Last week, Bob Simons, Hartman Simons partner, moderated
Bisnow’s Third Annual Atlanta Retail Real Estate Summit, which provided an in-depth
look at Atlanta’s improving retail market. Panelists included David Birnbrey,
chairman and CFO of The Shopping Center Group, LLC; Margaret Caldwell, managing
director of Jones Lang LaSalle’s Capital Markets Group; Jim Carlson, project
manager at Phillips Edison & Co.; Angelo Carusi, principal at Cooper Carry;
Jeannie Cave, vice president of real estate for Aaron’s Inc.; and Charlie
Heard, vice president of development at Sembler Development.
In today’s Four on Friday, we highlight four observations
made during the hour-long discussion.
• Capital Not Yet
Plentiful for Small Businesses. While lenders are wading back into the
retail arena, they have yet to begin loaning to smaller retailers, a dynamic
that is holding the sector back, Heard noted. Getting lenders to loosen the
flow of capital to more mom-and-pop-sized firms “would be a game changer,” he
said.
“That market does need to free up,” Simons added.
• New-Look Stores and
Centers. As the impact of e-commerce continues to grow, retailers are
likely to have sites that are part standard store and part distribution center,
Birnbrey predicted.
Merchants also are working harder than ever to create
in-store atmospheres that will lure consumers away from their smartphones and
computer screens, and into stores, Carusi noted. “We’re seeing more of a focus
on creating and embellishing the experiences that shoppers have,” he said.
During both the downturn and the proceeding slow recovery,
landlords also have turned to non-traditional tenants, such as urgent-care
facilities and dental clinics, to fill space in their retail centers, Birnbrey
added.
• Multiple Bidders.
Unlike just a couple of years ago, when retail properties – particularly grocery-anchored
shopping centers and Class-A malls – hit the market, owners are receiving
multiple quality bids, sometimes as many as six or seven, Caldwell said. “We’re
getting back to the days of 2006,” she said, adding that the active transaction
market should continue for a while. “I don’t see it slowing down.”
• Construction Costs
Still High. Even though the retail sector has performed sluggishly the past
few years, construction costs have not dipped correspondingly, Heard said.
“Costs of construction have not come down but revenues have. Costs somehow need
to come down … tenants can only pay so much. To me, that’s the big disconnect.”
For more coverage of the Retail Summit, read these editions of Real Estate Bisnow Atlanta: