Southeast Real Estate Business

OCT 2016

Southeast Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in the Southeast United States.

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Page 52 of 56

52 • October 2016 • Southeast Real Estate Business beginning of leasing the retail space we weren't getting a lot of traction because we were asking a little higher rent than the market was used to. As time has progressed, and a few local operators have opened high-end res- taurants and shops, we have gotten more traction. We've pre-leased three of the four retail units, roughly 7,000 square feet is leased up. We have a high-end restaurant on the corner that I can't announce quite yet. Our last available retail space has gotten a lot more inquiries from restaurant us- ers, but we have an exclusive agree- ment with the current restaurant that they'll be the only restaurant there. It speaks to the demand for restaurants there and the ability for them to pay a higher rent. Friedmann: When complete, these projects will satisfy the current de- mand. Once all the communities de- liver, the influx of the young profes- sional demographic begins — craving this urban-inspired, mixed-use com- munity living and active lifestyle. We're heavily focused on creating communities that aren't only a desti- nation for residents, but also for visi- tors. Horstemeyer: Our project, Atwa- ter, is on the luxury end. We have 88 for-sale units, with 45 being detached single-family homes and 43 town- homes. We released 16 comprising half single-family, half townhome and they all sold immediately. The aver- age sales price for the single-family homes is $780,000 and $660,000 for the townhomes. It's not as big of a differ- ence as we expected. We have a long waitlist for our next release. We're in the southwest corner on a parcel with a lake. It's about 16 acres, there's four acres of green space and a creek. It's a dense site, but it has plenty of green. What's so interesting is our range of buyers. They're mostly local people who are downsizing, which is what we expected. Three of the 16 buyers are in their twenties and are single, presumably with some parental help. They're making that investment and are excited to be in that area. It's all about location with the site's proxim- ity to Dunwoody, Central Perimeter and Buckhead and being within walk- ing distance of City Springs. Hagley: Our project is attracting the upper end of the Millennial renter cohort. What we're finding is there's a renter of choice trend. It's an older demographic made up of downsizers, empty nesters, divorcees, single par- ents or dual income households. They want what you find in luxury resi- dential communities, but they'd also maybe prefer to own a lake home or beach house and they don't want the ball and chain of a mortgage. If they're not happy they want to be able to pick up and move or even travel, but at the same time they want the amenities and finishes seen in luxury homes. We've captured that finish level. France: What's the average rent in these projects? Hagley: It depends on what submar- ket you're in, but in Sandy Springs we were at $1.65 to $1.70 per square foot about three or four years ago. Nowa- days we're probably in the high $1.80 to $1.90. Kaplan: We're touching $2 per square foot, and no one has ques- tioned the rates. They're just con- cerned on when the building is ready because they want to move in. Cadranel: We and the other multi- family developers in the City Springs district are all building luxury resi- dences. They all have stainless steel appliances, granite countertops and hardwood floors. And we're all in an arms race to create the best amenity package. For the most part, we're all one- and two-bedrooms, and the de- mand for three-bedrooms in Sandy Springs is going to make us all wish we had more inventory to offer. We're all also redeveloping what has been a very mature and built-out area and trying to put humpy dumpty back together again. Before we began The Cliftwood, our site was 100 percent buildings and asphalt. Once we're done, 20 percent of that same property will be dedicated to green space, and Oz Friedmann's project is also bring- ing more greenery to the infill area. Our units average 1,000 square feet and our rents are going to average $1,800 to $2,000 per month. Every- one's units at this table will compete on quality and amenities with any- thing in Buckhead, but to live in Buck- head will cost $6,000 to $7,000 more a year. Our residents value a commer- cial neighborhood, whereas Central Perimeter is dominated by businesses and doesn't have the neighborhood feel Sandy Springs offers. Collectively, our six projects represent about 1,500 multifamily units and about 60,000 square feet of complimentary restau- rant and neighborhood-oriented re- tail. We're not trying to compete with Central Perimeter's retail, we're try- ing to provide a place that currently doesn't exist in Sandy Springs and better serve its area residents. The res- taurants that are here are doing great and the more restaurants and synergy we can bring the better they will all do and the more walkable the commu- nity will become. Hagley: If you add it up between all of our projects, it's about $500 million worth of development in a 1.5-mile radius, and that's not to mention the Mercedes-Benz USA headquarters and State Farm nearby and all the other projects coming. That's also not to mention the City of Sandy Springs' share of the City Springs project, which is approximately $250 million. France: What's the timeline of your projects opening? Friedmann: For Modera Sandy Springs, pre-leasing is slated for early 2017, with initial move-ins beginning spring 2017. Retail is targeted to de- liver shortly after first units. Kaplan: Square One is the closest to completion. We'll have our restaurant open on the corner and delivering most of our units in November. We're pre-leasing right now out of North- side Tower across the street and things are going well. Misiura: The Cliftwood will have our first units delivered right around the end of the year, with final units de- livered in May 2017. Poole: For City Springs we're hold- ing tight at December 2017. Cadranel: There hasn't been any significant new office projects deliv- ered to this market for some time, and I'm delighted the city is building its 100,000-square-foot municipal office and performing arts center and Selig is investing in improving the area's existing offices. Halpern Enterprises From left, Jo Ann Chitty of Selig Enterprises Inc. and Jerome Hagley of Carter. Selig and Carter are the private developers involved in the massive City Springs development. Michelle Horstemeyer of PulteGroup, formerly John Wieland Homes and Neighborhoods, listens in during the roundtable discussion. Mill Creek Residential is underway on Modera Sandy Springs, which will feature 340 apartment residences atop 25,000 square feet of retail space.

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