Southprop reinvests in properties, says it's here to stay

With metro Atlanta's commercial real estate market in its worst downturn in decades, prospective tenants want to know if a landlord will be around for a while.

That's a concern being voiced more frequently to landlords such as Southprop Inc., a  family-owned commercial real estate investment company in Atlanta with four employees, including the owners.  The answer:  Southprop  is here to stay,  its owners say, regardless of market conditions.

"We've kept our noses cleans and positioned ourselves well in the last decade, " said Brad Glenn, 32, vice president, whose father, managing partner and president Jimmy Glenn, 62, established Southprop in 1983. His son joined him in the business in 2001, after working for Turner Entertainment (Strategic Planning Group).

Instead of buying and flipping properties for short-term gain in the boom times,  Southprop stayed true to its core principles, Jimmy Glenn said, reinvesting in the properties it owns, leases and manages to strengthen its core assets "while strategically adding" to its portfolio.

"We're not buyers and sellers," he added. "We're long-term investors. We felt the market was overheated."

That insight put Southprop in a position to purchase property while other developers are having difficulties,  said Anna Edge, CEO of Retail Services Property Group.  Edge said she represents tenants and has worked a number of deals with Southprop in the past 20 years.

"They have really good relationships with their tenants," she said. "They also take properties a lot of other people would pass up and turn them around and reinvent them."

Southprop's portfolio includes retail centers Ivy Walk in Buckhead, Arbor Walk in Douglasville, Piedmont Walk in Marietta and Emory Promenade in Decatur, as well as the 1015 Windward Ridge Parkway office building in Alpharetta , 500 Satellite Boulevard in Suwanee and other properties.

The Glenns point to Ivy Walk  as an example of  how reinvesting in property can pay off, especially in a down market.  Ivy Walk is not that far from developer Ben Carter's  Streets of Buckhead retail  project.

A year ago,  Southprop took out a loan and renovated Ivy Walk, which led to the signing of two new leases -- making the property 100 percent leased, Brad Glenn said.  Some other tenants extended leases.

"We were putting money back into Ivy Walk at a time others were starting to pull back on spending," Brad Glenn  said.  "That gave us a competitive advantage."

Mike Dana, owner of Johnny's Hideaway,  has been a tenant for more than 20 years at Ivy Walk.  He signed a new lease a couple of years ago.

"When you're an established business and have a decent landlord, to move to save a few dollars is ridiculous," he said. "Jimmy is a decent guy and is good to his word.  He is very responsive to tenants' needs when there is a problem. That's probably why he is successful. He has a lot of properties and doesn't seem to lose a lot of tenants."

In November 2006,  Southprop purchased the Alpharetta office building, which was occupied by Netbank.

"We bought the building knowing Netbank was struggling," Brad Glenn said. "If they stayed, we would do OK with the investment. If  they left, we would hit a home run. They'd put about $3 million worth of improvements in that building."

Netbank went under.  In July,  Southprop signed a 10-year lease with New York-based Kaplan Inc. The education and career services giant leased the entire 100,000-square-foot building and plans to bring more jobs to the metro area.

For the record, Southprop boasts that it has never been a day late on a mortgage payment. And the company is looking for more opportunities to buy.