D'Ambrosio

In Atlanta’s retail market, the low cost of capital and competition means developers are going further out, in front of the growth, to build retail in places previously considered too green. “There’s a good amount of renovation and turnaround activity in town as well,” says Tony D’Ambrosio, investment sales associate with Spectrum Realty Advisors.

Caldwell Zimmerman, executive vice president/partner with Colliers Cauble & Company, adds, “There is a greater awareness of opportunities in minority markets. Wal-Mart, Target, Home Depot and Lowe’s Home Improvement Warehouse are still leading most large development projects.”

Zimmerman

Unlike other real estate sectors, retail has clearly done well during the past 3 years of economic downturn, says D’Ambrosio. He explains, “The neighborhood centers are a strong asset class since they serve everyday needs for residents in a trade area. And large sectors of the population — through cash-out refinancing or because their household incomes have been stable or growing — continue to drive retail activity at the malls, power centers and lifestyle centers.”

D’Ambrosio adds, “The great thing about retail is that you have local operators, whether they’re franchisees or something else, who will fill the needs of the marketplace, regardless of what the national chains are doing — but we have seen the national retailers pick up their activity as well.”

Significant retail developments in Atlanta include Cousins Properties’ Avenue West Cobb, which recently opened. “It’s good to see this successful lifestyle center concept go to West Cobb, a booming and affluent area,” D’Ambrosio comments. The project is across the street from Spectrum’s Belk deal at Village Green. Belk signed a 65,000-square-foot, 20-year ground lease at Phase III of the Village Green Shopping Center in West Cobb County; Spectrum Realty Advisors brokered the transaction.

Midtown’s Atlantic Station, currently in progress, is one the most significant developments in Atlanta, luring big name retailers including some that are new to the market, like IKEA.

Also interesting is Charlie Hendon’s purchase and planned redevelopment of North Dekalb Mall. “You’ll see new retailers go there, and it will breathe life into that area, which is underserved by retail,” D’Ambrosio says.

BellSouth and Carter’s redevelopment of Lindbergh Plaza is also significant. “It’s changing the impression of the Piedmont/Lindbergh vicinity,” says Zimmerman.

The Atlanta retail market has about 10.5 percent vacancy right now. New retailers to the market include IKEA Furniture, H.H. Gregg, Carvel Ice Cream, Buffalo Wild Wings, O’Reilly Auto Parts, Vocelli’s Pizza and Joey’s Mexican Grill. “A lot of restaurant concepts are emerging or expanding,” D’Ambrosio notes.

“We’ll see continued growth and development up Georgia 400 and in the northern suburbs, as well as south down Interstate 75 in Henry County, among other places,” D’Ambrosio predicts. “There’s still a lot of infill taking place inside and close outside the perimeter because of the strong residential growth with demographics that retailers want to serve. In town, with the existing traffic and residents, it’s a matter of filling the gaps in the market, especially with neighborhood turnarounds and regentrification.”

Zimmerman expects to see more obsolete properties demolished to make way for new retail. He says, “Retailers are willing to experiment with different concepts in high-density urban markets.” This experimentation also includes two-level stores and deck parking.

Zimmerman also notes that bank branches are very active and expanding and movie theaters are looking at new development opportunities. The area is also seeing some car dealership activity.

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