Peach Cobbler
Oct 1, 2007 12:00 PM, By Elaine Misonzhnik
“I think the larger retail and mixed-use projects that are already under way and have tenants committed to them will continue to move forward,” says Wammock. “But we'll probably see some slippage on smaller unanchored centers.”
When it comes to the Midtown Mile, the development will likely do wonders for Atlanta's new image by putting retail on the street level, but Lefkoff thinks it might be a while before the city's residents get used to thinking of Atlanta as a walkable city. Getting to a transit station without a car still poses a challenge, he notes, and one of the reasons Atlantic Station remains overlooked is that people don't notice its shops from the road.
“I am an Atlanta native and this has never been a walking, pedestrian city,” he says. “Being more environmentally aware is something we are still getting used to. I am sure the Midtown Mile will be a tremendous success, but it's a matter of being patient.”
As rattled by the current credit crunch as anyone in the country, Atlanta's investment sales brokers remain apprehensive. In the second quarter of 2007, the city's retail properties traded at an average cap rate of 6.9 percent, above the national average of 6.3 percent, while posting an average price of $168 per square foot, 11 percent below the national average of $182 per square foot, according to Real Capital Analytics.
“The uncertainty in the debt market is affecting some of our buyers, so it's a wait-and-see scenario,” says Del Creviston, senior investment advisor with the Atlanta office of brokerage firm Sperry Van Ness, who adds that he still managed to close three deals within one week this month.
“Cap rates have been on the rise 100 basis points to 200 basis points over the last 60 days,” Creviston says.
Demographics
Market statistics bear this out. In the second quarter of 2007, sales of single-tenant retail properties rose 90 percent compared to the velocity experienced during the same period last year, according to Marcus & Millichap. Cap rates, however, remained close to last year's low-7 percent range.
Population in 2000: 4,247,981
Population in 2007: 5,305,098
Change 2000-2007: 24.9%
Households in 2000: 1,554,154
Households in 2007: 1,943,480
Change 2000-2007: 25.1%
Source: Pitney Bowes MapInfo
Unemployment
(As of July 2007)
Atlanta Metropolitan Area: 4.7%
Georgia: 4.9%
National: 4.6%
Source: Pitney Bowes MapInfo
