LAS VEGAS —- In a secluded conference room lined with maps and renderings, Atlanta developer Jeff Fuqua pitched retailers on the Braves ballpark site and a smattering of other mixed-use communities he plans from Kennesaw to Decatur.
On the convention center floor, Mark Toro, another of the metro area’s development big shots, preached his company’s gospel of experiential retail and luxury hotel-like customer service at the core of the popular Avalon project in Alpharetta. Selig Enterprises, OliverMcMillan and other notable developers with Atlanta ties all pressed the flesh here at the International Council of Shopping Centers RECon conference, wooing some of the retail industry’s biggest names.
Amid the trade show razzmatazz, boozy after-hours parties and casino lights, it was hard not to feel a little pre-recession exuberance. Retail sales are stronger, merchants that hunkered down during the downturn are looking to refresh tired stores and build new ones. Even predominantly online retailers are trying physical shops.
John Bemis, Southeast retail market team leader at real estate services firm JLL, likened the RECon confab to retail’s Super Bowl. It’s the crossroads where merchants, restaurant groups, developers, consultants and financiers meet, talk shop and plant seeds for new stores, new complexes and property sales.
For a few years after the economic bust, a conference known for its high-energy trade floor and rollicking parties had turned into a wake. Attendance plummeted from pre-recession highs near 50,000 to fewer than 30,000 as developers and merchants slashed costs and the pace of new projects ground to a halt.
Attendance this year surged to 36,000 — the highest since the recession. The convention floor was choked with booths costing up to seven figures. After pitching deals on the convention floor, brokers, retail execs and other players wandered over to the casinos for lavish parties.
“This conference is a definite indicator and bellwether of how the economy is doing,” said Bob Simons, a partner at Hartman Simons and Wood, an Atlanta commercial real estate law firm, which held at party for 1,200 at the Paris casino.
Many challenges for retail remain, most stemming from the inexorable growth of online sales.
Yet, investors — both domestic and foreign — are jumping back into retail real estate, scouting new and existing centers seeking healthy returns amid prolonged low interest rates. Lenders also have turned on the spigots after the economic shock dried up lending.
The industry has moved past a recession that left some merchants teetering, put malls and shopping centers into foreclosure and sapped spending. There’s more demand by retailers for new space than there is supply coming onto the market, said Bob Wordes, chief operating officer of Atlanta-based brokerage the Shopping Center Group.
Many retailers want to grow selectively — particularly in city centers and affluent inner-ring suburbs.
“Urban is hot,” Wordes said.
Fewer big projects
Metro Atlanta’s development pipeline looks different than pre-recession. There are still ambitious large-scale projects — for instance the Braves stadium site and the second phases of Avalon and Buckhead Atlanta — but their numbers are fewer. Instead of sprawling green field development, it’s often more dense and centered around residential.
Apartment developers are more often looking to fill ground floors of high-rises with convenience retail and restaurants.
Abe Schear, an attorney at law firm Arnall Golden Gregory who specializes in retail, said retail is co-mingling with multi-family development, and “mixed-use is now a term that includes projects large and small and can apply to both vertical and horizontal properties.”
Toro, the market leader in Atlanta for North American Properties, pitched development opportunities at Atlantic Station and Avalon. North American and partner CBRE Global Investors recently put the retail town center and several development sites at Atlantic Station on the market. The partners bought the bulk of the complex during the financial collapse and helped return the center to health and fill up its office towers with tech companies.
“Capital is plentiful and aggressive,” Toro said. “(Investors) are going after well-positioned fortress properties.”
Toro said many scenarios at Atlantic Station are at play. His firm could decide to remain involved as an owner and developer there while courting a new equity partner. The Midtown mix of high-rises has several parcels of remaining development land zoned for high-rise residential, more retail and offices.
Toro’s team also was courting retailers and restaurants for the second phase of Avalon, a mini-city at Old Milton Parkway and Ga. 400.
Another of the major metro Atlanta project getting attention was the entertainment district next to the future Braves stadium, SunTrust Park. Fuqua and partner Heather Correa had 78 meetings scheduled for the complex and other projects in their pipeline.
Baseball and shopping
The Braves want to create a new fan experience outside their new 41,000-seat ballpark near Cumberland Mall.
They plan to open a ballpark, a concert venue, hundreds of residents and more than 1.5 million square feet of retail, restaurant, hotel and office space all at once. Additional phases of development could bring more retail and other amenities.
The Braves say they have letters of intent from retailers but aren’t ready to announce first tenants and declined to discuss their targeted companies. Comcast plans to occupy an office tower and Omni Hotels is on board as well.
At a real estate event last month, Fuqua said higher-end retailers on par with J. Crew, Anthropologie and lululemon were to be expected. Fuqua is aiming for a grocer and flagship stores for new entrants and retailers that have few shops in metro Atlanta. A focus will be women’s specialty retail.
The complex has to work as a thriving mini-city that draws even in the off season. But when the team is playing, the stadium becomes an additional traffic generator of what the Braves project will be 3 million fans a season.
“It will never seem quiet in this project, which is great for retailers,” Fuqua said. “We sell traffic. That’s what our business is.”
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