Retail clients who want to reduce their occupancy costs through CAM audits, lease administration and lease renewal/restructuring services have an ally in the SRS Real Estate Partners' Corporate Services team. Recently, the SRS team revealed millions in occupancy cost savings through occupancy cost reviews for long time client, Rent-A-Center.
Rent-A-Center engaged SRS Corporate Services in the fall of 2010 to perform occupancy cost reconciliations and reviews for Rent-A-Center’s corporate portfolio of approximately 2,800 stores. The SRS Corporate Services team assumed responsibility for reviewing and reconciling CAM, tax and insurance expenses. As a result, over the past two years, Rent-A-Center has realized $3.2 million in savings through occupancy cost reconciliations.
“We are pleased with the occupancy cost savings and the outstanding efforts of SRS’ Corporate Services lease administration team," said Robert Render, senior director of real estate for Rent-A-Center. SRS has also been responsible for ensuring all payments are in compliance with the specific terms of each lease agreement and has served as a single source of contact for the landlords.
“Our mission has been accomplished when we uncover occupancy cost savings and mitigate risk for our clients,” said Stan Heller, executive vice president and market leader for the Corporate Services office. "We foresee that more clients will discover the value of spend optimization through occupancy cost savings delivered by SRS Corporate Services.
Do you have a need for SRS Corporate Services? Contact Stan Heller to discuss your obstacles and how SRS Corporate Services can help you!
Scott Gardner
Senior Vice President
Houston Office
Interview conducted and written by: Tamara Skolnick
We had the opportunity to sit down with Scott Gardner, senior vice president in the Houston office, as he gives his focused insight into the Houston retail real estate market.
Q: Houston’s retail vacancy rate decreased from 7.2% to 7.0% in the fourth quarter of 2012, demonstrating the resilience of the retail real estate market. What are your expectations going forward in 2013?
Gardner: Going forward, we will continue to see less vacancy and less development, meaning less shopping centers being constructed, which can be directly attributed to retailers being reluctant to expand in part, due to the absorption of other stores. Retail realtors are also attempting to discover how to ”right fit their stores”, meaning they are attempting to fit an initial retail space of 30,000 square feet into a 20,000-square-foot retail area, while reducing occupancy costs and maximizing sales. Presently, retailers are focused on increasing store revenue and not expanding stores to cannibalize existing sales.
Q: There was only one new site plan of any real scale for the Houston market in 2012, which really speaks to the appetite for deals from larger retailers. When do you think new development will happen in Houston, which seems to be moving at a much slower pace than expected?
Gardner: I think new retail development will occur in Houston sooner than it will in other parts of the country due to our economy, as we are insulated with the oil and gas industry, the port of Houston, and the medical center, in addition to many other small successful businesses. I’m not exactly sure when this will transpire but, thinking ahead, indications would show it to be around 2015 when there will be enough new growth in Houston to create a significant catalyst towards retailers building new stores and providing consumers new places to shop. Houston’s housing market is currently one of the best in the country to date. I think retailers will take note and begin to expand on that in Houston; hopefully, sooner rather than later.
Q: Retailers are expanding again and remain hungry for growth, but trends have certainly changed with the economic downturn and a new norm has been established. As a result, retail chains have had to evaluate 2nd generation space for their brand to grow. The retailer response is to expand “in place," reshape their spaces and fine-tune their brands with the hope of squeezing more from existing square footage. Going forward, how do you think retailers aggressively reinventing their images will impact the Houston market and your business plan?
Gardner: There is quite a bit more e-commerce in 2013, and internet retailing has been growing steadily over the last decade but still accounts for a small portion of overall retailing. The Census Bureau of the Department of Commerce announced on February 15, 2013 that the estimate of U.S. retail e-commerce sales for the fourth quarter of 2012 was $59.5 billion, an increase of 4.4 percent from the third quarter of 2012. Against this backdrop, retailers and landlords are facing a new set of challenges and opportunities as internet technology transforms both consumer behavior and retailing business models. As more retail industries are going online, we will be required to select in what way we contribute to our retailer’s demands.
Q: What impact do you think social networking and leveraging the internet will have in growing your business?
Gardner: I think it will have a significant impact. As I previously mentioned, I believe retailers are continuing to target online sales through social networking. I think you will be witnessing more retailers making a push for the internet, and, going forward, it is essential we put our emphasis on groups and retailers who aren’t going to be focused solely on the internet. Ultimately, shoppers will have the central role in determining the growth in on-line versus in-store retailing, so it is essential for us to understand consumer motivations for on-line shopping as well as the technology that enables it.
For example, Restoration Hardware originally had five locations in the surrounding Houston area. They have since closed all but one location, which is now their flagship location in the Houston Galleria. Restoration Hardware has created a way for consumers to “touch and feel” their products at their flagship store and receive a hands-on experience. Customers are then able to purchase the products on-line. There is no longer the need to have the excessive overhead and occupancy costs of running five stores when Restoration Hardware can offer all of their products on-line and consumers are able to shop conveniently and directly from their laptops or computers.
We must focus our concentration on grocery stores, food users, pet supplies and consumers who have a need for specific products that are not readily available on-line, but need to obtain on a day-to-day basis. That’s more of our business model and who we want to target in retailers. In conclusion, we want to continue to grow and find the retailers who will be expanding for all of the right reasons, and not inconsequently chase any business, but finding the right business that fits our model.
Chris Maguire
CEO & Chairman of the Board
Dallas/Ft. Worth Headquarters
Fort Worth, Texas recently held their annual retail forecast where our CEO, Chris Maguire, had an opportunity to speak about the industry and his predictions moving forward. Below we have shared his thoughts on the national industry as well as Tarrant County.
2013 Tarrant County Retail Forecast
Quite simply, the retail industry is as dynamic as they come. Consumer behavior, economic factors and emerging technology directly impact all players in the world of retail. All players in the retail real estate world -- including merchants, developers and landlords – must be nimble in order to keep pace with the market’s fickle wants and desires.
Just as retailers look at the nation as a whole before determining which markets to enter, let us review the retail industry as a whole and then shift the focus to Tarrant County.
National Retail Snapshot
Even though the retail market is finally showing signs of recovery, it is actually over-retailed to the tune of 20-25% plus. Any excess inventory is either being forced out of the market or being converted into an alternative use that aligns more with consumer demand. In order to thrive, those remaining retailers not forced out have to adapt to the new marketplace. This adaptation includes various forms of shrinking: they will either need to downsize their workforces, reduce their store size, adjust inventories or perform a combination of these tactics to reduce costs and maintain operating efficiencies. In addition to downsizing, the retail world has encountered an increased demand for retailers and developers to create a superior and unique customer experience. With shopper expectations so high and the growth in e-commerce, it is more important than ever to realize that the role of the brick-and-mortar store is still very important, but it has shifted..
The development of new retail centers and the inventory of retail space have both declined steadily over the past ten years. In addition it is estimated that nearly one-third of the current retail inventory is now dysfunctional, irreparably damaged, poorly located, or obsolete. As a result, retailers are now faced with a limited supply of viable existing and new space with no meaningful pipeline forecasted for at least the next three years.
Key economic factors that have an impact on retailer expansion and operations include job growth and population change, as well as consumer confidence levels.. The ‘fiscal cliff’ tax increases only added fuel to the fire and reduced consumer’s hope for future financial stability. All of these items are contributing to reduced spending and a consumer who is more value conscious than ever.
The Internet Effect
The Internet plays a huge role in how retailers operate. Due to the relative convenience of online shopping, traditional brick-and-mortar retailers are faced with combatting the practice of showrooming -- examining merchandise in a traditional brick-and-mortar retail setting but purchasing online often at a lower price. Some national retailers have attempted to compete with showroomers by reducing price or price matching.
Although online shopping is certainly growing in popularity, the Internet’s impact on overall retail sales may not be as significant as one might believe. Data suggests that e-commerce represents around 6% of overall retail sales in the U.S. Smart retailers find ways to utilize the Internet hand-in-hand with their traditional storefront operations. And many formerly online-only retailers have or are adding brick-and-mortar stores to their strategies in order to better connect with their customers. Apple is probably the most notable of these. The retailer had no brick-and-mortar presence prior to 2001 and now boasts some of the highest sales per square foot in the retail industry. Hoping to follow suit, Samsung, Microsoft and Google are all building or testing brick-and-mortar concepts. Microsoft’s COO, Kevin Turner stated, “The biggest single thing we’ve learned from stores is it’s helping us to transition from thinking about our customers to thinking like our customers.” Bottom line, the Internet will not replace brick-and-mortar shopping altogether as the experiential element of shopping in a store cannot be replicated online.
National Retail Trends
Retail trends that we should anticipate during the next few years include the continued downsizing of retailer store counts, and in some cases, complete closures. Some of the remaining retailers have learned how to make their businesses successful enough to thrive and even expand including Pier 1 Imports and Ross among others.
Consumers will continue to benefit from entrepreneurs who are racing to launch the next big thing – that innovative product or concept that captivates the masses. Similarly, the retail center will continue to evolve as more uses that drive shopper traffic seven days a week, day and night, are added to the merchant mix. Shopping centers will be redeveloped to better compete for market share and mixed-use concepts will expand as the strategic combination of multi-family residential, office and retail has found success in the form of urban villages.
Within stores, progressive retailers will incorporate state-of-the-art product displays and fixtures, as well as empower store associates with better product knowledge, and even introduce restaurants within retail concepts. Developers will enhance the customer experience throughout its properties by providing safe, fun and entertaining environments for all, including children’s play areas, free Wi-Fi access and the appropriate mix of retailers and restaurants for mass appeal.
Tarrant County Retail Trends
More specifically in the Dallas-Fort Worth Metroplex, no matter how you measure it, the economy is strong. The 28.5-million-square-foot Fort Worth retail market managed to absorb all the new space completed in 2012 during the third quarter. In July, two neighborhood centers, the 121,000-square-foot The Shops at Timberland Crossing and the 18,600-square-foot The Towers of Grapevine completed construction, but net absorption totaled 197,000 square feet for the quarter. The vacancy rate fell 20 basis points to 13.1%, and remained at that level in October.
There were five qualifying retail investment sales for $78 million in the first three quarters of 2012, including one third quarter deal. The leading sale of the year is a portion of the 465,054-square-foot Montgomery Plaza in Fort Worth, sold by Kimco Realty to RioCan in June for $44.4 million ($191 psf). The rolling 12 month cap rate is 6.0% based on five deals, the same as the quarter before but significantly down from earlier rates. Just this month, University Park Village was sold for $105 million ($606 psf).
Community-neighborhood center rents have edged up thus far in 2012 after falling the prior three years. During the third quarter the average asking rent rose 0.2% to $14.30 psf.
The power center vacancy rate is 7.8% for the third quarter of 2012, unchanged from the prior quarter but down 100 basis points from a year earlier. The average asking rent for power centers is $19.97 psf, up slightly for the quarter and down slightly year-over-year.
The Renaissance Square power center is the largest project under construction, and is expected to complete construction in early 2014. Five community and neighborhood centers, led by Parkwood Plaza community center in northeast Fort Worth, are also under construction. Phase III of the West 7th development, Museum Place’s latest phase, a new gathering space in The Sundance Square plaza, and two mixed-use projects round out the current under construction list.
Competitive advantage and points of differentiation will be key focus points for all the players in the game of retail this year. The game is always changing, so you have to be willing and able to change direction on a dime.
Mike Polachek
Executive Vice President
Phoenix
Written by Mike Polachek for Real Estate Business Magazine
Well, 2012 has come to an end, the fiscal cliff has been averted for now and the presidential election is behind us. Despite it all, retail sales in the Arizona market seemed to fair reasonable well last year, albeit with markdowns acting as the trigger point for consumers to make those last-minute holiday purchases. With and active 2012 under our belts, the Phoenix market is hoping to outdo itself this year with leasing activity as retailer gear up for cautious expansions, downsizes and relocations.
The housing picture for Maricopa County is terrific in terms of inventory being absorbed. Homebuilders are building out improved lots and creating new subdivisions. It is likely that new housing permits, which were positive in 2011, will result in more than 12,000 new homes in 2013. This number should increase steadily for the balance of the decade. This is not to indicate that new retail development will be built anytime soon, but that these numbers may create more of an opportunity to fill existing retail space that has a current vacancy rate of 11.7 percent. Last year, we experienced a positive absorption of 1.03 million square feet, according to CoStar. Therefore, unless a significant amount of sublease space is returned to the market, the vacancy rate should continue to even out. Fortunately, there were some notable developments that ushered in the New Year in Phoenix. They included the Tanger Outlet Center at Westgate, as well as the Gila River at Wild Horse Pass near I-10 and Maricopa Road. Gila River is being developed by Simon Property Group and is scheduled to open soon.
Retail leasing activity in 2012 was at the highest volume the market has experienced since 2007, and 2013 should be even better. Much of the activity revolved around restaurants and fast casual chains, but many retailers stepped up their expansion efforts after sitting on the sidelines for the last few years. The dollar and discount stores were very active, along with a plethora of new and existing fitness centers that took spaces ranging from 5,000 square feet to 45,000 square feet. Many of the junior box retailers are resizing their stores not only to meet market availability, but also to reduce their sizes. They are doing this to accommodate the ever changing retail product demand and to compete with online retailers.
The urgent care market has also produced a number of new facilities primarily in retail buildings and shopping centers. That trend will likely continue as other medical providers, such as CareMore, which recently lease a former Cost Plus Market in Tucson, follow suit.
As the homebuilding industry continues to seek more suburban locations, the need for new retail will resurface. However, that is not likely to occur this year or next. Unfill locations are on most retailers’ radars, as are several mixed-use projects, such as RED Development’s CityScape. This retail, office and hotel project seems very in-demand in Downtown Phoenix and is so far proving to be successful.
Mark Reeder
EVP & Market Leader
Dallas/Ft. Worth
We recently sat down with Mark Reeder, EVP and market leader for the SRS Dallas/Ft. Worth office, to ask him about his predictions for the disposition industry as we settle in to 2013. Here are some of his insights.
Q: Surveys are reporting many retailers have plans to open stores over the next 24 months. Nationally, 81,990 stores are planned to be open by 2015. What impact does that have on the disposition side of the business for the coming year?
Reeder: A lot of those are going to be smaller shop space going into retail strips. When I think of disposition I think of certain categories, from a 5,000-square-foot restaurant to a 30,000-square-foot junior box, even a 10,000 square foot drug store or 100,000 square foot big box. If there are 82,000 stores opening in 2013, and most of them are smaller, those are going into small shop service space, and mostly impact the landlord side of the business. I do still think that a few significant retail names could change their plan or reduce store count significantly. Those disposition opportunities will still come throughout this year.
Q: Some retailers are changing their e-commerce strategy. Target has implemented six online only brands to try and capture sales in every avenue where their customer shops. Do you think other retailers will follow suit, and if they do, does that mean that many other retailers could be looking for smaller stores in the near future?
Reeder: I think that every viable retailer will be looking for omni-marketing opportunities from Target to Toys"R"Us. Every retailer is going to see sales growth through channels in addition to brick and mortar. It’s a case by case basis if they will reduce their footprints. Some will right-size, others may investigate and see how omni-marketing and web based sales are impacting them. I don’t think it will always be a reduction, but in some cases it will.
Q: Any other predictions for the disposition industry for 2013 you would like to share?
Reeder: It appears the occupancy levels of anchor sized stores has increased as the inventory has decreased because of the lack of new development. Some opportunistic retailers have expanded into vacant boxes. So, any new disposition opportunity might be backfilled more quickly because of lack of options. Also, disposition is not just existing buildings, it is also underutilized land sites adjacent to existing stores. Excess land sales are still happening and many large retailers are already doing this.
Mark works with many disposition clients for SRS Real Estate Partners. We look forward to his work in 2013.
Monthly Insights into Capital Markets SRS Real Estate Partners is pleased to distribute it's monthly investment sales newsletter presented by the Atlanta Investment Sales Team, composed of Kyle Stonis, Pierce Mayson and David Holcombe.
Turn Up the Sales VolumeThe fourth quarter of 2012 turned into an end of year boon for retail investment sales as transaction numbers continued to easily surpass levels seen in 2011. In October alone, sales of significant retail assets rose 10% year-over-year to $4 billion. Taking out large entity-level transactions which occurred last year- such as Blackstone’s purchase of Centro’s US portfolio- year-to-date sales volume was up an encouraging 31 percent while average cap rates were down 10 basis points to 7.3%. With the continued lack of distress in the retail sector paired with an abundance of buyer appetite, investors continue to pursue class ‘B’ and ‘C’ centers with a more notable value-add component. All of this activity seems to be a function of low interest rates as well as motivation for both sellers and investors in regards to capital gains and general uncertainty about the economy and political outlook for 2013. In all, investment sales volume for the year had already reached $70 billion by early December, and with a month of end-of-year transactions having been finalized, it is a safe assumption that 2012 finished as a banner recovery year for the retail investment sector.
Source: Retail Traffic
It Tastes Like ExpansionChicken chains will continue aggressive expansion plans in 2013 as regional rivals look to establish themselves in new territories. Chick-fil-A looks to lead the way with 90 new locations this year, adding to its already 1,600 locations nationwide. The company posted in excess of $4 billion in sales last year which was a 13% increase from the previous year and a 7% increase in same-store sales. As it continues to expand into new markets, Chick-fil-A attracts an endless supply of new loyal customers. In Chicago, for instance, Chick-fil-A has taken the city by storm, as the product is unlike any other offered by fast food chains in the city and the quality and service are consistently excellent. Other chicken chains plan continued growth as well; Zaxby’s and Bojangles plan to add 40 new locations, Popeyes will look to grow by about 100 new locations, KFC will add 15 new stores, and Church’s will add upwards of 60 locations.
Source: Crittenden’s Retail Space
Getting Top Dollar
Dollar stores continue to draw plenty of attention from net-lease investors, as cap rates have continued to compress for some of the top operators such as Dollar General and Family Dollar. With interest rates maintaining historically low levels, buyers are opting for dollar store opportunities in order to fill their queues. A lack of investment-grade assets has also pushed a myriad of 1031 Exchange buyers into the fray, causing cap rates to drop 126 basis points between Q3 of 2011 and Q3 of 2012; median asking cap rates for Dollar General stores were 8.25% while Family Dollars were 8.28% and average pricing for these assets has reached $103/SF.
Source: Shopping Center Today
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Shenandoah Plaza |
Washington Square |
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Monthly Insight into the Capital Markets
SRS Real Estate Partners is pleased to distribute it's monthly investment sales newsletter presented by the Atlanta Investment Sales Team, composed of Kyle Stonis, Pierce Mayson and David Holcombe.
A Means to a Gains: the Election's Effect on the Close of 2012
Politicians are locked in a battle that will determine who will pay higher taxes, but many real estate owners aren't waiting to find out the answer. Now that the result of the election is final, the prospect of rising taxes on capital gains is prompting owners to make definitive moves toward unloading certain assets which they may have had reservations about before November 6th. The potential rise in the capital gains tax is part of a plethora of potential year-end tax increases and spending cuts, aptly known as the fiscal cliff. Leaders in Washington are likely to spend weeks disputing which taxes get increased, and many investors begrudgingly anticipate capital gains will be one of them. That being a strong probability, many sellers are measuring their expectations, willing to take a more aggressive position on getting their asset sold before year-end. This translates to ample opportunity for active investors, funds, REITs, 1031 Exchange buyers etc., many of which have an excess of remaining capital to deploy by the end of December. With an apparent mutual understanding amongst active buyers and sellers, it is safe to anticipate that more deals will be getting done leading up to the holidays rather than the usual winding down of activity which typically accompanies late November and December. With the threat of capital gains forcing hands, the market could very well see obvious incentivizing by both sides, including the use of all cash offers and quick end of year closings to facilitate the acceptance of discounted pricing by sellers at slightly higher cap rates, which may have not been in play until now.
Source: Pierce Mayson
Big Lots' Big Moves
Big Lots is making moves- both inside and outside its stores. The retailer will debut coolers and freezers inside its stores this spring in an effort to drive more traffic and keep up with discounters like Target, Walmart and Dollar General which continue to expand their refrigerator and freezer sections. Additionally, Big Lots will start accepting food stamps next year in an effort to accommodate all of its customers. The company also plans to build on its 1,468 store portfolio by opening 90 additional locations this year in strip and neighborhood shopping centers, with a targeted size of 25,000-35,000 square feet.
Source: Crittenden’s Retail Space
3Q- Volume & Pricing Trends
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Washington Square Shopping Center |
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Burlington Coat Factory and
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Welcome!
Steve Gunning and Sarah Williams are retail tenant representatives with SRS Real Estate Partners in Atlanta, Georgia. They are experts in retail real estate throughout the southeast, having 30+ years of combined experience representing such retailers as Toys"R"Us, T.J. Maxx, Five Guys, Golfsmith, Carter’s, Moe’s Southwest Kitchen, Hobby Lobby, Shoe Carnival, and many more. Their goal in sharing this newsletter with you is to keep you informed on markets and retail happenings throughout Georgia and the surrounding areas.
Retail Developments on the Rise in Georgia
FINALLY! After what has been an interminable wait, retail development in Georgia is on the march again.
For the last several years we've kept our ears open for the sounds of new retail development in Georgia. But until recently, all we've heard is crickets. Now, after sitting around watching grass, weeds and other unwanted things grow over prime development tracts, we now hear the pitter patter of developers, engineers and architects busy at work.
Sarah and I recently took an inventory of development activity around Georgia and found well over 30 retail projects in various stages of development throughout the state. Here's a quick summary of some of our more interesting finds:
Atlanta Area:
Buckhead Atlanta resumed construction in August of this year. This development in the heart of Buckhead is now being spearheaded by Oliver-McMillan. We're told that they are focusing on luxury brands but announcements have been few and far between. Let's keep our fingers crossed!
Ponce City Market is located in Midtown Atlanta. This mixed-use development will include 330,000 SF of retail, 400 residential units and some office. Specialty Retail will include unique restaurant concepts from top chefs around the country. The project is inspired by Chelsea Market in NYC.
Emory Point will contain 80,000 SF of Retail Space beneath 443 Gables Residential units. Delivers November 2012. Signed leases include BurgerFi, Fresh To Order, Marlow's Tavern, Which Wich, The General Muir, La Tagliatella, Paradise Biryani Pointe, Tin Lizzy's, American Threads, Jos. A. Bank, Lizard Thicket, Loft, and Fab'Rik. CVS will anchor the project with a prominent corner position at the traffic light.
Sandy Springs Gateway is a proposed retail development on Roswell Rd at Windsor Pkwy in Atlanta. This 112,000 SF center is slated for Fall 2013 delivery and is close to Chastain Park and luxury shopping in Buckhead. Anchor, junior boxes, outparcels, restaurants and shop space available.
SouthPoint (McDonough, GA) Phase I is anchored by JCPenney and Kohl's, who both opened WAY back in 2008. More recently, the following stores opened: Hobby Lobby, Academy Sports, TJ Maxx, Haverty's, ULTA, Party City, and Five Below. Phase II will be anchored by Movie Tavern. The landlord is seeking restaurants and outparcel users.
Barrow Crossing (Winder, GA) opened in 2009 but quickly stalled out in the downturn. It is anchored by Target and Publix. In 2012, TJ Maxx opened. The developer is seeking additional junior anchors, shops, and outparcel users.
Avalon (Alpharetta, GA) is a new lifestyle center being developed by our friends at North American Properties. Whole Foods and Regal Cinemas will anchor the project. Their "prospect" list is pretty exciting; we're expecting good things out of this development.
Lake Point Sports (Emerson, GA) will be one of the largest (if not the largest) sports tournament complexes in the country. When fully developed, it will have 16 major-league sized baseball fields, 14 fast-pitch softball and junior baseball fields, an 18 court tennis complex, a 16-acre wake park, a Miracle League field, and a 114,000 square foot indoor facility for gymnastics, wrestling, volleyball, basketball, cheerleading and sports performance training. Lake Point will also include entertainment and shopping destinations for the teams' traveling families. Seeking hotels, movie theater, restaurants, outdoor sports retailers, etc.
Old National Marketplace (College Park, GA) Phase I delivered in 2011; Phase II is now leasing and will be anchored by a new Burlington Coat Factory, Marshalls, and Beauty Masters. Outparcels are available.
The Outlet Shoppes at Atlanta (Woodstock, GA) Proposed retailers include Saks Off Fifth, Brook Brothers, J. Crew, and your typical outlet lineup. Outparcels to include McDonald's, Chick-fil-A, and Bob Evans.
Suburban Plaza (Decatur, GA) will be redeveloped with Walmart Supercenter as the new anchor. LA Fitness, hhgregg, Michael's, and Starbucks are rumored to be considering the project as well.
Outside of Greater Atlanta:
Epps Bridge (Athens, GA) near the University of Georgia will be anchored by Georgia Theater Company, Marshalls, Petsmart, Dick's Sporting Goods, Ross, Off Broadway, and ULTA. Junior anchor, shop spaces, and outparcels are still available.
Village at Riverwatch (Augusta, GA) is a 320,000 square foot power lineup that is planned next to Costco on Riverwatch Parkway near the South Carolina line. Junior anchor, shop spaces, and outparcels are still available.
Columbus, GA Cabela's is rumored to be taking over a former Lowe's on Veteran's Parkway. Additionally, there is a planned redevelopment of the Midtown Shopping Center on Macon Road; soft goods are mentioned but no signed tenants yet. Small shop retail continues to grow in and around Columbus Park Crossing.
Savannah, GA Whole Foods is finally coming to Savannah. They are planning a unit at Victory Dr. and Truman Parkway. Co-tenants will include Petsmart, Chipotle, and Zoe's Kitchen.
Village on Pooler Parkway (Pooler, GA) will be a 150,000 square foot community center with 6 outparcels. Several potential retailers have been mentioned, mostly soft goods. Outparcels are going fast with commitments from Logan's Roadhouse, Olive Garden, and McDonald's under way.
Mill Creek Station (LaGrange, GA) Phase I will include 180,000 SF of retail. Owners are currently negotiating with anchors. Jr. anchor space will be available, along with about a dozen new outparcel opportunities.
Rome City Center (Rome, GA) is a planned 300,000 square foot power center with 11 outparcels. The entitlement process has held this up a bit, but we're still expecting this center to become a reality based on the pent up demand in Rome.
Atlanta Retail Market - First Quarter 2012
That's it in a nutshell. While there are plenty of other projects on the boards, this list represents some of the more exciting developments we've unearthed. As Tenant representatives, we meet with developers constantly to stay informed on what's happening in the marketplace. If you'd like to know more, let's set a time to get together.
By: Sarah Williams for Atlanta Property Journal Blog
Notes from ICSC Next Gen Conference July 29-31, 2012
Atlanta, GA
As the recession begins to fade, development starts to gain traction. However, because of lessons learned from the recession, development looks differently than it did in the past. At the ICSC Next Gen Conference in Atlanta last month, we heard from top developers who are at the forefront of revolutionizing retail real estate development. This article is dedicated to those developers and their current projects. At the end of each section, I will summarize key words and phrases that highlight each project’s influence on the evolution of retail real estate development today.
1. Ponce City Market
Have you heard of Chelsea Market in NYC? Ponce City Market will be its Southern counterpart. Jamestown Properties, developer of the renowned Chelsea Market, has acquired a 2.1 million SF historic building in Midtown Atlanta that is being transformed into 330,000 SF of retail, 400 residential units, some offices, and who knows, maybe even some Food Network studios like they have done at Chelsea. Jamestown’s Vice President of Development, Jim Irwin, told a room full of ICSC’s Next Generation that one secret to success in retail is, “It’s what you don’t see, and what you can create out of it.” Beyond the creative vision of Jamestown’s success, they also had to get creative in terms of financing the mammoth project. The majority of the capital dedicated to Ponce City Market is coming from a pool of German private equity, which Jamestown manages. Additional funding has been secured from two federal grants with the Beltline Partnership. While this historic redevelopment is still under construction, the pedestrian and bike paths around the building are opening this month. If you haven’t visited the Ponce City Market area in a while, you might be surprised to see construction underway, as well as all of the new green space that has blossomed around it.
Some keywords that summarize Ponce City Market’s influence on the evolution of retail real estate today: non-traditional financing, in-town redevelopment, creative thinking, non-traditional retailers, captured public, tourism
2. Emory Point
Cousins Properties, Inc., an Atlanta-based company, has learned that some of the most vibrant and successful, recession-proof retail is near universities. Pair that wisdom with the ability to secure a multi-acre tract of land across from Emory University and the world headquarters of the Centers for Disease Control, and you’ve got Cousins’ newest project under construction: Emory Point. 80,000 SF of retail space beneath 443 residential units (thank you Gables Residential for providing extra capital), paired with the surrounding demographics with some of the highest densities and education levels in the Southeast, and you’ve got a healthy new retail development that leased up quickly, even during the recession. Retailers that will open stores at Emory Point over the next 60-90 days include BurgerFi, Fresh To Order, Marlow’s Tavern, Which Wich, The General Muir, La Tagliatella, Paradise Biryani Pointe, Tin Lizzy’s, American Threads, Jos. A. Bank, Lizard Thicket, Loft, and Fab’Rik. CVS will anchor the project, taking a prominent corner position at the traffic light.
Some keywords that summarize Emory Point’s influence on the evolution of retail real estate today: non-traditional financing, capital partner, density and education, proximity to a major university.
3. Lake Point
A new category of commercial real estate development is emerging: “Sports Tournament Vacation Destinations.” In fact, this has already been classified as a new asset class in retail. Georgia is home to an innovative developer who is leading the charge in this category. Neal Freeman, Managing Partner of Atlanta-based companies Consortium Realty Advisors and Watkins Development Group, is on track to transform 1,400 acres in Emerson, Georgia into a sports tournament complex that will attract over 4 million visitors per year and will create 26,000 new jobs. Freeman and his partners have raised alternative capital from non-traditional financing sources (which we predict we will see much more of in the next generation of commercial development). In addition to the 16 major-league sized baseball fields, 14 fast-pitch softball and junior baseball fields, an 18 court tennis complex, a 16-acre wake part, a Miracle League field, and a 114,000 SF indoor facility for gymnastics, wrestling, volleyball, basketball, cheerleading and sports performance training, Lake Point will also build entertainment and shopping destinations for the teams’ traveling families. We’re talking hotels, restaurants, a movie theater, outdoor sports retailers, Rawlings, Oakley, ice cream parlor, the list goes on… and we are excited about it. Check it out at http://www.lakepointsports.com.
Some keywords that summarize Lake Point’s influence on the evolution of retail real estate today: non-traditional financing, Sports Tournament Vacation Destination, innovation, major attraction, entertainment, hospitality.
Sarah Williams specializes in retail tenant representation at SRS Real Estate Partners. For more information on new retail developments in Georgia, contact Sarah at sarah.williams@srsre.com.
By: Frank Bullock, EVP & Market Leader for D CEO RealPoints Blog
One recent Saturday evening, I was sent to World Market on a mission of mercy by my lovely and talented wife of 33 years. The mission called for me to procure their world famous dark chocolate with sea salt. It led me to experience North Greenville Avenue on a hot summer night—something I have not done in a long time.
Old Town shopping center, home to the first T.G.I. Friday’s in Dallas and many happening nightspots, and Greenville Avenue itself was sleepy on this evening, although it was still early by that neighborhood’s standards. After all, the frozen margarita was invented at Mariano’s Cantina some 40 years ago in Old Town (an off-street location with terrible visibility), and the eatery stayed there for an eternity.
Legendary restaurateur and Texican philosopher, Gene Street, opened his third Black Eyed Pea at Greenville Avenue and University Boulevard and perfected his home cookin’ concept that spawned a 270-unit chain and multiple successful concepts while mentoring and training hundreds in the industry, including me.
On this night, I saw a line at McDonald’s on Southwestern Boulevard with 11 cars in the drive-thru lane. It was not the California newcomer, In-N-Out Burger, but basic old McDonald’s, with a significant line at 8:45 p.m. I remember when they bought the corner from the Houston-based Ninfa’s Mexican restaurant family for a million bucks. McDonald’s tore the building down and built their burger joint, which was undoubtedly the highest and best use for the real estate.
The relocation of the Black Eyed Pea from University Boulevard to north of Lovers Lane, located adjacent to Sigel’s Fine Wines & Great Spirits on the west side of Greenville Avenue directly across from Old Town, was a major decision to ‘go north’. The Black Eyed Pea lasted there for more than 20 years; it was a transaction where I represented the Black Eyed Pea to Alden Wagner Sr. in 1988. It is now becoming a medical “doc in the box,” taking away another indigenous eatery and nightspot in the corridor.
Several other newer offerings—Baker Bros American Deli, Another Broken Egg Café, and Sweet Tomatoes soup and salad bar, all of which thrive on the daytime business of the Central Expressway office population—were characteristically slow. Yet these successful concepts see the value of a Greenville Avenue address.
In a recent conversation with my comrade and friendly competitor, Jack Gosnell at UCR, we talked about how interesting it is to see concepts change, restaurants evolve, and players come and go; yet good real estate only gets better. North Greenville Avenue, as that great Texican philosopher once told me, “is a chicken dinner winner.”
Some things change…and some actually get better.