Excerpted from May 2018 issue of Southeast Real Estate Business.
“How long will Atlanta’s retail boom last?” That is the multi-billion-dollar question everyone in the market is asking themselves now. Nobody knows for sure, although there are many valid reasons to think that Atlanta will sustain its growth in 2018 and beyond.
The state of Georgia has placed a strong emphasis on drawing technology companies to the state, and Atlanta’s tech boom has catapulted the city to the front of the race for Amazon’s $5 billion HQ2 project. The city already boasts the world’s busiest airport, which makes it easy for any company to relocate here because they can directly connect to anywhere in the world. Most recently, Facebook announced it will build a sprawling data center campus at Stanton Springs, about 40 miles east of Atlanta, and NCR Corp. recently opened its new headquarters campus in Midtown.
The emerging tech community includes startup hubs such as Atlanta Tech Village, Switchyards Downtown Club, the upcoming Coda project at Tech Square and Advanced Technology Development Center, an affiliate of Georgia Tech. With elite local colleges like Georgia Tech, Emory University and the state’s flagship school, the University of Georgia, about 60 miles east in Athens rapidly producing new graduates, the city is very capable of attracting and growing talent in the high-paying, fast-growing tech sector.
Georgia’s thriving film, TV and video production industry is also driving economic growth across the state, with many of the projects taking place in Atlanta. The entertainment industry spent $2.7 billion in fiscal year 2017 and had an economic impact of $9.5 billion on the state, according to the Georgia Department of Economic Development.
Evolution of Intown Retail
Massive new investment projects are keeping pace with the city’s booming retail and restaurant market. In-town Atlanta, or “ITP” (inside the perimeter), has experienced a surge of new construction in recent years. The early stages of Atlanta’s post-downturn development boom centered around transformative projects along the then-fledgling Atlanta BeltLine, such as Ponce City Market and Krog Street Market, as well as the beginning of the West Midtown explosion with Westside Provisions District. Fast-forward to the present, there are almost 100 different projects under construction or recently completed in or in the areas surrounding Midtown alone.
Ponce City Market, which features about 1.1 million square feet of shops, eateries, apartments and office space, has been an enormous success in many ways since its opening in 2014. The next phase of the development will include hotel and residential towers, along with a separately owned Kroger and additional office space that will be adjoined by the BeltLine. While PCM is truly a scion for Atlanta’s food and social scene, the jury is still out on how its retailers and food hall tenants will continue to perform into the future.
Midtown’s Colony Square, an iconic mixed-use development and sub-district, is another new project receiving major attention. Luxury cinema and dining concept iPic Theaters has signed a lease to anchor Colony Square and will bring its movie-going experience and food and beverage program to the Peachtree Street hub, which is under redevelopment by North American Properties. The iPic theatre will feature nine screens alongside a 6,700-square-foot bar and restaurant, with a menu designed by James Beard award-winning chef and restaurateur Sherry Yard. The developers have also unveiled a new virtual reality app that users can download to take tours of the site, with the first phase scheduled to open this summer.
Rise of Suburban Retail
While intown retailers could claim to hold an advantage in terms of trendy innovations, the surrounding OTP (outside the perimeter) areas have seen a similar burst of growth and expansion. Leading the way has been Avalon, an 86-acre mixed-use development with more than 500,000 square feet of retail, lodging, theatre, office and residential space. Phase II, with additional business and residential space, opened last year. Avalon’s success has been important in how developers look at Ga. 400 and the way it continues to be a vital artery bringing the Atlanta area’s wealthiest suburban residents together with the shopping and dining experiences they desire.
Another transformative project, The Battery Atlanta, has recently seen a new round of restaurant openings in its second season, with another round to come over the next several years with more retail, restaurants, and a newly announced Silverspot Cinema movie theater. The 60-acre development, flanking the Atlanta Braves’ new stadium SunTrust Park, includes retail shops, restaurants, for the time being one office tower, a newly opened Omni Hotel, the Coca-Cola Roxy venue, residential units and Comcast NBCUniversal’s Southeast Region office headquarters.
About the Authors
As Senior Director focusing on retail tenant representation in Franklin Street’s Atlanta office, Greg Eisenman brings over a decade of experience to the retail real estate services business.He can be reached at [email protected]
As Senior Director specializing in retail landlord representation in Franklin Street’s Atlanta office, Mariah Klein focuses on property and location analysis, marketing and leasing strategy, and negotiation services for retail property owners across the southeast. She is a former International Council of Shopping Centers (ICSC) Georgia state director with over 21 years of professional retail leasing experience. She can be reached at [email protected]
As Senior Director focusing on retail tenant representation in Franklin Street’s Atlanta office, Sterling Hale is skilled in all facets of financial analysis for investment property and producing income streams and brings a wealth of experience into the site selection process. He can be reached at [email protected]