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 54 of 56

54 • October 2016 • Southeast Real Estate Business Go and Kohl's, among many others. Grocery Changes The Atlanta market has seen only slight changes in the mainstream grocery landscape. The area's two main contenders — Kroger and Pub- lix — continue to remain solid area favorites, with smaller players like Ingles and Aldi also established in the market. Kroger has plans to add sev- eral new stores in the market, includ- ing one along Piedmont Road in the Lindbergh/Buckhead area in a Fuqua Development project and a new store on Ponce de Leon Avenue to replace a store being razed to build a mixed-use development known as 725 Ponce, that will be developed by New City LLC. Where the action has been in the market is on the specialty grocery side. Whole Foods Market has had a strong presence in Atlanta for the past 10 years, and continues to expand in the market. The company is opening at Fuqua Development's Kennesaw Marketplace in Kennesaw, and an- other store in the Brookhaven market, just northeast of Buckhead. A third store is also underway in Midtown. Whole Foods is also underway with the first 365 by Whole Foods in the market, to be located in Decatur at S.J. Collins' North Decatur Square project. Sprouts has entered the Atlanta market over the past two years, open- ing a number of stores in suburban and urban infill markets. The retailer now has 12 stores in the market. Ashe- ville, North Carolina-based Earth Fare has also opened store in Atlanta, Cumming and Peachtree Corners. Trader Joe's, also active in the market for a decade, now has six stores in the Atlanta area. The Fresh Market also has a strong presence in the market. n RETAIL from page 45 new headquarters building has also set a great example for entrepreneur- ial users that want to work close to home in the Sandy Springs corridor and are looking for an alternative to Buckhead and Central Perimeter's office space. West: Halpern's corporate head- quarters is a 25,000-square-foot, two-and-a-half-story building. In the process of constructing it, we've re- ceived call after call from folks who wanted to know if we had extra space to lease. We weren't inclined to do that, but that interest that we received has sparked our interest in looking down the corridor to build something comparable that could be leased out to smaller entrepreneurial companies. That's not our primary business so we're taking baby steps in that direction, but the feedback we received has been very encouraging. Kaplan: When we started Square One three or four years ago, we went out to raise money and it was an in- credibly difficult experience to say the least. They didn't have the vision and didn't see the potential in Sandy Springs. George Morgan brought us this deal. When Sandy Springs incor- porated in 2005, it totally changed the dynamic and direction of the city. Kaplan Residential believed in the vi- sion and we funded the project our- selves through the beginning stages of construction. Equity entered the picture about 12 months ago, a little after Mill Creek announced its devel- opment and The Cliftwood started construction. Our equity partners were happy to come on board. The fact that all of us here could get fund- ing for our projects speaks to the potential in where Sandy Springs is going. The city has gone over its tipping point and now it's off to the races. There's a ton of potential here. Misiura: As we started The Clift- wood and The Plaza and we saw more apartment projects being an- nounced, we never got scared. We thought it was a necessity for the vi- sion of Sandy Springs. Downtown needs critical mass if it is going to realize its vision. Competition in our business, especially in this environ- ment, raises everyone's projects by creating a living environment that people want to be a part of. The com- petition and critical mass enhances everything. Friedmann: We're all invested in each other's success, and Mill Creek is looking forward to seeing all of the current development come to fruition. We're a long-term holder with State Farm on this asset, a key partner of ours, and they're equally as excited about the future of Sandy Springs. Cadranel: The city is doing a good job of managing future growth. They saw a need for immediate housing in a very mature area. More important than anything is that every develop- er here is in it for the long haul. There are no merchant builders here, ECI and Arris Realty are long-term be- lievers in what we're doing and Selig Enterprises, a multi-generational steward of great properties, just landed across the street from us on Carpenter Drive. We're not building for the next 18 months, we're build- ing for the next 18 years and beyond. Arris Realty Partners is co-developing The Cliftwood with ECI Group. The company is also developing adjacent retail space totaling 27,000 square feet known as The Plaza. Miami office believes that Florida will not experience any substantial impact as a result of Brexit. "We are witness- ing the immediate effects of investors' aversion to uncertainty. The fact that we are seeing UK commercial property funds implement lock-ins to stem the disposal of assets spurred by the cur- rent uncertainty does not necessarily signal a prolonged erosion of one of the most robust markets on the planet." Ed Redlich of Miami-based Com- Real and past president SIOR Florida, said the break up might mean good news for Florida. "Many investors who have been waiting on the side- lines to buy commercial property as- sets may look to Florida as a safe and stable market. According to Florida Realtors, buyers from the UK make up a fair amount of all foreign buy- ers in metro areas, such as Orlando (28 percent), Tampa (19 percent) and Palm Beach (12 percent). Other EU countries such as Germany, Sweden, France, Italy and Czech Republic are also known to be frequent investors in Florida real estate. We might ex- pect there to be some acquisitions and dispositions over the next few years thanks to the Brexit shake up." The U.S. commercial real estate market could see an influx of capital coming from the UK, and from oth- er countries whose investors might pull capital out of British properties. Florida SIOR chapter president Mary Clare Codd of Colliers International of Tampa office added, "When there is uncertainty in the market, people will take their cash and place it some- where else. The U.S. is a safe haven so Florida could potentially see a signifi- cant flow of capital out of the UK and other countries into the U.S. property markets, especially gateway cities, which could drive values up." In 2015, the U.S. multifamily sec- tor pulled in $16.3 billion in foreign investment and investors from Great Britain comprised $2 billion of that to- tal, according to RCA. If uncertainty continues, that trend could develop further. Interest rates in the U.S. also make Florida very attractive to investors. According to the U.S. Department of the Treasury, the 30-year Treasury yield plunged to a record low of 2.098 percent before recovering to 2.12 per- cent. And the 10-year Treasury closed below 1.4 percent for the first time, falling to 1.367 percent. The continu- ing European market uncertainty, declining British pound and strength- ening of the U.S. dollar makes it less likely that the Federal Reserve will move rates up or take other tighten- ing measures this year. With change comes opportunity and that may have promising implica- tions for the Florida commercial real estate market. SIOR Overview The SOCIETY OF INDUSTRIAL AND OFFICE REALTORS® is the leading professional commercial and industrial real estate association. With more than 3,000 members in more than 630 cities in 34 countries, SIOR represents today's most knowledge- able, experienced and successful com- mercial real estate brokerage special- ists. SIOR has certified thousands of members with the prestigious SIOR designation, a professional symbol of the highest level of knowledge, pro- duction, and ethics in the real estate industry. Real estate professionals who have earned the SIOR designation are rec- ognized by corporate real estate exec- utives, commercial real estate brokers, agents, lenders, and other real estate professionals as the most capable and experienced brokerage practitioners in any market. SIOR designees can hold the following specialty designations: industrial, office, sales manager, ex- ecutive manager, or advisory service. SIOR also consists of associate members who include corporate ex- ecutives, developers, educators, and others involved in the commercial real estate industry. A professional affiliate of the NATIONAL ASSOCIATION OF REALTORS®, SIOR is dedicated to the practice and maintenance of the high- est professional and ethical standards. SIOR maintains a commitment to busi- ness and industry by providing out- standing professional services, publi- cations, and educational programs. n FLORIDA from page 43

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