This Week on The Street for October 12, 2010

by Harold Shumacher

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This Week on The Street

(A more or less regular compilation of news, factoids and observations.)

Today’s word Boys and Girls is Bifurcate, a fancy way of saying dividing things into two.  And that’s what happening to many classes of assets. They’re being divided into two piles the good pile and the not so good pile.

The good pile are assets we’d all like to own-signature office buildings, leased up neighborhood shopping centers with strong grocery store anchors and small shops, triple A net income properties, well located apartment buildings and warehouses.  Those assets are selling at very attractive cap rates, especially in light of the pent up demand by all the “smart money” that has been sitting on the sidelines for the better part of the past two years.

This money has to be spent and it slowly is beginning to happen.

The other pile, and one that is considerably larger are troubled assets- things like residential land 50 miles from the city, badly located shopping centers, empty warehouses and poorly situated run-down  apartments.  Add to that the owner’s inability to sell, the “we can’t afford to take that kind of hit on our balance sheet approach” and you have an ever growing number of troubled assets that will likely sit for many months and maybe years to come.

While the problem is easy to describe the solutions are far more challenging and will likely have to work themselves out over a long period of time.

For the past two years, pretty much coinciding with the collapse of the commercial real estate market, I’ve been taking yoga classes. What yoga has taught me is two vital character traits to be successful in this business-the ability to stretch and to be flexible-stretch to make the deal and flexible enough to change direction when necessary. Try it, you might like it.

Three Buckhead Life  Restaurant Group (Chops, Bistro Nikko, etc.)  alumni will soon be neighbors in Brookhaven.  Kaleidoscope, from former Buckhead Diner chef Joey Riley, will open by year’s end across the street from Haven (Michael Arnett –also formerly of  the Buckhead Diner) and  near neighboring  J. Christopher’s,  from former Fish Market G.M. Barry Lennon.

Some other newcomers of note include a third Genkei location, slated for the Everybody’s space in Virginia-Highland; a third Galla’s pizza, Dunwoody, a new Ippolito’s in Dacula  and a second Palamia’s Cuban restaurant in John’s Creek.

Dunwoody looks like the destination of choice for Irish pubs these days. Both Firkin Pub and Tilted Kilt are slated to open by year’s end.

Former Atlanta 5 Star Chef Gunther Seeger is now working as a consultant in New York City on a BBQ concept for a London based restaurant group. Is this an example of living high on the hog?

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