Welcome to the 29th 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.
This past May marked the 30th time I’ve trod the cavernous Las Vegas Convention Center at the International Council of Shopping Center’s annual trade show-now known as RECON. The old adage that the more things change the more they stay the same comes to mind.
I always enjoy seeing the eager faces, lined up to enter the hall early on Monday morning, convinced this is the year they’ll have a great show. By late Tuesday afternoon, many of those have already left early, returned to their respective quarters and begun the nightly ritual of socializing far too late into the evening.
If there was a singular mood, at least to us, it’s cautious optimism. Veteran observers like me have seen several previous cycles, with their inevitable highs and mandatory lows. Depending on where you live the economic recovery has been underway for five to seven years and seems destined for a readjustment. There’s already hints of that in Metro Atlanta as several announced Multi-Family projects in Buckhead and Midtown have been shelved.
In the metro Atlanta area, grocery stores have replaced big box developments as the expansion drivers, especially with the announced arrival of Lidl, Whole Foods 365 and Sprouts. As the Big Box segment continues to consolidate, or in some cases, like Sports Authority, disappear altogether, we don’t anticipate very much of that kind of development in the future and can’t envision a scenario with another regional mall in the metro area anytime soon.
Restaurants remain a hot segment. Anecdotally it’s being reported that over forty percent of the retail deals in the country in 2015 were restaurant related. Problem is no one seems to know if that’s square footage, dollar value, or number of transactions but by all local indicators it remains a strong segment.
One trend we have noted is a growing number of “intown” chefs finding success in the suburbs-most notably Doug Torbush’s Seed and Stem, in East Cobb, and Jay Swift with the recent opening of Noble Fin in Peachtree Corners. As the metro area continues to expand we see this as a growing trend, especially in cities with established retail/restaurant nodes (like Decatur, Roswell, Woodstock, downtown Alpharetta and to a lesser extent Norcross, Lawrenceville and Duluth.)
I always consider architects, engineers, and surveyors, along with brokers, to be the canaries in the coal mine regarding future projects and what’s about to be. It’s interesting, at least from a small sampling, that much of the work in these arenas is on existing projects being re-invented-like the pending changes at Colony Square in Midtown Atlanta-rather than ground up construction.
Financing remains abundant, cap rates are settling in but the number of investors, especially from the West Coast, shopping about the Southeast remain at or close to all time highs. The most popular product: free-standing, single tenant retail and restaurants.
Prior to and during the show there’s no shortage of news coverage, articles, position papers etc. released. Two that we read of particular interest had to do with the social economics of on-line vs. in-store purchases and parking in the future.
The Simon Company sponsored a just released study, suggesting that the “real cost†of on-line shopping is far more expensive than anticipated. Based on the combination of man hours, packaging materials, shipping costs, the significant number of returns by on-line shoppers, creating and managing the computer technology, returning goods for re-stocking, etc. it’s “cheaper” to shop in bricks and mortar locations, especially if shoppers consolidate their visits (buy more on each occasion) and shop in groups. The other takeaway is that going forward it’s not a case of either/or… successful retailers will combine on-line and in-store shopping.
Another story of interest was in the May issue of “Shopping Center Business”, analyzing the parking needs of current shoppers and the potential impact of driverless cars, services like Uber and Lyft and use of transit. The quick takeaway-imagine if Lenox Square could suddenly free up 20 percent of its current parking area and have the opportunity to develop additional density. Multiply that across the country and there is significant opportunity in the not too near future.
Our observation is that the remainder of 2016 should be active. That the projects underway, especially closer to the city center should be successful at garnering tenants and that by mid 2017 there’ll be an adjustment. That said, electoral politics especially in a Presidential election year can have an impact.
(Way Inside the Beltway)
Most people who visit Washington D.C. do so with a tourist’s lens; walking the National Mall, stretching from the Capital to the Lincoln Memorial, visiting the various Smithsonian Museums, admiring the architecture or riding the aging-but-efficient metro system. There is also a different Washington: one fueled by the adrenaline of politics and power. The Washington of government, research, policy… and occasionally action. That’s the Washington we visited as part of a delegation of 50 Atlantans affiliated with Interfaith Community Initiatives the sponsors of the World Pilgrims.
Walking about Capitol Hill or in the Dupont Circle area, laden with Embassies, Consulates lobbying firms and headquarters of Trade Associations- you get a different feel of the city and it’s pulse. Sharply dressed young people – and some not so young – striding about purposely, determined to save the world (or perhaps just their own jobs and agendas). No matter what your political or social beliefs it’s reassuring that there are passionate people working for a wide variety of causes.
Arriving a few days early we had time to enjoy some of the city’s myriad attractions. Nowhere has a corner on patriotism, but Washington D.C., on Memorial Day, may come close… as the long line of veterans, going back to a handful from World War I right on through the recent campaigns in Afghanistan and Iraq, wind their way down Constitution Avenue in the largest such parade in the country. Marching bands, flag waving majorettes and large, patriotic themed floats abound.
Just off the parade route are a variety of highly recommended Museums including the United States Holocaust Memorial, the Newseum, a paean to free speech and the First Amendment, the National Building Museum, the Renwick – minutes from the White House – and the National Museum of the American Indian, which features one of the best cafeterias we’ve been to anywhere.
On the dining front we’d also recommend Lebanese Taverna Restaurant, in Woodley Park, Busboys and Poets, in the quickly gentrifying Tompkins Park area and long time organic stalwart Nora’s Restaurant.
If time permits, take a ride to nearby Annapolis, a charming harbor side town and the home of the U.S. Naval Academy. A tour of the historic institution is a fascinating look into the day-to-day lives of the 6,000 cadets who reside in the world’s largest dormitory (some 33 acres of building including a dining hall for 2,000.)
Congressman John Lewis’ desk in Washington D.C.
Food for Thought – According to Technomic Inc.’s top 500 Chain report, McDonald’s U.S. Sales, of $35 billion, is greater than the next three on the list combined (Starbuck’s Subway and Taco Bell.) Atlanta’s own Chick Fil A checks in at number 8 with $6.2 billion in revenue.
From the National Restaurant Association (the other NRA, as I call it) comes a study that two thirds of Americans now eat more ethnic food than they did five years ago. A like number prefer a restaurant featuring locally produced items. Three quarters (75%) of guests use a smart phone to view a restaurant menu at least two times a year and forty percent (40%) would use the same device to pay restaurant and bar tabs if given a choice.
Recent Transactions for the Shumacher Group include…
Sale of the following Businesses:
Uncle Maddio’s Pizza Joint, Buford
Three-unit GiGi’s Cupcake Franchises, Buckhead, Peachtree City, Cumberland Mall
Oz Pizza, Douglasville
OY! Vinings
Building and Land Sales:
Golden Corral Purchase of 2 plus acres Cobb Parkway
Capt. D’s purchase of one acre Lovejoy Ga.
Former Malone’s – Savoy Drive.
Leases of the following:
Bojangles – Riverdale, Ga.
Capriotti’s Sandwiches- Kennesaw
Figo Pasta-The Flat Iron Building-downtown Atlanta- and Defoors Ferry
