Buildings that house Atlantic Station’s main cluster of shops and restaurants are expected to be listed for sale soon, another sign that metro Atlanta’s real estate market is heating up.
North American Properties and CBRE Global Investors, which bought much of the Midtown mixed-use complex after the recession, have talked to brokers about listing its retail town center following a successful turnaround effort, two people with knowledge of the situation said.
A sale would not likely alter the tenant line-up in the short run, though new owners could have their own ideas about how to keep the momentum going.
Atlantic Station, a mix of retail, residential and high-rise office buildings just west of the Downtown Connector, is one of metro Atlanta’s most visible projects. It also has a hotel and an IKEA store and hosts events such as an annual pro tennis tourney and Cirque du Soleil shows.
A sale of the retail core would be another sign of the region shaking off the recessionary doldrums, real estate experts said. It also suggests the owners believe there are suitors willing to pay a premium for the revived retail destination.
North American in a statement said it has “no concrete plans” at this time.
“We’re not surprised people are speculating that North American Properties would consider selling Atlantic Station,” the statement added. “The successful turnaround of Midtown’s premier retail-and-entertainment district is bound to attract the interest of owners and investors in this hot investment sales market.”
One of the complex’s office towers, at 201 17th Street, might also be listed separately, one of the people said, but the retail space occupied by Dillard’s, Target and IKEA are not part of the discussions.
North American and CBRE Global Investors acquired key portions of Atlantic Station for $173 million in late 2010, during some of the darkest days in Atlanta real estate.
Jim Jacoby, the noted Atlanta developer, turned a polluted steel mill into a glittering western extension of Midtown. Atlantic Station’s retail section opened to acclaim in 2005. The project brought the first IKEA to the region, and speculators and other homebuyers scooped up condos.
It remains one of the nation’s most ambitious brownfield redevelopment projects. But Jacoby’s financial backer in the venture, AIG Global Real Estate Investment Corp., was forced to sell its holdings after the financial crisis hit.
The project was only about 70 percent leased when North American and CBRE Global stepped in, and some merchants were behind on their rents. The complex was often being skipped over for trendier shopping spots, such as Buckhead and Virginia-Highland.
Some restaurants had taken on a nightclub feel and the community was dogged by a perception of petty crime and as a rowdy cruising and party zone. Property values tanked as condos tumbled into foreclosure.
The North American team, led by Mark Toro, tinkered with the tenant mix around stalwarts such as Publix, Dillard’s and Target. The group brought in local restaurateurs and higher-end restaurant and retail chains. They also launched a social media campaign to woo residents and shoppers.
North American also is the developer behind Alpharetta’s new mixed-use hub Avalon, and many of the development and customer service principles seen there were tested at Atlantic Station.
The owners stepped up security and created outdoor events to give the place a family-friendly vibe while also recruiting customers from outside the immediate region.
The retail space is almost completely filled, the office towers are also filling up with names such as financial technology company Worldpay US and streaming music service Pandora.
“There couldn’t be a better time to sell that asset and they bought it at the right time, too,” said Mac McCall, a regional managing partner in Atlanta for real estate services firm Franklin Street.
It was not immediately clear if additional Atlantic Station property, including several undeveloped parcels, will also be marketed. But the owners told the AJC in 2013 that they were contemplating future development and at the time it hadn’t been decided if that would be done by the current owners or following a sale to other partners.