News from The Shumacher Group: Fall/Winter 2015

by Harold Shumacher


Volume 28 * Number 3 * Fall/Winter 2015

Welcome to the 28th year of Atlanta Restaurant Real Estate News. The information that follows is compiled from a variety of industry publications, restaurant insiders and personal observation.

Since 1987, we’ve been distributing this publication to Atlanta’s leading real estate developers, landlords, brokers, restaurant owners and operators and vendors to the food service industry. It’s provided us an excellent means to keep in touch with our core audiences and make them aware of who we are and what we do. Your thoughts and comments are welcome.

Please contact me at harold@shumacher.com

A Stroll Down Memory Lane

Forty five years ago this past Labor Day, I arrived in Atlanta, a freshly scrubbed college graduate about to embark on a career teaching high school in the City of Atlanta. It would have been hard to imagine at that time that I would be spending the next almost thirty years in the real estate business.

Much has changed. In 1970, the population sign in front of the Darlington apartments on Peachtree Street had just topped the one million mark – an event highly lauded and publicized on the front pages of the Atlanta Journal and The Atlanta Constitution. For those who may not know or remember, Atlanta at one time had two major newspapers, albeit sharing the same publisher, which at least created the illusion of competition.

The City of Atlanta claimed approximately 500,000 residents, about where the city population sits today, while the surrounding area had 500-600,000 citizens. Today, the explosive growth in the suburban areas has pushed metro Atlanta to over six million residents, the vast majority arriving in the past few decades. In fact, Atlanta may have the singular distinction of being one of the fastest growing cities in the history of the world with a five fold increase in population in less than 40 years. Far flung outposts like Cumming, Carrollton, Conyers and Locust Grove are now considered part of the metro area and the growth shows no sign of abating. Predictions show Atlanta with anywhere from eight to ten million residents by 2030.

The composition of the population has also changed. In 1970 Atlanta was essentially a bi-racial city; black and white and black politicians were few and far between. Maynard Jackson’s election, in 1973, as Atlanta’s first black mayor was a harbinger of significant political and social change throughout the metro area. Today, Hispanic and Asian populations are the fastest growing ethnic minorities. Atlanta soon, like the rest of the country will be a majority minority city. In fact, Gwinnett County, perhaps the most diversely populated county in Georgia, is already at or very close to that tipping point.

The commercial growth has been no less spectacular. Consider this: in 1970, virtually all the major banks, law firms and other professional firms were within walking distance of Five Points in downtown Atlanta. Midtown, along Peachtree Street from the Fox Theater to Pershing Point, was primarily a row of single story buildings featuring everything from peep shows to stores selling hippie clothes and paraphernalia. Long haired young people, from throughout the Southeast and points further walked the streets, some hawking alternative newspapers, recreational drugs, or general peace and love.

Buckhead was a quiet neighborhood. The main attraction was a Sears store at the intersection of Peachtree, Roswell and Paces Ferry. Lenox Square was built, but still had a Colonial grocery store as an anchor. Perimeter Mall, Cumberland, Gwinnett, if thought about at all, were glints in some dreamy eyed developers’ mind. The notion that metro Atlanta would one day claim fifteen regional malls would have been heartily laughed at.

The restaurant scene, what there was of it, mainly constituted a large number of “meat & threes”, the most prominent of which, Mary Mac’s, remains today. Better restaurants could be counted on two hands with a few fingers left over. Gene and Gabe’s, the Coach and Six, the Ambassador, Chateau Fleur de Lis, the Midnight Sun and Fan & Bill’s passed for fine dining. Ethnic restaurants were few and far between, and those that did exist stuck to the tried and true- dumbed down American versions of their native cuisines, often with sweet overtones to accommodate the Southern palate.

The daily newspaper did not review restaurants, at the time, and the newspaper’s food section generally consisted of profiles of society events and recipes for re-treaded southern classics with an occasional ethnic dish added for diversity.

It may be hard to believe that today as a Chinese, Mexican or Italian restaurant can be found in every neighborhood center and highly lauded chefs operate a large number of specialty restaurants, Atlanta has created one of the most diverse dining scenes to be found in the United States. Excepting a few hub cities like New York, Chicago, Los Angeles, San Francisco and perhaps Washington D.C., Atlanta’s local eateries easily compete with, and often top most other cities you could name.

Numerous specialty food stores, gourmet grocers and large ethnic market can be found in every nook and cranny of the metro area. Several dozen neighborhood farmer’s markets are open every day of the week and some offer year around hours. Atlanta has truly become a bona fide foodie town.

Southeast Real Estate Business Round Table Highlights

Every year, as a prelude to the Southeast Ideas Exchange, France Publications gathers several dozen Atlanta area real estate owners, developers, landlord and tenant brokers for a spirited one to two hour conversation on the state of the industry. This year we were fortunate enough to be included. Here are some quick takeaways. (For more details be sure to take a look at Southeast Real Estate Business)

There is a growing confidence in economy the past few years, leading to more consumer spending. As the economy continues to strengthen, retail development is on the uptick and there is no shortage of capital, whether for new development or acquisitions. If anything, the competition for existing A grade properties is as keen, or even keener than it was in the 2005-2007 period. There is also a growing interest in B and C properties (the value add premise) and secondary and tertiary markets.

Among the growing segments, food and restaurants, with food halls (think Krog Street Market in Atlanta) among the newest creation to capture developer’s fancy. Upscale restaurants (sometimes labeled “polished casual”), fast casual, and higher tone ethnic spots are also popular favorites. On the retail front, small artisanal shops with hand crafted boutique items are popular but not easily fundable so the tried and true super markets, big boxes and soft good stores still drive retail development.

The biggest development news in Atlanta is the pending opening of additional shops and restaurants at Ponce Market. The office portion of the project is in full gear and, in fact, is generating additional office development in the area. Residential units are being leased and occupied as quickly as they become available. With over 20 restaurants debuting in the next few months, the project should prove a popular destination. When the hoopla subsides, the real question will be sustainability. Is there enough population living and working in the area, along with curious visitors to keep the project viable. We think the answer is yes, but time will tell.

The next retail corridor of interest could be what we call the BCD Corridor: Brookhaven, Chamblee and Doraville. The re-development of the former GM Plant, at I-285, between Buford Highway and Peachtree Industrial, has the chance to be a transformative undertaking with its proposed mix of office, retail and residential development adjacent to the Doraville MARTA station. At the south end of the corridor, MARTA just announced a development team to take on a similar, but much smaller scale project on underutilized land adjacent to the Brookhaven Station. In addition, there will be a new Whole Foods anchored development, roughly halfway between these two book-end projects in the heart of Chamblee.

Surprising Stats about Pizza Eaters 

Ask most people to describe a pizza customer and the clichés fly quickly: young, male, prone to excessive sports watching and beer consumption. But according to the Center for Generational Kinetics, that’s not the case. According to a recent study, 63% of pizza lovers (those who both bought frozen pizzas and ordered from restaurants) were women… but that  may be skewed by women doing most of the family shopping. The majority (59%) were 35 or older and most exercised at least twice a week. Perhaps most surprising: 78% claimed to have soft drinks with their pies rather than beer.

Recent Transactions for the Shumacher Group include…. Our thanks to all of you.

Sale of the following Businesses:

  • Dive Bar – Atlanta
  • Joe’s to Go – Lilburn
  • Grindhouse Killer Burgers – Sweet Auburn Market
  • Two unit Smallcake Cupcakery – Macon, Ga

Real Estate Purchases:

  • Former Johnny Carino’s, 2707 Watson Boulevard in Warner Robins to La Parilla
  • Purchase of former Ryan’s, Hwy. 138 Stockbridge by Bay Breeze Seafood

Leases of the following:

  • Second Sublime Doughnuts location Briarcliff/North Druid Hills Rd.
  • Amara Restaurant, 870 North Highland Avenue (Inman Park)
  • Five Church, Colony Square (Midtown)
  • Mulana 33 Peachtree Street
  • Lease Renewal Agatha’s, a Taste of Mystery Theater – Peachtree Center
  • Zama, West Village Smyrna
  • Bojangle’s one acre Spout Springs & Friendship Roads Flowery Branch, GA

Land Purchases:

  • Purchase of 2 acres, Chastain Rd Kennesaw, by Municipal Gas Authority of GA
  • Sale of 2.6 Acres Forest Parkway for Medical office development

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