ATLANTA — During the past five years, the retail world has seen tenant activity diminish and shopping center vacancy rise. Landlords have been forced to find creative ways to maintain net operating income (NOI) and reduce the surplus of retail vacancy.
This trend has created a noticeable paradigm shift in retail leasing — specifically as it pertains to office and medical tenants — such as urgent care facilities, dentist clinics, chiropractors and call centers. Tenants who traditionally occupied space in office or medical complexes are finding that by positioning themselves within retail centers, they garner an increased exposure to consumers while reducing overhead cost.

DaVita Dialysis, part of DaVita HealthCare Partners Inc., has opened several 4,000- to 6,000-squarefoot clinics in shopping centers across the Atlanta area, including the backfill of a second-generation Blockbuster space positioned in front of an Inland Real Estate Group-owned Publix center at 4422 Hugh Howell Road in Tucker, Ga. The company has taken space in many shopping centers throughout the nation as one of
two publicly traded dialysis companies in the U.S.

Orthodontic practices are also becoming more frequent in shopping centers across the country. OrthoSynetics, a dental practice management firm, operates a 1,600-square-foot location at a Walmart-anchored shopping center in Warner Robbins, Ga. The company currently has 350 locations across the U.S. with plans for continued growth.
Urgent Care facilities have also become popular nontraditional tenants including the 2,000-square-foot Alpha Medical Clinic, located in the Kimco-owned Market at Haynes Bridge at 3000 Old Alabama Road in Alpharetta, Ga. This is the first location Alpha Medical has opened, choosing Georgia to launch its business. Urgent care centers provide convenience for consumers by filling in a gap in healthcare for quick-service cases — including acute ear infections, high fever, broken bones and other non-emergency circumstances.

Nontraditional shopping center squeeze
Many regional and national tenants are capitalizing on the occupancy levels within a shopping center through the benefit of cotenancy clauses or other restriction agreements with the landlord. These agreements often reveal that only a certain
percentage of shopping centers can be leased to nonretail tenants. This is because nontraditional retailers frequently are a second- or third-tier backfill of space and don’t always generate a large amount of steady foot traffic.

The dichotomy between traditional and nontraditional retailers has forced landlords to find inventive ways to negotiate terms, which enables them to reduce the surplus of vacancy and maintain the presence of retail tenants. In many cases, this means
allowing existing tenants to pay rent based on a percentage of gross sales.

Usually, these regional and national anchors tend to restrict nonretail tenants in power centers. However, landlords are finding ways to negotiate those terms instead of settling for tenants on short-term leases. This is due to the increasing demand of
landlords to place office tenants in shopping center spaces to drive up NOI while also managing the surplus of vacancy.

Creating nontraditional tenant awareness
While this influx of nontraditional retailers may diminish the synergy desired by some tenants, having nontraditional tenants can be beneficial to other tenants by bringing potential customers closer to stores. This advantage also can provide a convenience
to customers. For instance, a patient can pick up a prescription from a pharmacy located in the same center as a medical office tenant, or the family member of a patient from one of these facilities can shop while the patient is visiting the facility. Landlords
have seen this mutual benefit to having nontraditional tenants in their centers.

Most landlords welcome the potential of a good credit tenant and a stabilized NOI. However, landlords are still cautious when choosing nontraditional tenants as they may deter the traffic of traditional retail co-tenants.

“Over the past few years, we have certainly seen an uptick in activity from nonretail tenants such as medical users in groceryanchored shopping centers,” says Andy McHargue, leasing specialist for Butler, Pa.-based Armstrong Development. “While
some national and regional retailers try to restrict the number of nonretail co-tenants, we as landlords, are concerned with striking a balance with our anchor tenants as well as stabilizing the NOI. As such, we are attracted to the credit and financial strength that come with tenants such as doctors, dentists and orthodontists.”

In the next year, continued vacancy, slow absorption rates and the need for landlords to drive up NOI will continue at shopping centers. This will create favorable conditions for nontraditional tenants. With the good credit reputation of the office medical
tenant, it will continually become more difficult for national tenants to negotiate co-tenancy clauses or other restriction agreements with landlords.

John Tennant is the senior director for Franklin Street Real Estate, specializing in landlord representation in the Southeastern/Georgia markets.


Can Unity Plaza Retail Be Saved?

Excerpted from Jacksonville Business Journal story.

Unity Plaza is inaccessible to customers who might have come on lunch breaks, said Cantrell & Morgan CEO Chris Morgan, and it didn’t benefit from anchor traffic from the nearby Fresh Market, either.

“For quick service or fast-casual you have to have great parking and great access,” Morgan said. “And if you don’t have that, then what you need is foot traffic and high-density multifamily nearby.”

Rob Zinn, an architect with Office of Architecture and Design, said that if 220 Riverside and Unity Plaza were rotated 180 degrees, it would have more connectivity with Brooklyn Station, in terms of sharing its parking and foot traffic. He added that another reason the development struggled was because it was a pioneer in Brooklyn. Not much had been built nearby, and surrounding parcels are still under development. The best bet to reactivate the space, he said, would be for the city to work on redeveloping Magnolia Street, adding parking and encouraging retail development along it. 

“It’s unfortunately just situated in a way that it needs help,” Zinn said. 

Going forward, whoever buys the property will have to take the development’s design into consideration when bringing in tenants.

Morgan suggested that perhaps some specialty medical services or professional services might work better — a very different approach from that of the original developers, who preferred to bring in restaurants.

Franklin Street broker Carrie Smith also suggested services such as nail salons or yoga studios could succeed in the space – but that restaurants could work, too, if signage was improved so people knew where to park.

Smith also said that mixed-use properties struggle in Jacksonville, despite taking off  in other parts of the country. However, she added, Hallmark must have reason to believe the project can still be successful, given that it is developing a similar mixed-use project, the 308-unit Vista Brooklyn, adjacent to 220 Riverside.

For full story, visit April 19th issue at


Trading places

Excerpted from Orlando Business Journal story.

Several Orlando-area brokers have been on the move in recent days

Here’s the latest: 

Tampa-based Franklin Street now is offering industrial services after hiring Larry Kahn as senior director of the regional division and Scott Edwards as senior associate for industrial services. Kahn was previously Chicago-based Cushman & Wakefield Inc.’s (NYSE: CWK) director of its rail advisory group. Edwards was previously regional sales manager for Winter Garden-based Dackor Inc. 

For full story, visit

Awards & Recognition Uncategorized

40 Under 40 – Justin Spiller

Excerpted from Jacksonville Business Journal story.

The Jacksonville of tomorrow will be shaped by the young business leaders of today. So what do they want that future to look like? This year, as we celebrate the young executives selected as the 2019 class of 40 Under 40 honorees, we asked them for one word that summed them up, as well as what they thought made the First Coast special and what they believe needs to be focused on for the area to live up to its potential. In this special section, join with the honorees in celebrating the area’s natural beauty and friendly people — and learn how they think the future of the region should be shaped.

Justin Spiller – Director, Franklin Street

What do you think the greatest challenge facing the First Coast is right now?

I believe the greatest challenge facing the First Coast right now is identity. What does Jacksonville want to be? We are a logistics hub, attract world class entertainment, have a history and culture that rivals few, but it does not feel like strengths of Jacksonville are properly conveyed to those outside of Jacksonville or appreciated enough within.

What thing about the First Coast are you proudest of?

While I do not think it is celebrated, appreciated or fostered enough, I am proud of the diversity of Jacksonville. The diversity of the population makes Jacksonville unique and full of different cultures. As a city, Jacksonville has to continue to find ways to highlight diversity as an asset and treat its diversity as the asset that it is.

For full story, visit


Did You Hear? Boyd Joins Franklin Street in Atlanta

Excerpted form CoStar News story.

Bob Boyd, a 30-plus-year veteran of commercial real estate who has run regional offices for major brokerage firms, has seen several real estate cycles in his career, and the longevity of the current one continues to impress him.

“I’m encouraged by what I’m seeing,” said Boyd, who is several months into his new job specializing in equity placement at commercial real estate services firm Franklin Street. “As long as the Fed keeps interest rates down, this cycle will continue for some period of time.”

Boyd is one of the bigger names in Atlanta commercial real estate. He’s a past president and chairman of the Atlanta Commercial Board of Realtors and founder and past chairman of the Realtors Commercial Alliance of the National Association of Realtors.

For more than a decade in the late 1990s, he served as the district manager of the former Grubb & Ellis’ Atlanta office. He left Grubb & Ellis, now part of Newmark Knight Frank, in early 2000 to kick off the corporate services group of St. Joe Co.’s Advantis Real Estate Services. Later, at JWB Realty Services, Boyd secured capital for investment in and development of retail, residential and industrial properties. In Doraville, Georgia, he helped finance Peachtree Pavilion, a 167,488-square-foot shopping center adjacent to the Assembly mixed-use development that is home to the new Serta Simmons Bedding headquarters. He has represented institutional and private clients including American Express, Capital One, Bank of Montreal and Reynolds Aluminum.

Boyd joined the Atlanta office of Florida-based Franklin Street as a director on its capital markets team in October, after working eight years at competitor Bullock Mannelly Partners. Boyd said he made the move to Franklin Street because of the additional opportunity it presents.

“It just made sense to bring my skills to a bigger group,” Boyd said in an interview.

Boyd’s been busy at his new job helping raise capital for development and investments. The challenge is finding ample opportunities for clients, he said. Investor appetite is especially high for student housing and senior housing and for certain retail, hotel-and-resort, office and industrial properties, he said.

“There’s plenty of money in the system, but there are fewer quality developments and fewer quality transaction opportunities,” Boyd said. He expects to complete his first deals at Franklin Street in the next two or three months.

As for Atlanta, the city’s population and job growth have flipped investors who in the past bypassed the metro area, Boyd said. “Now they’re asking, ‘What do you have there that we can take a look at?'” Boyd said.

For full story, visit


Aaron’s Chalks Up Record Revenue Even With Closing Stores

Excerpted from CoStar story.

Aaron’s Inc., the Atlanta-based rent-to-own retailer, reported record revenue in the first quarter, topping $1 billion for the first time.

The company said it had higher same-store revenue and growth in its subsidiary Progressive Leasing, which offers web-based, lease-to-own to-own financing for its stores and other retailers. The company also boosted revenue by buying  four more franchised stores, adding to the 152 it acquired last year.

But the retailer also closed 85 company-operated stores, drawing down the number of those stores to  1,230, leaving landlords with space to fill. With the purchase of franchise locations, the number of franchises drops to 369.

Rather than expand and build new stores, Aaron’s has been pursuing a strategy of closing underperforming locations and consolidating business into existing,  better-performing and larger stores. Bryan Belk, senior director for retail real estate investment  sales with Franklin Street in Atlanta, said Aaron’s hasn’t “added anything new in a while.”

According to retail brokers, Aaron’s locations are evenly split between multi-tenant retail centers and standalone locations. The standalone locations, in  particular, are bought and sold as net lease properties in which the tenant covers most of the  operating expense on the properties.

Belk said bringing in a new tenant could be a challenge for the closed locations because they tend  to be in so-called secondary areas with lower income demographics. There aren’t many national  retail options for such places beyond dollar stores, he said.

For full story, visit


St. Petersburg’s Edge District Getting More Retail, Residences

Excerpted from CoStar story.

A mixed-use retail and residential development featuring a historic bank building is close to completion in the trendy Edge District near downtown St. Petersburg, Florida, a burgeoning apartment market and one of the few walkable corridors across Tampa Bay.

Builders in major cities across the country have turned to urban developments as a way to alleviate traffic congestion, reduce dependence on cars and put residents close to jobs and entertainment.

“Millennials find that as being very ideal,” said Jack McCabe, a real estate consultant in Deerfield Beach, Florida.

Icon Central at 855 Central Ave. N. features 368 luxury apartments and more than 30,000 square feet of retail. About 18,000 square feet of the retail will be in the refurbished Union Trust Company Bank building. The entire project is being built by The Related Group, a powerhouse condominium and apartment developer based in Miami.

The first retail spaces will be ready for tenants by the end of May, and the apartments are  expected to follow at the end of June, said Alex Wright, senior director of Franklin Street, the  brokerage firm handling the retail leasing. No tenants have been announced.

For full story, visit street 2



Lease sparks office activity at Water Street Tampa

Excerpted from Business Observer story.

In all, Sparkman Wharf will contain 180,000 square feet of office space, along with 10 restaurants and a biergarten.

The building will be the first of three new office offerings in Water Street Tampa, along with 1001 Water St. and a 19-story building at 400 Channelside Drive.

SPP is expected to move into 30,000 square feet in Sparkman Wharf, the former Channelside Bay Plaza, when office renovations are completed later this year. The restaurants and biergarten debuted last November.

SPP CEO James Nozar describes Sparkman Wharf as “an entirely new working environment that is unlike anything else in the city.”

Among its unique features, the building has 40-foot ceilings.

Nozar adds the two-story project will provide a “well-rounded lifestyle that reflects what Water Street Tampa is all about.”

Jackson, too, says RSM was drawn to Water Street Tampa’s new hotels, entertainment venues and overall lifestyle for its younger workforce.

“Our employees like the idea of being able to walk to work, of having multiple restaurants all around,” he says. “The concept of being able to have a work/life balance at Water Street really kept screaming at us the more places we looked.”

Jackson says, too, that he expects relocating to Water Street will help the firm recruit new workers — both from the Tampa area and from its other offices around the country in states like Illinois and Minnesota.

Commercial real estate brokerage Savills Inc.’s Chicago and Tampa offices represented RSM in the lease, while Franklin Street and JLL negotiated on behalf of SPP at Sparkman Wharf and 1001 Water St., respectively.

For full story, visit


Franklin Street Forms Industrial Team in Orlando

Excerpted from Commercial Property Executive story.

Adding industrial sales and leasing to its services in Orlando, Franklin Street has named Larry Kahn as senior director of the regional branch. Kahn will work together with Scott Edwards, senior associate for industrial services. The two brokers will focus on landlord and tenant services and site selection for local, regional, and national clients throughout Central Florida and the southeast.

Kahn has 20 years of experience in industrial real estate. Before joining Franklin Street, he served as a director for Cushman & Wakefield’s Rail Advisory Group, specializing in rail-served industrial real estate. His previous position was that of vice president at CNL Commercial Real Estate.

Edwards also specializes in industrial landlord and tenant services. Prior to Franklin Street, he occupied the position of regional sales manager with Dackor Designs, a national manufacturer and distributor of continuous laminates.

“Central Florida is transitioning from being a spoke to an industrial hub for distribution, which makes this a special moment in time to do industrial real estate here,” said Kahn in prepared remarks. “Franklin Street has embraced the change by assembling technology tools to better address customer needs.” 

Kahn’s move to Franklin Street is the fourth in a series of recent executive transfers out of Cushman & Wakefield. Earlier this month, two of the company’s executives joined CBRE’s team in Tampa and another one joined the same team two days ago.

For full story, visit


Bob Boyd Joins Franklin Street in Atlanta from Bullock Mannelly

Excerpted from Connect Media News story.

Franklin Street expanded its capital advisors division with the addition of Bob Boyd as a director in the Atlanta office. He will specialize in providing customized equity capital strategies to clients for financing real estate assets across the Southeast.

The award-winning real estate professional brings more than three decades of commercial real estate experience in acquisitions, dispositions, financing, development, zoning, and management problem solving.

Boyd most recently served as managing director for Bullock Mannelly Partners in Atlanta, where he was responsible for placing equity financing for developers and investors. Other CRE career stops include JWB Realty Services, Trellis Companies, Advantis St. Joe, and Grubb & Ellis Company.

He also represented a wide range of institutional and private clients including American Express, Reynolds Aluminum, Acosta, McGuire Woods, Capital One, Kraft, Schwinn, Bank of Montreal and Harris Bank.

For full story, visit