727.421.8755 • [email protected] • www.realtylinkdev.com www.REBusinessOnline.com Southeast Real Estate Business • March 2021 • 15 MARKET HIGHLIGHT: BIRMINGHAM BIRMINGHAM MULTIFAMILY: DON’T OVERLOOK THIS OPPORTUNITY struggle with supply, suburban sub- Chad Thomas markets are poised for further occu- Hagwood pancy and rent strength. Tenant interest Senior Managing in the larger floor plans, lower density Director, and convenient access to employment Lument and neighborhood shopping found in suburban locations increased during the pandemic, and the shift is likely to linger even as health concerns subside. Only 408 suburban units will be add- Secondary markets, especially sec- ed to inventory this year. None will rise ondary markets located in the South- in the Hoover and Alabaster neighbor- east, are attracting a good deal of at- hoods on the city’s Southside where tention from multifamily investors. tenant demand was focused in 2020, Multifamily sales in metro Birmingham topped $450 million across 32 deals, including Increasingly, renters are forswearing setting the stage for further suburban the $82 million sale of the 722-unit Valora at Homewood (pictured). the primary markets and their high outperformance. housing costs for the relative peace, quiet, affordability, high quality of equals or surpasses its emerging mar- by December — propelled by the man- Property markets life and lower population density of ket rivals, assets are priced competi- ufacturing, logistics, and construction Investors did not shy from Birming- smaller cities. The apartment industry tively and prospective investment re- sectors. This compares favorably to ham opportunities last year, as multi- is shifting focus accordingly. turns are hard to dismiss. respective rehiring rates of 49 percent family sales volume topped $450 mil- A host of metros are touted as the and 56 percent for the U.S. and regional lion across 32 transactions — the largest next hot spot for millennial migration Performing in a pandemic rival Nashville. being Valora at Homewood, which and apartment development. Promi- Birmingham was not immune to Apartment market performance was traded for $82 million, or $113,573 per nent candidates include Boise, Charles- pandemic job losses, but cuts were commensurate. Same-store stabilized unit in November 2020. Although sales ton, Greenville, Knoxville and Tucson, materially less severe than many of its property occupancy stood at 94.3 per- proceeds dropped 24 percent from as well as established destinations like peers, and The Magic City’s recovery cent in January, according to Yardi data, 2019, the decrease was largely attrib- Austin, Nashville and Salt Lake City. has been stronger than most. Payroll an increase of 43 basis points from pre- utable to a pause in the trading action Birmingham is a name absent from employment declined about 40 per- pandemic levels, reflecting absorption due to COVID as investors found their most top 10 lists, but investors that cent less than the national average last of more than 800 vacant units since footing. ignore this market overlook an under- spring, and 66 percent of metro jobs March 2020 in a 53,000-unit survey Indeed, sales of workforce housing appreciated gem. Recent performance lost in April and May were recovered sample. Class A properties, which have and value-add situations reached a been under pressure in many markets, new market high of $329 million last OFFICE from page 14 participated in the rally, rising 58 basis year. Buyers were drawn to renovated points in the same period to 93.4 per- properties in the Homewood, Hoover The challenging occupancy in Shelby of a “brick-and-beam” office. This cent on net absorption of about 315 and Northeast submarkets, which of- County is a continued result of sev- creative space has gained popular- units. fer space at rents in the $675 to $800 eral sizeable moveouts and corpo- ity as the desirable environment for Rent growth was equally impressive. per month range and are accessible to rate relocations, including BlueCross employers seeking to hire millenni- Stabilized property rent increased se- service industry and manufacturing BlueShield vacating 150,000 square als, attracting many businesses to the quentially in every month of the pan- workers. feet in 2019 and Southern Co.’s 2018 downtown area. demic except June and November, ris- relocation from 450,000 square feet in However, this trend has also nega- ing by a unit-weighted average of 4.8 Market outlook is favorable Inverness Office Park (Shelby Coun- tively impacted vacancy rates of tra- percent over the 12 months that ended Although the outlines of the nation’s ty) to 670,000 square feet in Colon- ditional multi-tenant buildings in the in February. Class A and B were at the recovery from the pandemic reces- nade Office Park (Jefferson County). CBD. As the number of desirable op- tip of the spear, advancing on respec- sion are only beginning to take shape, Submarket-wide, over 1 million tions that are suitable for office reha- tive 4.9 percent and 5.2 percent annual the prospects for Birmingham appear square feet of office space remains bilitation have been absorbed, we ex- rates. bright. The city’s core healthcare in- available, providing opportunities pect to see an increase in the positive Suburban areas south of the core re- dustry, manufacturing and logistics for corporate users seeking large foot- absorption of multi-tenant buildings corded constructive income growth — strengths and rising digital start-up prints. over the next three to five years. especially Hoover South and Meadow- scene are ideally positioned to prosper. On a positive note, the CBD contin- brook — which racked up well above Metro employment and personal in- ues to experience healthy growth and Next steps for Birmingham average gross rent revenue growth comes may grow at rates not seen since revitalization with numerous restau- In conclusion, overall market fun- over the year. the 1990s. rant openings, significant mixed-use damentals remain stable in Birming- The Birmingham labor market is al- and residential development, and ham’s office market. As 2021 pro- Moderate supply ready tight (at 3.5 percent in December, the redevelopment of several historic gresses, Birmingham’s greatest need Market performance benefited from the metro unemployment rate is 50 and buildings. Much of this revitalization will be to retain our existing talent moderate supply levels during the last 300 basis points below the respective has occurred over the last decade as and support the success of existing three years, when developers complet- Alabama and U.S. averages). A boom- a result of Alabama’s Historic Reha- businesses, which in turn will create ed fewer than 1,800 metro units, about ing economy will compel local employ- bilitation Tax Credit programs, which new opportunities for recruiting new 3.5 percent of existing inventory. But ers to cast a wide net to meet staffing the Alabama Historical Commission industry. this gentle southern zephyr promises needs, drawing currently discouraged has exercised stewardship over since Despite the ongoing pandemic, eco- to change directions to a gusting head- workers back into the labor market and the program’s inception in 2013. The nomic development activity in Bir- wind in 2021. Nearly 2,000 units are encouraging in-migration from outside program, which is currently up for an mingham’s seven-county region in scheduled for delivery this year, and the metro area. additional five-year renewal through 2020 saw more than $518 million in more than half of these will be concen- The implications for household for- 2027, has had an annual allocation of capital investment from announced trated in Central and East Birmingham mation are constructive and demand $20 million, stimulating significant projects and over 1,200 new jobs. As submarkets where occupancy levels al- for rental space will rise accordingly, investment in historic preservation. Alabama’s and Birmingham’s eco- ready fall below the metro average. Yes, especially in the workforce housing The program has been a welcome nomic climate continues to strength- those beautiful renderings we’ve seen segment. Although many uncertain- concept to office users seeking an ur- en, Birmingham’s office market is in the Parkside District have shifted to ties remain, the elements for continu- ban location, especially those build- poised to resume steady growth real-life cranes, and now, leasing cen- ing real rent growth and significant real ings that feature the cool elements throughout 2021. ters and model units. estate value creation are in place and While urban neighborhoods may should remain so through 2022. 16 • March 2021 • Southeast Real Estate Business www.REBusinessOnline.com SUBSCRIBE TODAY

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ADVERTISING EDITORIAL Scott France Ryan Nixon Lynn Peisner President/Co-Publisher Associate Publisher Editor 404.832.8262 x 108 404.832.8262 404.832.8262 [email protected] [email protected] [email protected]

France Media Inc. (www.francemediainc.com) is the largest commercial real estate publisher of print and digital magazines in the U.S. The company publishes Student Housing Business, Seniors Housing Business, Southeast Real Estate Business, Heartland Real Estate Business, Northeast Real Estate Business, Texas Real Estate Business, Western Real Estate Business, Shopping Center Business, California Centers, Ancillary Retail, and Retail & Restaurant Facility Business, as well as REBusinessOnline.com. OFFICE SNAPSHOT: CHARLOTTE CHARLOTTE’S OFFICE MARKET WELL-POISED FOR THE FUTURE AS NEW PROJECTS COME ON LINE fice space. Third & Urban spent $16 Parker Levy million on a three-property office re- Associate of Office development project known as Lower Services, Tuck, which will total around 188,000 Colliers International square feet of office space. However, South End remains the primary hotspot for office development in Charlotte. With companies pouring out of the CBD, South End is in a great position to snatch With the end of the first quarter of up many office tenants. Spectrum’s 2021 approaching, confidence in the Vantage development, a two-tower, Charlotte office market is on the rise, 613,000-square-foot project will be albeit slowly. As distribution ramps home to the new LendingTree head- up for COVID-19 vaccines and schools quarters and Grant Thornton’s new start to reopen, companies are much office. Tech manufacturer Honeywell is awaiting move-in at Legacy Union, an upcoming more optimistic about returning to the Cousins Properties purchased ex- mixed-use development in Uptown Charlotte that Lincoln Harris is developing. office than they were six months ago. isting buildings at 242 and 306 West The amount of new office devel- Tremont, as well as an industrial opments underway combined with building at 305 Doggett St. and land at FreeMoreWest is the fact that they are office space as opposed to trying to landlords holding fast to asking rates 200 E. Bland St. for a combined price of both minutes from Uptown Charlotte. shed it. Currently there is over 2 mil- shows that many investors remain $46.9 million. The Atlanta-based REIT lion square feet of sublease space on confident in the future of office space. plans on a building a 700,000-square- Looking to the future the market in the Charlotte MSA, more Although the pandemic is far from foot mixed-use development at 200 E. Companies across the board have than 600,000 square feet of which is in over, Charlotte is poised to come back Bland, but it has not disclosed plans been reducing their office footprints the CBD. It is worth noting that this stronger than other markets as com- for the other sites. as they try to decipher to future of of- number is inflated as companies like panies look to take advantage of the A few other projects of note are Bea- fice space. With some companies go- Lowe’s, Honeywell and Truist Finan- city’s low cost of living and increasing con Partners’ 148,000-square-foot of- ing fully remote and other doing a cial Corp. put up their swing space for talent pool. fice building called The Square, which mix of in-office and remote work, it sublease in preparation to move into has just delivered, and Lowe’s Cos.’ remains to be seen how tenants plan each of their respective headquarter Hot submarkets new 375,000-square-foot headquar- to utilize their office space. buildings. Activity in the Charlotte central ters, which is being developed by Grant Thornton reduced its office Even with the amount of sublease business district (CBD) has been ex- RAM and Childress Klein and is near- square footage by 44 percent from space on the market, office landlords tremely quiet as firms look to move to ing completion. 56,000 to 31,600 square feet. The ratio- have not lowered their asking rates, suburban markets. The exodus from The driving factor for the explosion nale behind smaller office footprints is and in some cases they have even the CBD has led to slew of office de- of development in South End and that it is much easier to acquire more raised them. To justify higher rents, velopments in submarkets. Devel- landlords have offered more conces- opers Portman Holdings and Third sions than normal in the form of free & Urban have invested heavily on rent and tenant improvement packag- mixed-use office projects in the Free- Activity in the Charlotte central business es. Some landlords have even experi- MoreWest area. mented with offering fully furnished Portman spent a total of $19.5 mil- district has been extremely quiet as firms suites to reduce the amount of time lion on an office redevelopment it takes for an office tenant to move known as Savona Mill, which will look to move to suburban markets. in. Office investment slowed signifi- total around 200,000 square feet of of- cantly during the beginning of the pandemic, but in the past few months investors seem to be picking up where they left off pre-pandemic. ® In the first quarter, the Korean real Redi-Dock Provides Instant estate investment fund Hana Alter- native Asset Management purchased Drive-In Access to Your Facility 300 South Brevard from Stream Re- • Modular alty Partners for $201 million, or $568 per square foot. In the fourth quarter • Minimal site prep of 2020, Cousins purchased Railyard, Beacon’s 326,523-square-foot, two- • Low maintenance tower development in South End, for • Delivered & set $201 million ($615 per square foot). The firm spent a combined $247.9 mil- • Easily relocated lion in the fourth quarter on proper- • Lengths to 50’ ties in South End, including Railyard. It remains to be seen when large • Infinite widths office occupiers plan to return to the office. Some companies have pushed • Heavy duty rating remote work out as far as the fall of • No future demolition 2021. The future of office is uncertain but only in terms of how offices will • ADA ramps available be utilized. Companies will still need space to collaborate, and younger em- Call: 800-724-4881 ployees will still need to social aspect www.ReadingPrecast.com of working in an office. However, of- [email protected] Call for an immediate consultation. fice space is certainly going to change as we get used to the “new normal.” 18 • March 2021 • Southeast Real Estate Business www.REBusinessOnline.com UNWELCOME PROPERTY TAX SURPRISES IN D.C. Insights into managing real property tax liabilities in the nation’s capital. By Sydney Bardouil, Esq. of Wilkes Artis fter the tumult and disruptions designation. Penalties and interest can cause a of 2020, the last thing taxpayers Sydney If a credit appears on the account, it headache for taxpayers. The District Aneed is another surprise. Our Bardouil will likely stem from a prior overpay- will apply any future payment to pen- society craves predictability more than Associate, ment. This may refl ect a reduction in alties and interest before the account’s ever before, and commercial real estate Wilkes Artis tax liability that occurred after a bill principal balance. Therefore, it is easy owners want predictability in their was issued. Other possible causes in- for a small charge to cause a cascading property taxes. clude a DC Superior Court Refund Or- liability if it is not timely addressed. In the District of Columbia, commer- der, a dual payment from a third-party In addition, while a taxpayer may pe- cial real estate owners keen to make vendor or a prepayment of the full- tition for these charges to be waived, their future expenses more predictable year tax liability on a fi rst-half tax bill. this process is often lengthy and the is- can start by familiarizing themselves an individual district may base its tax Before enjoying the benefi t of the suance of such a waiver is at the sole with the full gamut of real property lia- on the number of rooms in a hotel, a lowered tax liability, it is important to discretion of the OTR. bilities. In addition to the standard an- building’s square footage and a per- verify this credit is justifi ed. If the cred- The prospect of navigating these nual property tax, the District imposes centage of the tax assessment value. it was wrongfully applied, a taxpayer charges may seem overwhelming but a variety of charges on real estate that Thankfully, these organizations often will still be liable for the remaining bal- it is a vital part of owning and manag- vary by the property’s location, use have robust, informative websites that ance. The District may issue a correct- ing real estate in the District. There- and payment history. can be useful resources for property ed bill for the outstanding amount, or fore, it is best to learn the tax rules or Managing these real estate charges owners. the balance may appear on a future tax consult with a local tax attorney who can help a taxpayer budget for upcom- As with real property taxes, a prop- bill. A failure to remedy this balance has experience dealing with these is- ing expenses and minimize the risk erty owner that fails to pay its BID tax can once again lead to penalty and in- sues, as well as with the corresponding of incurring unplanned costs. What on time and in full can incur penalties terest charges. governmental entities. A knowledge- follows is a primer to help taxpayers and interest charges on its tax account. able expert can sort through this com- manage real property tax liabilities in Therefore, mismanaging a property’s Penalties and interest plicated web of liabilities, penalties the District: BID tax can lead to pricey consequenc- The most unwanted surprise charges and errors. es. are penalties and interest. These charg- Start with the basics es can arise under several circumstanc- Sydney Bardouil is an associate at the law fi rm, The DC Offi ce of Tax and Reve- Public space or vault rent es such as when the taxpayer has failed Wilkes Artis, the District of Columbia member nue (OTR) recently launched MyTax. To optimize the operation of an as- to fi le a yearly income and expense of American Property Tax Counsel, the national DC.gov, a new taxpayer website in- set, many property owners rent-adja- form with the District, or after missed, affi liation of property tax attorneys. She can be tended to streamline the tax assess- cent, District-owned space known as late or incomplete payments. reached at [email protected]. ment and billing processes. This single “public space.” The District catego- portal offers insight into taxes on in- rizes these offerings as either “vault dividual income, businesses and real space,” which is below ground level; property, as well as fees administered or above-ground “café space.” Exam- Architectural dog park products by OTR. ples include outdoor café space, above The site features self-service tools or below-grade parking and areas for that enable taxpayers to review and storage of utilities. pay property tax bills online, view The formula for calculating vault assessment histories, apply for tax re- rent is Land Rate x Vault Area x Vault lief benefi ts, request mailing address Rate. Therefore, changes in a proper- changes and submit mixed-use decla- ty’s taxable land assessment value will rations, among other features. While result in a change in the rental charge this centralized system should help for associated public space. Unlike BID to organize the billing and payment taxes, public-space rent is charged to processes, it offers little information the renter as a separate bill. This re- about the District’s fees and may leave quires extra attention to avoid those owners still wondering: What are these pesky penalty and interest charges. charges? Special assessments The BID tax A variety of supplementary spe- WATER FOUNTAINS FUN AGILITY Many commercial property own- cial assessments may arise to fund ers in the District incur a business im- city-wide projects. Examples of these provement district (BID) tax. The Dis- charges include a ballpark fee, South- trict defi nes a business improvement east Water and Sewer Improvement district as “a self-taxing district estab- fee and the New York Avenue fee. The lished by property owners to enhance levy of these assessments is governed the economic vitality of a specifi c com- by specifi c criteria set forth in the re- mercial area.” Each of the District’s lated DC Code provision. 11 BIDs assess a surcharge to the real Given the often-complex nature of property tax liability, which the Dis- the code, taxpayers may choose to con- trict collects and then returns to the sult a tax or legal professional to help BID. Each BID dictates how it spends navigate these less-common levies. its funds, typically supporting the community with programs promoting Credits cleanliness, maintenance, safety and A credit on a property owner’s tax economic development. account will likely come as a welcomed PLAY EQUIPMENT WASTE STATIONS The DC Code establishes BIDs and surprise, but the taxpayer should give their geographic boundaries. These these circumstances the same scrutiny GymsForDogs.com provisions empower each BID to estab- they would give to unexpected charg- [email protected] lish its tax rates. How those taxes are es. Understand that a credit is not free 800-931-1562 calculated varies by BID. For example, money, nor is it always an accurate www.REBusinessOnline.com Southeast Real Estate Business • March 2021 • 19 POSITIVE OUTLOOK FOR CAROLINAS RETAIL SECTOR CAROLINAS from page 1 an attractive region for a multitude Carolina. Current tenants include ABC of reasons. Garret Bedrin, a partner at Store, Big Lots, Charlie’s Tobacco Out- the Bedrin Organization in Glen Rock, let, Diana Nails, Tokyo Express, GNC New Jersey, says that one reason that and Tuesday Morning. Bedrin men- the Carolinas are so sought after is that tioned that there’s been an interest in it is less expensive to do business there wellness and food-based tenants in the than in other markets. center. “A lot of new capital is looking in Adam Schwegman, partner and se- North Carolina for the first time as a nior vice president of leasing at North real business-friendly state and easy to American Properties (NAP) in Atlanta, do business,” says Bedrin. “And some has been spearheading leasing for his of these developers or owners are con- firm’s 52-acre Birkdale Village project cerned about maybe capital gains tax is in the Charlotte suburb of Huntersville. changing or other taxes changing, and NAP entered into a joint venture with they want to get out of expensive states Chicago-based Nuveen in November like California or New York.” 2020 to reposition the property. Generally speaking, the Carolinas “Birkdale was thriving pre-pan- and the Southeast overall saw fewer re- demic, was very resilient during the strictions due to COVID-19 than other pandemic and will come out at the Fenton is a mixed-use development underway in Cary, North Carolina. The property's areas of the United States. In fact, South other side even stronger. But not many retail tenant roster includes Arhaus, Bailey’s Fine Jewelry, Free People and Sephora. Carolina was one of the first states to mixed-use centers of this size, even reopen non-essential retailers in April transacted during COVID-19, but we 2020. Pierce Mayson, managing princi- were very confident in its long-term dependent on one or two industries or opments, Specialty Shops SouthPark pal of SRS Real Estate Partners’ Invest- prospects,” says Schwegman. companies. It’s taken its lumps with in Charlotte, has a yoga concept called ment Properties Group in Atlanta, says Birkdale Village has over 60 retail some of these big companies leaving, Thrive. Hill is allowing Thrive to use the Carolinas’ retail sector performed tenants, as well as dining and enter- but it just keeps on kicking and people an outdoor space to be more COVID-19 well despite the pandemic. tainment destinations and a movie just love the arts and culture of a small friendly. Businesses like fitness facili- “The Carolinas continue to be in pret- theater. NAP plans to revamp the retail city.” ties are looking to provide customer ty high demand from a retail perspec- experience at Birkdale Village this year, safety while still generating revenue. tive, and that’s because they had good introducing smaller-format stores, jew- Operational shift “As we emerge from the pandemic, momentum before COVID-19,” says el boxes, pop-up shops and new restau- Many retail categories had to pivot and more and more people are be- Mayson. rants for the community. to gain sales in 2020, and landlords and ing vaccinated, we are realizing there Additionally, Mayson attributed the Suburban assets like Birkdale Village brokers still see the impacts of the pan- is significant pent-up consumer de- shift to the Carolinas to the way the are proving valuable to investors and demic in 2021 when looking at retail mand” says Spratt. “People are yearn- states handled the pandemic closures. developers as many people are moving operations. Restaurants turned to take- ing to leave the home and immerse “Investors just don’t have a lot of away from the city to the suburbs. With out options and delivery, and fitness themselves back into the community to faith in their local and regional gov- remote working, there is not as much of facilities moved more to outdoor set- shop, dine and go to the theaters that ernments with what happened with a need for people to live in the heavily tings. Additionally, mixed-use centers they were unable to enjoy for this past COVID-19. And they see the Southeast populated cities where their jobs may turned to a more open-air layout. year, especially during the lockdown. continuing to be open and retail to be be located, plus suburban homes and Jack Halpern, chairman and CEO of These specialty fitness uses will bounce as successful as they can be with these apartments offer more space for those Atlanta-based Halpern Enterprises, back since there is only so much you conditions,” he says. who plan to work from their home. says the restaurant categories that did can do at home on Zoom, Teams or Overall vacancy rates have increased well during COVID-19 are now in ex- Facebook Live.” Developments in the works in urban retail submarkets, according pansion mode. Many firms were still eager to start to Patrick Nealon, a brokerage associ- “Surprisingly, restaurants all took a Grocery remains king projects last year in the Carolinas de- ate at Colliers International in Charles- hit during the pandemic, but are con- After months of toilet paper short- spite the global pandemic. Lance Byars, ton, though he expects absorption to tinuing to expand, particularly those ages, it may come as no surprise that a senior brokerage associate at Colliers pick back up this year. that do well with take-out such as piz- grocery stores in the Carolinas have International in Greenville cited two “We saw a slight rise in urban vacan- za, sandwich shops and some Mexican also done well, and they’ve attracted different projects in his home market. cy during 2020 but the suburbs stayed restaurants as well,” says Halpern. investors looking for a safe haven. Currently under construction is Can- very stable. We are now seeing a lot of Restaurant tenants are also more in- Broad Reach Retail Partners recently vas, which will be a mixed-use de- activity in our core urban areas and ex- terested in drive-thrus because of the acquired Avent Ferry Shopping Cen- velopment on the edge of downtown pect the vacancy rate to be back to pre- ability to do business with minimal ter, a 119,652-square-foot Food Lion- Greenville offering retail, offices and pandemic numbers before the end of person-to-person contact. Byars ex- anchored center in Raleigh. residential space. The development the year,” says Nealon. plained the demand for drive-thrus is Mayson says that his SRS team al- includes the Canvas Tower, which has Developers and investors are no nothing new, though it has increased ways has demand from buyers for office space with onsite parking. The longer just interested in the two larg- the past 12 months. shopping centers in the Carolinas, es- Beach Co. is the developer of Canvas, est markets of the Carolinas — Char- “Due to convenience, this was really pecially grocery-anchored properties. which will also have 21,805 square feet lotte and Raleigh. In addition to mar- happening pre-pandemic, but COV- His team recently placed a Food Lion- of ground-floor retail space, as well as kets like Greenville, Charleston and ID-19 has accelerated that trend,” says anchored center in Greensboro under apartments called Canvas Lofts. Byars Greensboro, shopping center owners Byars. “It’s not simply the traditional contract. The center had seen its sales also points to the Bridgeway Station are looking at other mid-size markets. fast food users that are looking, but improve by 31 percent year-over-year project in Mauldin, which he says will Bedrin mentioned that his firm wants groups like Chipotle and Panera are during the pandemic. Interest in the be the first town center in the Upstate to be more involved in downtown now searching for the same type of real center was very strong. area of South Carolina. The property, Winston-Salem, which has seen a lot of estate with a demand for drive-thrus.” “We’ve signed over 200 confidenti- developed by Hughes Investments, reinvestment, including the mixed-use As more of the populations gets vac- ality agreements, which is a really big will include at least 1 million square Innovation Quarter, which was devel- cinated, there is a natural drive for peo- number,” says Mayson. feet of new apartments, office, shop- oped from older buildings in a public- ple to want to work out in fitness facili- Don McMinn and Zachary Taylor, ping, dining, entertainment and lodg- private partnership and incorporates ties again. Robert Spratt, president and the founders and principals of the Tay- ing. The estimated cost of the develop- educational and research uses. majority shareholder at Hill Partners in lor McMinn Retail Group at Marcus & ment is $100 million. “We just feel that it’s a real under- Charlotte, says that his firm has been Millichap in Atlanta, also have a lot of Bedrin’s firm is developing Battle- appreciated asset,” says Bedrin. “It’s highly active in leasing to specialty fit- interest in properties they market in the ground Plaza in Greensboro, North a downtown that is no longer super ness users. One of Hill Partners’ devel- Carolinas. Over the past 12 months, the 20 • March 2021 • Southeast Real Estate Business www.REBusinessOnline.com Taylor McMinn team has sold 10 prop- “Where we’ve seen the most change Jewelry, Free People and Sephora. The strong to begin with,” says McGuire. erties in the Carolinas totaling over $60 is with local boutiques who were very property is managed by Hines and is “They just were not going to be strong million, including a Publix-anchored weak with their online platforms going scheduled for completion in spring and they probably would not have center in South Carolina. into the pandemic. They were forced 2022. made it even in an uninterrupted retail “Attractive fi nancing and a lack of to pivot and really rebuff that online Susan McGuire, partner and retail world.” supply has caused cap rates to com- presence and the better ones were able platform leader and broker Foundry Not everyone felt defeated by the press to better than pre-COVID-19 lev- to do that and now are healthier than Commercial in Charlotte, says that pandemic. McMinn of Taylor Mc- els for many shopping centers,” says before.” those retailers who were sinking at the Minn Retail Group stated that his team Taylor. Zuckerman’s team is leading the beginning of 2020 had an even more strived to keep going and rise above Taylor McMinn is marketing a Pub- charge in leasing Fenton. Some of the uphill climb with the pandemic-in- the struggles brought on by COVID-19. lix-anchored center in Simpsonville, committed restaurants include Col- duced restrictions. “We chose to see this pandemic as South Carolina, at a cap rate that is letta, Crawford Brothers’ Steakhouse, “The majority of the vacancy that has an opportunity instead of an adversity lower than the seller’s pre-pandemic CRU Food & Wine Bar and Dram & come back during COVID-19 has been and doubled down on improving our pro-forma. Draught. The retail tenant rosters in- from tenants that were already strug- business and servicing our clients,” “Buyers are migrating to centers that clude Arhaus Furniture, Bailey’s Fine gling pre-COVID-19 — they weren’t says McMinn. n have essential anchors like grocery, discount or home improvement with consistent rent payments despite the pandemic disruptions,” says Taylor. Discount-oriented retailers also remain popular with shoppers and investors. Recently, Dollar Tree introduced a Trez Capital: new store concept called “Popshelf,” which sells seasonal products, home A Powerhouse décor, beauty products, cleaning sup- plies and party goods that are all priced in Commercial at $5 or less. “Interestingly, we did one of the fi rst Real Estate deals in North Carolina with Popshelf,” says Christy David, chief operating of- Lending fi cer of shopping center REIT Inven- Trust Properties. “It will open in April trezcapital.com at Sycamore Commons in Matthews, North Carolina.” Enclosed shopping malls continue to struggle to fi nd their footing. Recently Epic Games, the creator of popular online video game “Fortnite,” made news Capital is a commodity, but trusted service and consistent excellence are not. when it purchased Cary Towne Center, Flexibility, speed, innovation and a hands-on nimble approach distinguish the OUR LENDING CRITERIA a regional shopping mall in the Raleigh Trez experience. We go beyond the transaction and invest the time to deliver suburb of Cary. The struggling mall exceptional results and build longstanding relationships. LENDING AREA: will be redeveloped to become Epic’s U.S. & CANADA Trez Capital is a trusted provider of private commercial real estate financing new corporate headquarters. solutions in the U.S. and Canada. With over $4.1 billion in AUM, wehave On the other side of the fence, open- MIN/MAX LOAN AMOUNT: funded more than 1,500 transactions in excess of $12 billion since the firm’s UP TO $100M air centers have fared relatively well inception in 1997. the past 12 months. Spratt mentioned TERM: how his fi rm’s retail centers held up UP TO 3 YEARS better than expected because of the open-air layout being more attractive AMORTIZATION: to shoppers during the pandemic. INTEREST ONLY “We never really closed our centers down given the restaurants pivoted to RATE: FLOATING OVER WSJP curbside delivery and some other uses (VARIES BASED ON LOAN TYPE) could stay open,” says Spratt. “Our open-air, mixed-use centers have navi- GREENVILLE, SOUTH CAROLINA WALTON, KENTUCKY LOAN TO COST: gated the pandemic very well.” $115,000,000 – Mixed-Use $38,810,630 – Industrial UP TO 80% LTC

A year in review ASSET TYPE: Over the past 12 months, a lot has RESIDENTIAL, MULTI-FAMILY, changed for the retail sector. Most of INDUSTRIAL, OFFICE, all, retailers have again learned the MIXED-USE, RETAIL – INCLUDING CONSTRUCTION importance of being ﬂ exible and reac- tive to survive. With online shopping LOAN TYPE: becoming more of a driving force, re- BRIDGE, TERM, tailers understood more than ever the CONSTRUCTION, need for a strong online presence. Dot- LAKE WORTH BEACH, FLORIDA NORCROSS, GEORGIA INVENTORY, LAND an Zuckerman, director of leasing at $35,147,555 – Residential $8,292,891 – Residential LOT DEVELOPMENT, Columbia Development, the co-devel- MEZZANINE, AND PREFERRED EQUITY oper of Fenton in Cary, North Carolina, Brett Forman says that retailers that were adaptable Executive Managing Director, Eastern U.S. SECURITY: and established an online presence per- Office: 561.588.0132 x1018 1ST OR 2ND MORTGAGE, formed better than those that do not Mobile: 917.783.0709 [email protected] NON-RECOURSE AVAILABLE have a strong online presence.

“The retailers that had a really robust VANCOUVER TORONTO MONTREAL DALLAS PALM BEACH ATLANTA NEW YORK and user-friendly online presence were the clear winners,” says Zuckerman. www.REBusinessOnline.com Southeast Real Estate Business • March 2021 • 21 INDUSTRIAL IS IN A CLASS OF ITS OWN INDUSTRIAL from page 1 pricing up for new acquisitions. Ac- tor and director of industrial services day is deeper than it has ever been as enced a slowdown in investment sales cording to data from CommercialEdge, at CBRE | Triad in North Carolina, investors are creeping in from other volume. Real Capital Analytics (RCA) part of the Yardi Systems network of says that the growth of e-commerce property types and are chasing the reported that industrial sales totaled research platforms, the average sales and on-shoring and near-shoring from emerging life sciences subcategory, $98.8 billion in 2020, a 16 percent de- price for the first two months of 2021 manufacturers should combine to which is marked by research and de- cline from 2019. The February 2021 is $112 per square foot, a 10 percent in- keep investment demand strong for velopment space in clusters such as sales volume didn’t much better as crease from fourth-quarter 2020. the foreseeable future. Additionally, Raleigh-Durham, Atlanta and Tampa. RCA reported a 69 percent drop com- “Pricing is up and cap rates are com- he notes the Southeast’s tax- and busi- “The buyer pool for industrial is pared to February 2020. pressing based on the credit of the ten- ness-friendly environment is an added much more broad,” says Foster. “It’s However, the research firm points ant and the rent generated,” says Gar- bonus for investors. international and it’s traditional buy- out that the data may be skewed be- cia-Menocal. “The Southeast is viewed as a desir- ers and owners of other product types cause February 2020 marked the clos- The uptick in pricing is ubiquitous as able part of the country for people to that are shifting resources and equity ing of the $13 billion acquisition of industrial real estate is seen as an inves- invest in because of the region’s popu- to purchase industrial. If you’re a fund Liberty Property Trust by industrial tor darling, almost regardless of loca- lation growth and business-friendly operator or you have a separate ac- giant Prologis. tion. Foster says that one phenomenon markets,” says Schenck. “The South- count, your investors are charging you While no transaction comes close to he’s noticed is that traditional second- east is benefitting from the overall in- with a desire to put more money into that mega deal, portfolios remain the ary markets are now pricing similarly terest for industrial investments and it the industrial space to the detriment of most noteworthy transactional meth- to industrial’s gateway markets such as gets the added benefit that people want office, retail and hotel investing.” od for industrial assets in the South- the Inland Empire, Lehigh Valley and to live here.” Foster says that he’s noticed a rise in east region. Recent deals include an Chicagoland. Rental rates are also peaking for the passive investors that are interested in undisclosed consortium of institution- “The pandemic has taught us that we U.S. industrial sector. CommercialEdge owning industrial real estate but are al investors buying Birmingham, Ala- can go to different markets and achieve reports that average industrial rents are backing other firms that have more bama-based Growth Capital Partners’ what we need to from a logistics and $6.47 per square foot in February 2021, familiarity with the product type. One 11.6 million-square-foot portfolio for warehousing standpoint in a market a 5.1 percent increase over the past 12 prominent example is EQT AB, a pri- $800 million; Global investment firm with cheaper labor costs,” says Foster. months. With net operating income vate equity firm based in Stockholm, KKR buying an Atlanta-area portfolio “There used to be top five distribution and pricing trending up, one of the few purchasing Pennsylvania-based Ex- for $136 million; and Preylock Hold- markets in the country, but that needs challenges facing the investment com- eter Property Group, a prolific devel- ings, a private equity firm based in Los to be expanded to 20. We are seeing munity is getting sellers to the negotiat- oper and investor of industrial parks Angeles, buying Core5 Industrial Part- pricing in markets six through 15 that’s ing table. around the country. ners’ three-property portfolio in Mem- comparable to some of the top five “We are going to have more invest- Garcia-Menocal says that the buyer phis and Atlanta for $166.7 million. markets.” ment sales in 2021 if we can get sellers pool for Miami’s industrial facilities “Buyers are looking for portfolios to Sim Doughtie, president of Atlanta- to sell, that’s the challenge,” says Cody are mostly institutional investors and buy, but there are very few and far be- based King Industrial Realty Inc./COR- Cress, vice president and commer- private funds, and there’s a higher bar- tween that sellers are willing to sell,” FAC International, says that developers cial real estate advisor for The Cress rier to entry to clear for properties ex- says Cress. are building ahead of the investment Group/Coldwell Banker Commercial ceeding 100,000 square feet. Foster says that with the industrial demand and are also future proofing Sun Coast Partners LLC. “Owners are “Every buyer seems to have an abun- sector experiencing a capital infusion their projects to be desirable for these having a hard time because they don’t dance of cash and they’re looking to of investor interest, there’s an urgency buyers, as some developments are be- know what to do with their money — place it in Miami, which makes sense for investors to deploy larger amounts ing purchased ahead of completion. stock market, bank, real estate, etc. It’s because industrial land and buildings of capital. “Sometimes the only way to “Developers are building these hard to find a better asset to buy than here are a sought-after commodity,” he do that is through portfolio transac- properties not just to meet the require- what they already have.” says. tions,” he says. ments of the tenants, but also the re- “We’re marketing a number of port- quirements of other investors,” says Deep buyer pool Thinking bigger folio deals right now, and it’s garner- Doughtie. Industrial brokers from around the Last year the U.S. industrial sector, ing a lot of attention.” Dodson Schenck, managing direc- Southeast note that the buyer pool to- like all real estate categories, experi- In addition to portfolios, investors are also upsizing their acquisition criteria in terms of total square footage. “From an investment standpoint, the sales are getting bigger,” says Doughtie about Atlanta’s industrial market. “In this past year, there were over 130 deals above 100,000 square feet — 25 of those were 500,000 square feet or above. We’ve never seen that before in Atlanta.” Garcia-Menocal also notes that RE- ITs and other investors have shown a willingness to go smaller than ever before on their acquisitions, especially for infill properties that are within urban districts or are near Miami Inter- national Airport or PortMiami. “Investors are targeting any building above 25,000 square feet, which is crazy because a couple years ago they were only looking in that 50,000- to 100,000-square-foot range,” says Garcia-Menocal. “It almost begs for smaller owners to buy below the 25,000- to 30,000-square-foot thresh- old these REITs have. The smaller stuff is healthy and active, there’s a lot of movement.” n 22 • March 2021 • Southeast Real Estate Business www.REBusinessOnline.com 13TH ANNUAL INTERFACE STUDENT HOUSING JULY 13-15 JW MARRIOTT AUSTIN

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www.REBusinessOnline.com January/February 2020 • Volume 16, Issue 1 www.REBusinessOnline.com May 2020 • Volume 17, Issue 9 www.REBusinessOnline.com February 2020 • Volume 15, Issue 12

MORTGAGE BANKERS SEE CONTINUED GROWTH WHERE WILL RETAIL BE MORTGAGE BANKERS FORECAST CONTINUED GROWTH Lower-than-expected interest rates and plentiful capital are expected to drive loan volume in 2020, but Lower-than-expected interest rates and plentiful capital are expected to drive loan volume in 2020, behind the optimism is some wariness. WHEN ALL THIS ENDS? but behind the optimism is some wariness. By Joe Gose That’s the question on everyone’s mind as By Joe Gose discussion turns to easing shelter-in-place he commercial real estate mort- basis points lower than it was near the gage banking environment in end of 2018. he commercial real estate mort- stant, however, is the vast amount of restrictions. Tearly 2020 is nothing like it was a One variable that has remained con- gage banking environment in commercial real estate liquidity avail- By Nellie Day year ago. The major stock market indi- stant, however, is the vast amount of Tearly 2020 is nothing like it was able to borrowers. Mortgage bankers ces opened the new year by hitting re- commercial real estate liquidity avail- a year ago. The major stock market in- are expected to originate $683 billion cord highs after climbing more than 20 able to borrowers. Mortgage bankers dices opened the new year by hitting in commercial property and multi- OVID-19 is the disruptor no one Per usual, there is always change and saw coming. But it’s here, and evolution occurring, which will con- percent in 2019. That’s a dramatic turn- are expected to originate $683 billion record highs after climbing more than family loans in 2020, according to the around from 12 months earlier when a in commercial property and multi- 20 percent in 2019. That’s a dramatic Mortgage Bankers Association (MBA) Cit’s having a tangible impact on tinue in retail. Retail will continue to retail real estate, which was already be a viable part of our economy. It fourth-quarter selloff had set the mar- family loans in 2020, according to the turnaround from 12 months earlier based in Washington, D.C. If that fig- ket back more than 15 percent. Mortgage Bankers Association (MBA) when a fourth-quarter selloff had set ure is realized, it would represent a 9 in the midst of tackling existing dis- is guaranteed that this industry will Photo courtesy of Sonnenblick-Eichner ruptors like ecommerce. Stores and constantly adapt to coincide with the Last fall Sonnenblick-Eichner Co. arranged $13.7 million in refinance and construction The 10-year Treasury yield, a bench- based in Washington, D.C. If that fig- back the market more than 15 percent. percent increase over MBA’s projec- mark for long-term financing in com- ure is realized, it would represent a 9 The 10-year Treasury yield, a tion of $628 billion in loan volume in restaurants will eventually reopen, changes in consumer tastes, demo- financing for the L’Horizon Resort and Spa, a luxury resort in Palm Springs, California. but what that will look like — and graphic and spending. The loan replaces existing debt and will fund a 24-unit expansion. mercial real estate, has hovered around percent increase over MBA’s projection benchmark for long-term financing in 2019, also a record. 1.8 percent early this year, some 140 of $628 billion in loan volume in 2019, commercial real estate, has hovered MBA’s outlook even represents a who will survive — is still unknown. A five-lane arterial highway that runs through Lake Tahoe’s California-Nevada state Photo courtesy of Sonnenblick-Eichner Until then, WREB enlisted the help WREB: While no one can be prepared SEE MBA page 28 around 1.8 percent early this year, departure from its view a year ago, Last fall Sonnenblick-Eichner Co. arranged $13.7 million in refinance and construction line, is being redeveloped into a pedestrian, bike and transit-oriented Main Street. some 140 basis points lower than it acknowledges Jamie Woodwell, of eight experts to sort through the for such a sudden disaster, how do financing for the L’Horizon Resort and Spa, a luxury resort in Palm Springs, California. rubble and give us a sense of what the you feel your company has handled was near the end of 2018. MBA’s vice president for commer- The loan replaces existing debt and will fund a 24-unit expansion. MARGINS MODERATE FOR MULTIFAMILY DEVELOPERS One variable that has remained con- cial real estate research. Back then the West’s storefronts may look like once this pandemic and its fallout? all this is over. FIVE REDEVELOPMENT Rent growth in the metroplex is expected to remain between 2 to 3 percent, but developers continue see MORTGAGE BANKING, page 26 Sandy Sigal, president and CEO of to incur rising costs for amenities and operations. WREB: What has this pandemic NewMark Merrill Companies in taught you about retail, consumers Woodland Hills, Calif.: TRENDS SHAPING THE By Taylor Williams BREWERIES TAP and the economy? Well, this crisis went from zero to FUTURE OF THE WEST ultifamily developers in the below 7 percent in those two years, Don MacLellan, senior managing 60 in a weekend. A transformation is taking place out West that Dallas-Fort Worth (DFW) leading to an even more pronounced INTO LOCAL CULTURE director at Faris Lee in Irvine, Calif.: On a Friday, we had Mmetroplex in 2020 expect building boom. By offering fresh beer, food and event space, The biggest lesson no tenant requests emphasizes outdoor spaces, pedestrians and to see a slightly slower pace of rent Since then, annual rent growth has I have seen from for assistance. That density in many regions. growth brought on by record lev- maintained the current projection of these establishments have emerged as leaders this is to always be Monday, we had els of new supply in recent years. 2 to 3 percent, with gains in the Class of neighborhood lifestyle. prepared for the 50. It is hard to be By Becky Zimmermann and Stephanie Grigsby This trend, paired with higher costs B space outpacing those of Class A unknown. We have ready for that. You of adding features that distinguish product, a classification that captures By Alex Patton never experienced a Sigal can second guess hen people picture the West, 1. Main Street properties from their competition, virtually all new construction outside medical pandemic the escalated lock- they often see wide, open Redevelopment Spurs could lead to slightly more modest of purpose-built affordable housing. he modern craft beer brewery and small towns, alike. that has shut down downs in a very Wspaces, big skies and lots of Investment profit margins for multifamily devel- During the five-year period ending has emerged as a niche commu- Some of the largest and most popular our economy. As in unusual scenario, but it undoubtedly developable land. In reality, much of Vibrant streetscapes can create spir- opers. in 2019, nearly 110,000 new units Tnity anchor with flexible busi- craft breweries in the United States are MacLellan past disasters, so- saved lives and probably shortened the land that is best suited for devel- ited districts that are dynamic, social According to the latest data from were delivered in DFW, with annual ness models and loyal customer bases based in the Northeast, including the ciety was forced to the shutdown in the long run. opment was built on decades ago and places and economically successful. CoStar Group, the average rate of supply growth as a percentage of to- across the United States, particularly two largest: Pennsylvania-based D.G. address the issues For our perspective, I am very is ready for redevelopment. Redevel- However, cars and traffic flow have multifamily rent growth in DFW tal inventory topping 10 percent in in the Northeast. Combining elements Yuengling & Son Inc.; and Boston Beer and make the appropriate safeguards proud of our team’s response. We opment is essential for economic vital- been drivers of roadway design for between 2015 and 2019 was rough- some years. of retail, industrial and hospitality Co., the parent company of Samuel to avoid being caught off guard. were well equipped with a long his- ity, improving aesthetics and enhanc- decades, making the street a less de- ly 3.5 percent, skewed in part by a The new year purports to be the Hillwood completed Station House, a 301-unit community in Frisco, in 2018. The Image courtesy of Victory Brewing Co. metroplex continues to lead the nation in new apartment deliveries and absorption. models, craft breweries have quickly Adams. Vermont has the most brew- A key player in the revitalization of Philadelphia’s Center City district, Victory Brewing Our economy and businesses will tory of dialogue and trusting relation- ing the user experience. sirable place to be. The South Shore massive annual gain of 6.1 percent first since 2015 in which fewer than But supply additions and rising construction and operating costs associated with become one of the most dynamic and eries per capita in the United States Co.’s new brewpub will open at the Embassy Suites hotel later this year. come out of this much better pre- ships with our tenants. We also had Here are five key trends to watch for communities of Lake Tahoe are on in 2015 and 3.9 percent in 2016. The 20,000 new units will be added to the trendy business types in major cities with more than 66, according to the pared, as we have seen historically. technology that enabled us to track in 2020 that will shape the future for the cusp of a transformative project. citywide vacancy rate compressed supply, but then, the year is still very distinguishing product from the competition could cause margins to soften in 2020. see BREWERIES, page 29 They will see a strong recovery, even if customer movements and behav- the next generation: Working across California-Nevada SEE DEVELOPERS page 30 that takes an extended period of time. see RETAIL, page 36 see REDEVELOPMENT, page 38 INSIDE THIS ISSUE INSIDE THIS ISSUE INSIDE THIS ISSUE Boston’s Cambridge Neighborhood Mixed-use projects like Winrock Town Center How Are Specific Demographic Trends Remains Atop the Pack for Life in the Uptown submarket of Albuquerque Shaping Austin’s Growth Patterns? Sciences Development page 14 are working to create a large live-work-play experience. page 28 pages 14-16 Special Section: 2020 Lender Commercial Lenders Reveal Preferred Los Angeles Contemplating COVID-19 Impacts COVID-19, the Future of Special Section: 2020 Lenders Low Interest Rates Keep CMBS Insight Advertorials Asset Classes for 2020 Market Highlight on Real Estate Transactions Shopping & Industrial’s Insight Advertorials Defaults in Check pages 18-20 page 22 in the West Role In All Of It page 24 page 30 page 32 pages 19-23 page 27

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arc THE MAGAZINE FOR RETAIL & RESTAURANT MAINTENANCE, OPERATIONS & CONSTRUCTION

September 2019 Number 129 ® STUDENT HOUSING SOUTHEAST ANCILLARY RETAIL& BUSINESS AFFORDABLE HOUSING TM JULY/AUGUST 2019 RETAIL JANUARY/FEBRUARY 2021 BUSINESS • • • • RESTAURANT APRIL 2020 FACILITY BUSINESS® Upturn Ahead For LIHTC Market? The pandemic has put a spotlight on the need for more Road-Tested Retail affordable housing as demand outstrips supply Resale Fashion Tenants Following in the footsteps of the NEW DELIVERIES Give Apparel A Boost Healthy food truck trend, many retailers More beds, higher percentage of urban high-rise, smaller unit size in Brick-and-Mortar are taking their stores on the road Growth and changing amenities characterize fall openings Tropical Smoothie Cafe is on track to have 1,000 locations open by 2021.

PLUS: PLUS Plus: TODAY’S HOTTEST AMENITIES ATLANTA’S AMBITIOUS AFFORDABILITY PLAN 2020 EXPO PANEL RECAP  Hand Dryers & Restroom Maintenance LENDERS RECAP 2020, GAUGE MARKET  Repair Winter Roof Damage This Spring AUTOMATION AND ARTIFICIAL  How To Respond To Water Damage INTELLIGENCE IN STUDENT HOUSING CONDITIONS FOR 2021 NEW BRANDS LAUNCH AT AVENTURA MALL  Facilities Management For Luxury Retail Spaces  Make The Most Of High-Tech Property Management ON-CAMPUS DEVELOPMENT LEASING TEAMS RETOOL THEIR STRATEGIES LUXURY BRANDS PUSH THE BOUNDARIES  Choosing A New POS Should Not Be Transactional Pinnacle at Peacefield, Hollywood, Florida  How To Evaluate Janitorial Vendors STUDENT HOUSING INDUSTRY OF POP-UP RETAIL IN CHICAGO SALARY SURVEY

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