Lori Kilberg has weathered three commercial real estate recessions in her years as an attorney in the field. The first, which hit just after she started practicing, drove her to practice immigration law for a while.
But most of her career has been spent working with developers on retail, office and industrial projects, and through the years, Kilberg has seen a great deal of change. Atlanta’s attitudes about growth and development have evolved as its skyline has been transformed.
But one thing hasn’t changed enough, Kilberg says, and that’s the representation of women in this male-dominated industry. As this year’s president of Commercial Real Estate Women of Atlanta, Kilberg is dedicating much of her time to helping more women get a foothold in the business.
Q: How did the recent recession compare to the other two you’ve been through?
A: It definitely had the greatest impact, and I think that’s because it had the greatest impact on Georgia and Atlanta. I think in the recession of the early ’90s, we were still blowing and growing and barely skipped a beat. Atlanta was in a huge development mode. A lot of our clients were taking advantage of the distressed markets elsewhere. But this time around, Atlanta was very heavily hit. ... Development is only just barely picking back up, so it is very, very slow, although I think we are seeing some interesting signs of renewal.
Q: What are some of the encouraging signs?
A: There are certain retailers, for instance, who have bold expansion goals, and that’s driving a few things. It’s showing, first of all, that activity is coming back. They are making commitments to Wall Street about store openings, things like that. So, vacant space is being filled.
Q: What trends are emerging in the post-recession commercial real estate market?
A: One of the things we are seeing now is the whole concept of adaptive reuse. We’re seeing a lot of medical office uses moving into retail projects — schools, classrooms, different things that were never part of the retail picture. That’s been really interesting. Even the top centers, the regional malls, are putting in medical uses and educational uses that they never would have considered in the past. But the good news is that these are good-paying tenants. They take long-term leases. They pay high rent, and it’s bolstering everybody’s bottom line. And maybe there’s a new dynamic that’s going on in the traditional retail market to more of a mixed-use kind of approach.
Q: How is that different from what we’ve seen around town with old or existing buildings being turned into something new?
A: It’s definitely a continuation of that trend ... but the difference is now those projects are no longer competing with new development. In the past we’ve always been focused on building more and better and farther out and if-you-build-it-they-will-come, and that’s stopped. It has become much more important to look at the assets that we already have and to make use of those.
Q: Is it easier to get financing for an “adaptive reuse” project compared to new construction?
A: Well, it all depends on if you have an end user in mind. Speculative building is not being financed in any way, shape or form, whether it’s old, new or anything else. If you’ve got a good plan and you have an end user who is committed to the project, then you can get the financing. Otherwise, it is going to be very difficult.
Q: What’s the state of development in Atlanta. Have we been changed by the real estate collapse?
A: I think we’ve just gotten older. ... We’re not the young, new, brash city anymore that is growing by leaps and bounds every time you turn around. We’ve had some incredible growth spurts, and I am not by any means saying that the growth days are over. They’re not. They will come back, but they will be more measured. That’s really the lesson here. We need to be a little smarter, a little more careful. You can’t just build things for the sake of building them thinking that they will be occupied. You really need to do your homework.
Q: Do you think Atlanta has learned that lesson?
A: You always think that, and then the pendulum swings. I don’t think we ever really learn our lessons, and maybe we shouldn’t. Nobody wants to be the one who’s cautious during the good years only to be able to say, ‘See, I was cautious. I didn’t overextend.’ You want to take advantage of the opportunities that are there.
About the Author
