SOUTHEAST SNAPSHOT, OCTOBER 2007

Atlanta Retail Market

When looking at Atlanta’s retail sector, mixed-use continues to be the biggest trend, and it is having an effect on both urban and suburban areas.

In urban areas, a lack of land has forced developers to use land for the highest and best use, causing many  to go vertical. Cousin’s Terminus development, featuring high-rise towers offering residential, office and retail space, in Buckhead at the corner of Peachtree and Piedmont roads is transforming one of the key intersections in the city with its mix of office, residential and retail components. However, the most exciting retail project in Buckhead, and perhaps in the entire Atlanta area, is The Streets of Buckhead. Ben Carter’s $1.2 billion visionary project will turn the former Buckhead Village area — once ground zero of Atlanta nightlife — into an 800,000-square-foot mixed-use mecca, with high-end shopping believed to rival Rodeo Drive in Beverly Hills and Madison Avenue in New York City. The project recently broke ground with the demolition of CJ’s Landing, once one of Atlanta’s favorite watering holes.

Moving south along Peachtree is Midtown, one of the hottest retail markets in the city. Midtown encourages people to walk, so it is no wonder that it has become the epicenter for the live/work/play concept. With its mix of street-front restaurants and shops below office and condominium towers, the area attracts pedestrian traffic 7 days a week. The new Atlantic Station development has given the Atlanta market a new retail destination, and it has become the project to which others seek to be compared.

Midtown also has the distinction of being selected as the home of Donald Trump’s first Atlanta project, Trump Towers. Located at the corner of 15th and West Peachtree streets, the $300 million development will feature two condominium towers and luxury retail.

Downtown, the mixed-use story is best illustrated by Allen Plaza, Barry Real Estate’s $1.5 billion project that, when complete, will encompass 200,000 square feet of retail and restaurants along with its office and residential components. The project has brought life to a formerly underutilized part of the submarket, and features a restaurant, French American Brasserie, that has quickly earned itself a place among the city’s other fine dining establishments. In addition, Barry is in talks with Publix to bring a grocery store to the project, which would be the first major retailer to come to the Central Business District in a long while.

Moving north, one of suburban Atlanta’s most exciting projects is Prospect Park in Alpharetta, Georgia. Thomas Enterprises’ 64-acre mixed-use property will offer upscale luxury in a suburban location. The project’s retail component is The Forum Collection, 770,000 square feet of high-end, open-air retail that will become a destination for north Fulton County residents who once needed to drive into Buckhead to take advantage of luxury shopping. It will also bring a much needed multiplex cinema to the area along with a spa and a Jazz and supper club, among other entertainment features. In addition to Prospect Park, Vickery in Forsyth County is one of the best examples of suburban live/work/play in a dense residential market north of Atlanta.

With growth to the north, south, east and west, the Atlanta retail landscape is large enough to accommodate a variety of players. Companies such as Sembler, Cousins, Inland, Thomas Enterprises and Ben Carter Properties are dominating the scene with high-profile projects, while new retailers are continuing to find a foothold in the Atlanta market. QSRs, or quick-service restaurants, seem to be expanding so rapidly, it is hard to keep track of those entering the market. Raving Brands, with its flagship, Moe’s, has set the standard in the city; however, there are a number of others gaining ground. Rising Roll, 5 Guys Burgers, FROOTS, Jittery Joe’s and Rita’s Ice, to name but a few, have brought some interesting new concepts to the Atlanta marketplace. Both H Mart and Grand Mart are catering to the Hispanic and Asian markets, primarily in the Gwinnett County area.

Occupancy rates vary. REITs seem to be at 93 percent to 97 percent occupancy, grocery-anchored centers hover between 88 to 93 percent occupancy, while shadow strips and independents are running 10 to 20 percent lower. Independent strip centers without national brands are having trouble attracting credit worthy tenants.

Looking toward the future, the Georgia Highway 400/north Fulton County market will continue to be strong, with retail growth in the Cumming area. Midtown and Buckhead continue to thrive with residential condominiums and restaurants catering to both working singles and empty nesters. Having no geographic boundaries, Atlanta’s growth will continue in all directions, with what was once thought of as the ‘hinterlands’ ripe for affordable housing; thus, ensuring the adage that residential drives retail continues to prove true.

— Jeff McMullen is with  Richard Bowers & Company in Atlanta.


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