Auto, Aerospace Users Race to the Southeast Atlanta
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www.REBusinessOnline.com October 2018 • Volume 19, Issue 7 ATLANTA KNOWS ITS PLACE The city’s top retail projects are dense mixed-use destinations designed with placemaking in mind. By John Nelson he days of the “build it and they being built is reflecting that shift. will come” mentality for retail “The kind of centers that we're Tdevelopment are over, according building today are so different,” says to Atlanta’s most prolific retail and Fuqua. “In the old days we didn't mixed-use developers. build centers that were places, it was Jeff Fuqua, principal of Atlanta- difficult to execute. Now every project based Fuqua Development, says that has to be a place — suburban, urban North American Properties is hoping to duplicate the success of its Avalon project Atlanta has changed so much over the or otherwise.” with Revel, a $900 million mixed-use development underway in Duluth, Georgia. past few years, so naturally the retail see DEVELOPERS, page 37 INVESTORS STOCKING THEIR SHELVES IN ATLANTA Grocery-anchored shopping centers are the No. 1 retail investment category in the metro area. By John Nelson rocery stores remain the pre- 20 “recent significant sales” in its sec- there's always a demand for food,” cery-anchored deals offer the most se- mier retail category in the ond-quarter Atlanta retail market re- says Fred Victor, vice president of cure investment for well-capitalized Geyes of investors looking to port, nabbing the top four spots. retail investment services with Tran- buyers and are most resistant to fears purchase in the metro Atlanta area. “Grocery-anchored has continued swestern’s Atlanta office. “Grocers of online takeover.” Grocery-anchored shopping centers to be the most attractive retail seg- create exceptional traffic flows. Across dominated the list of CoStar Group’s ment and will continue to be since all classes of retail, high-quality gro- see INVESTORS, page 42 AUTO, AEROSPACE USERS RACE TO THE SOUTHEAST Infrastructure, existing supply chain lure advanced manufacturers to Alabama and South Carolina. By Camren Skelton he race to land automotive and “When companies are deciding aerospace users is on in the where to locate, what they’re really TSoutheast, and Alabama and doing is a risk analysis,” says Greg South Carolina are leading the pack. Canfield, Secretary of Commerce for Advanced manufacturing giants the State of Alabama. “It’s all about are chasing the states’ infrastructure, mitigating and minimizing risk.” Burton Property Group is underway on a $75 million facility in Mobile, Alabama, that will labor pools and established supply support engine and parts manufacturing for all Continental Motors Group product lines. chains, and their pace is not slowing. see MANUFACTURING, page 44 INSIDE THIS ISSUE Intersection of Industrial and Retail: More Distribution Centers, Less Stores pages 35-36 Atlanta Market New Orleans Keeps 300 Atlanta's Retail Centers Reflect Highlight Years of Growth Going Changing Consumer Preferences pages 26-30 page 32 page 42 ATLANTA KNOWS ITS PLACE DEVELOPERS from page 1 “You have to get people out of their homes and build a sense of commu- nity where people want to engage and shop,” adds Jeff Gar- rison, partner at S.J. Collins Enterprises, another local retail and mixed-use de- veloper. Developers deliv- ered approximately 2.9 million square feet of retail space in Jeff 2017, making it the Garrison most voluminous S.J. Collins year for retail deliv- Enterprises eries since the reces- sion, according to CoStar Group. In the past 12 months, 1.4 million square feet of retail space was delivered and 2.6 million square feet was absorbed, a healthy ratio for a metro Atlanta market that has histori- cally delivered more space than has Atlanta-based Selig Enterprises is helping establish Midtown's Upper Westside neighborhood with The Works, an 80-acre mixed-use been absorbed. development facing Chattahoochee Avenue. The project will reportedly cost $1 billion to develop. The teams behind this new wave of construction have a unique relation- ship with Atlanta because nearly all retail and restaurant space isn’t go- up a reputation over the past several cluding Monday Night Brewing, Red of the developers are based locally. ing away anytime soon, and not just years as a mecca for Atlanta’s res- Brick Brewing Co., Scofflaw Brewing, In addition to Fuqua Development in Atlanta. taurant scene, as well as for some of Urban Tree Cidery and Second Self and S.J. Collins, companies with retail “The only way a critical mass of the city’s most popular breweries, in- Beer Co. and mixed-use projects either under- retail is ever going to get built in this way or newly delivered in the metro country again is via retail-driven area include Selig Enterprises, Halp- mixed-use development,” says Wein- WWW.CROSSMANCO.COM ern Enterprises, Third & Urban, Paces ert. “That is really what the retail and Properties, New City Properties and development community seeks, along Braves Development Co. (BDC), an with today’s consumers.” affiliate of the Atlanta Braves and the Jack Halpern, chairman of Halpern master developer behind The Battery Enterprises, says the Atlanta in Cobb County. reason behind the The vast majority of retail space in mixed-use model is Atlanta’s development pipeline is lo- economical. As it’s cated in the northern intown submar- becoming more ex- kets and suburbs. According to Co- pensive to build, it’s Star, approximately 92 percent of the more conducive to retail space under construction sits build dense, vertical above Interstate 20, metro Atlanta’s projects that are in- unofficial equator. tegrated with other Meet with our team Atlanta’s newest crop of retail- uses. Jack during the ICSC Southeast heavy development is situated within “Developers have Halpern Conference & Dealmaking larger mixed-use projects, almost all to fit more square Halpern Booth 107 of which have a multifamily compo- footage on each site Enterprises nent. Since 2010, about one-third of in order to make October 23-24, 2018 all new apartment units built in metro their numbers work,” says Halpern. Atlanta have included on-site retail or One added bonus of developing or restaurants, either on the ground floor owning retail space in mixed-use proj- Atlanta or as part of a larger mixed-use de- ects is the higher rents these spaces velopment, accord- command. According to CoStar, retail ing to CoStar. This space built in metro Atlanta since 2010 Orlando is more than five has an average asking rent of nearly times the historical $24 per square foot. Retail space with- average for mixed- in mixed-use projects, however, has Tampa use development in averaged roughly 25 percent higher metro Atlanta. rental rates over that same time pe- Miami David Weinert, riod. partner and senior vice president of Welcome to Midtown Boca Raton David leasing at Cincin- A significant amount of the urban Weinert nati-based North ground-up and infill development un- American Properties derway is in Atlanta’s West Midtown North American LIC Real Estate Brokers Properties (NAP), says that the district. Once a rail spur and indus- mixed-use trend for trial haven, West Midtown has built www.REBusinessOnline.com Southeast Real Estate Business • October 2018 • 37 established at West Midtown staples like Westside Provisions District. “You can expect to see a lot of first- to-market retail and restaurants com- ing in,” says Garrison. “We're not go- ing to bring anything that's not super special to this West Midtown foodie culture. We've been traveling across the country and right now we have at least three or four restaurants that will be first-to-market or satisfy a certain niche. We’re also targeting a bodega grocery concept.” Across the Interstate 75/85 connec- tor in Midtown, NAP is underway on one of the larger projects in the city, the $360 million redevelopment of Colony Square. NAP’s Weinert says that the Midtown submarket is a de- veloper’s dream because of its strong demand drivers but lack of competi- tion. “The market is demanding a criti- cal mass of retail in Midtown,” says Atlanta-based Paces Properties recently signed Three Taverns Brewery to open up its new Imaginarium concept at Atlanta Dairies, Weinert. “Midtown has everything an adaptive reuse project in East Atlanta’s Reynoldstown district. that you would want to have in a mar- ket development story, like daytime “If you do a tour of best-in-class res- space,” says Mindy Selig, vice presi- ment,” says Selig. population, tourism, local resonance, taurants in Atlanta, it’s going to bring dent of Selig Enterprises. “Our goal South of The Works in the heart of 77 cultural institutions, public trans- you to West Midtown,” says Garrison is to create constant West Midtown is a pair of mixed-use portation — everything but a critical of S.J. Collins. “People even come in energy throughout projects coming to Howell Mill Road. mass of retail.” from the suburban communities to the property by of- The Allen Morris Co. broke ground NAP announced last year the have that urban, foodie flavor. Con- fering a tenant mix in August on Star Metals, two mixed- 28,000-square-foot food hall, Main & cierges in downtown hotels are sug- that appeals to every use buildings that will feature offices, Main, and recently inked a lease with gesting to guests West Midtown res- demographic.” residences and approximately 50,000 luxury movie theater company iPic taurants like The Optimist, Barcelona, Selig Enterprises square feet of retail space. Theaters. Bocado Burger or Cooks & Soldiers.” welcomed the first S.J. Collins also recently announced “The theater business isn't going Building off the lifestyle trends of tenant at The Works, The Interlock, a public-private ven- away for as long as we can see,” says the neighborhood and its proximity Ballard Designs, this ture with Georgia Tech which will oc- Weinert.