ATLANTA—Thinking about going to ICSC Atlanta Oct. 26-28? What should you expect?
We asked Justin Berryman, director of real estate services for Franklin Street, for his take. He told us he’s expecting developers to have an increasingly larger presence than previous years. That’s because of the increased demand for space from new tenants coming into the market or expanding.
“The retail market in Atlanta is extremely active, specifically with the aggressive expansion of fast-casual restaurants throughout the region,” Berryman says. “Almost every day I get a call from a broker working with a different fast-casual concept that is interested in opening locations in the market.”
Berryman says retail brands are all competing for the same limited space. That, in turn, is increasing rental rates and is spurring new development activity to satisfy the current demand. What’s more, he says, established tenants in the market are looking to expand, along with new-to-market tenants coming in from the West Coast, Midwest and Northeast looking to take advantage of the positive momentum in the Southeast.
“We expect the show to also include some developers who have been sitting on the sidelines because they couldn’t get the financing or didn’t have enough space pre-leased to make a new development work that are now returning to the arena,” Berryman says. “The increase in construction and land pricing has made it challenging to get the preferred returns on retail development as before, but the aggressive expansion of some tenants create competition to help drive rental rates to make the rewards worth the risk that is inherent in development.”
Finally, Berryman says, specialty grocer-anchored centers and smaller two-to-four tenant strip buildings should encompass the majority of new product coming online and he anticipates this trend continuing for at least the next two-three years. He looks forward to an ICSC event filled with energy, enthusiasm, and individuals looking to take advantage and make deals happen while the current state of the retail market in the southeast remains positive.