Skyline Views

BREAKING UPDATE: Huge General Mills Industrial Deal Moves Closer

ATLANTA (Feb. 24, 2009) - The huge General Mills industrial deal appears one big step closer to reality this week. On Monday, Social Circle officials filed plans with the state of Georgia for a 1.5 million-square-foot distribution center in the Walton County city.

Although the Development of Regional Impact (DRI) filing cryptically refers to the development as "Project Southeast,"Wilbert News Strategies' blog reported Feb. 3 that General Mills of Minneapolis is scouting metro Atlanta's extreme east side for a 1.3 million-square-foot distribution center, expandable to 1.5 million square feet. The $45 million to $50 million will be a grand deal for a developer on these trying times.

The center will be built on E. Hightower Trail, according to the DRI filing, which says simply, "National Firm to construct 1.5 million sq. ft. distribution center." It didn't take long for the Northeast Georgia RDC to determine the project "Warrants regional review" because of its sheer size.

It's interesting to note that the mainstream press generally has ignored news of this large requirement that would bring new jobs to Georgia. Some blogs, including Brian Brodrick's Voice of Moderation, picked up on the story. Brodrick was hopeful Newton County would land the big General Mills deal at the huge Stanton Springs development. But, it looks like Social Circle won this one.

The distribution center will be completed this year, according to the DRI filing. The developer is listed as the Social Circle Development Authority.

Tishman Speyer Fetes Renewed Midtown Plaza

ATLANTA (Feb. 24, 2009) - Tishman Speyer unveiled an updated Midtown Plaza during a party Thursday night that attracted 200 members of Atlanta commercial real estate industry.

The New York developer/owner funded some major upgrades at the 23-year-old, two-building Class A office complex at Peachtree and 17th streets. The most-noticeable is the new airy, white lobby of One Midtown Plaza, where the party was held. A striking piece of artwork hangs from the ceiling and marks Tishman Speyer's commitment to the visual arts.

The celebration, as Tishman Speyer called the event, was a nice respite from the litany of bad economic and real estate news. Several Tishman Speyer executives were in attendance, as were dozens of top tenant reps, some architects and a Wall Street Journal reporter on assignment from New York. Attendees in the photo below are, from left, Allison Bittel, Cushman & Wakefield; John Flack, CresaPartners; Leslie Claxton, Tishman Speyer; Gina DeRaffele, Ackerman & Co.; and Irving Jacobson, Shumacher Group. (Thanks to Rob Claxton for the photos.)

Claxton of provided this list of upgrades to Midtown Plaza, which was part of a five-building, 3.5 million square-foot portfolio Tishman Speyer acquired in 2006. The redevelopment includes: the gallery entrance from the parking deck, a bright new lobby (finishes include white terrazzo floors, spandrel glass walls and stainless accents), a new promenade (walkway with screenwall between the 2 buildings), an activity center, which is a brand-new amenity, elevator modernization in both buildings, the renovation of lobby and mezzanine levels in Two Midtown Plaza, an upgraded conference center and upgraded restrooms.

Mack ScogginMerrill Elam Architects designed the renovated space, and Brasfield & Gorriewas the contractor.

Several lucky attendees won prices such as a new Wii, and everyone got a digital frame. Didn't try the Midtown Moonshine, but a couple people who hung out at the bar seemed to enjoy them.

 

Voyles Set to Return to Perimeter Summit

UPDATED Feb. 24 with new information about the leasing agent at Perimeter Summit.

DUNWOODY, Ga. (Feb, 19, 2009) - It appears veteran Atlanta developer Bob Voyles is returning to Perimeter Summit, a mixed-use project outside Atlanta he helped create while at Hines.

Atlanta's commercial real estate community is abuzz with word that Voyles' company, Seven Oaks Co., has been hired to replace Hines as master developer at Perimeter Summit. Perimeter Summit is an 83-acre mixed-use development best known for being home to Villa Christina and the Hewlett-Packard tower. While at Hines, Voyles helped convert the development into a mixed-use project.

Voyles left Hines in 2004, when he founded Seven Oaks, located in suburban Cobb County. At Hines, he developed a close relationship with GE Pension Trust and GE Asset Management. An affiliate of GE Pension Trust owns Perimeter Summit, situated in the southwest quadrant of I-285 and Ashford Dunwoody Road.

Seven Oaks' apparent win of the Perimeter Summit business likely is bittersweet for Voyles because of his close relationship with John Heagy and other Hines executives. While we initially heard that Randy Holmes of Seven Oaks would handle marketing of Perimeter Summit, we've since found out that Eric Ross of CBRE will be oversee leasing.

AJC to Eliminate Standalone Business Section

ATLANTA (Feb. 17, 2009) - People here say commercial real estate is to Atlanta what automobiles are to Detroit (at least in the Big 3's heyday). As a result, those in commercial real estate and those interested in the industry have been treated to thriving, competitive blanket coverage of real estate in The Atlanta Journal-Constitution and Atlanta Business Chronicle.

But it looks like things will change - very soon. The AJC, as locals call the daily paper here, plans to eliminate its daily standalone business section next month, according to Talking Biz News, a blog that covers business journalism. The daily business section will shrink to three pages and be hidden in the A section; the Sunday Business section, however, will continue.

The smaller newshole has to mean less commercial real estate news. It's ashame. As a former reporter who covered real estate at the AJC and Atlanta Business Chronicle, I know the industry benefited from the intense competition for news between the two papers. I'm sure editors and reporters at Atlanta Business Chronicle are celebrating.

More to come.

Former ATL Mayor Sees No Bloodbath in Buckhead

ATLANTA (Feb. 12, 2009) - ULI's Emerging Trends says "a bloodbath is coming" to the Buckhead office market because of overbuilding. Even developers of spec office towers in Buckhead recently questioned Crescent Resources' decision to start one of its own.

But someone who's been around Buckhead for as long as he can remember urged calm in today's real estate-initiated economic storm. Former Atlanta Mayor (and unofficial Buckhead "Mayor") Sam Massell told the Buckhead Business Association today that the 2 million square feet of speculative office space being delivered in Atlanta's toniest district is a good thing.

"We can't absorb all of this overnight," he said of the space. But, "Buckhead will be in the enviable position of having an ample supply when the demand does come back." And as a former developer himself, Massell knows the real estate market and demand always come back.

Massell offered his assessment of Buckhead in his "State of Buckhead" address before a packed house at the City Club of Buckhead in Atlanta Financial Center. During his speech, Massell also defended The Streets of Buckhead, which he said, "faces a new rumor [of its failure] every day."

"Like the Energized bunny, [the Streets of Buckhead] keeps going along at a good pace," he said. "[Developer Ben] Carter has the experience and creativity to do something of this magnitude."

As for Buckhead overall, Massell, who serves as president of the Buckhead Coalition, said Buckhead is well positioned when the economy does rebound because "the luxury market will be the first to turn around."

He also said the city of Atlanta needs Buckhead. While the community's 72,000 residents account for only 15 percent of Atlanta's population, they pay a whopping 45 percent of the city's ad valorem taxes. (As a Buckhead resident, I can confirm this.)

Buckhead "perhaps is the life vest that keeps [the city of Atlanta] afloat in this economy," Massell said. But Buckhead needs to be part of the city, too, he said. The talk of Buckhead splitting apart from Atlanta and forming its own city needs to stop, the former mayor said.

"It is an idea that has no measurable chance of passing legally or politically," Massell said.

Atlanta Needs Thriving Streets of Buckhead

By Tony Wilbert

ATLANTA (Feb. 9, 2009) - There's a huge construction pit in the heart of Buckhead's former bar district, and though it's quite ugly right now, everyone in Atlanta's commercial real estate is staring at the hole.

If all goes well for developer Ben Carter Properties, an upscale mixed-use project with an open-air retail center like nothing else in Georgia will emerge in 2010. If Carter stumbles, Buckhead residents could be saddled with a gaping 9-acre reminder that we're in for a long, long recession.

It's interesting to hear how many people are fascinated by the possibility the $1.5 billion project, The Streets of Buckhead, might fail. Some say they expect a few retailers that have signed on to exercise their rights to terminate their leases, at a cost of course. When Ben Carter Properties asked Balfour Beatty Construction to try to renegotiate terms with subcontractors, word on the street was that the GC was out and that permanent financing would be nearly impossible to secure.

But real estate watchers, competitors and wags with any sense are rooting for Carter to pull off The Streets of Buckhead.

Atlanta needs The Streets of Buckhead to succeed to prove that it's truly a "world-class" city where to-name European shops and international restaurants can thrive. The city needs the Streets to succeed because right now, there's not a lot for tourists in Atlanta outside of downtown, which has issues with homelessness and crime.

And Buckhead, the part of Atlanta people from out of town know best or at least know of, desperately needs the Streets to thrive. Buckhead boosters worked to support Ben Carter's move to assemble land for the project buy snatching up properties that housed some of Buckhead's best bars, a private school and Ray's New York-style Pizza. Buckhead residents who loved the bars at least took some solace in knowing that the Streets would be a worthwhile replacement.

If the Streets succumbs to the recession, started appropriately enough by a mortgage mess, Buckhead's Peachtree spine will be broken.

When Sam Massell, president of the Buckhead Coalition, former Atlanta mayor and current "mayor of Buckhead" delivers his "State of Buckhead" address, I hope he persuades those in attendance to support The Streets of Buckhead.

As for Ben Carter himself, people have bet against him before. When Carter and the late Scott Hudgens announced plans for the 1.8 million-square-foot Mall of Georgia in November 1996, people scoffed and said they'd never pull it off. When the doubters heard whispers that Nordstrom would anchor the mall, located in Buford, Ga., they laughed.

Ben Carter, of course, got the last laugh. When the Mall of Georgia opened on Aug. 13, 1999, Carter beamed, sporting an "I-told-you-so" look on his face.

Let's hope he's laughing and partying like it's 1999 next spring when he cuts the ribbon at The Streets of Buckhead's grand opening.

Huge Fortune 500 Requirement Cheers Atlanta Industrial Market

By Tony Wilbert

ATLANTA (Feb. 3, 2009) 2009 quickly is becoming a Twilight Zone year for commercial real estate, a year where nothing is as it seems.

Tonight’s episode centers on General Mills Inc.’s requirement for a 1.3 million-square-foot distribution center on the eastside of metro Atlanta. Industrial developers are drooling at the prospect of landing such a deal with the creditworthy maker of Cheerios, Haagen-Dazs ice cream, Pillsbury breads, Hamburger Helper and Betty Crocker foods.

The $45 million to $50 million project would be one of the largest industrial deals in Atlanta - and likely the Southeast - this year. But, don’t nominate the General Mills transaction for next year’s Atlanta Business Chronicle’s Best in Atlanta Real Estate just yet. (Photo above courtesy of Express-Times.)

In this weird year in these uncertain times, the tenant isn’t the only one that has to prove it’s financially stable enough to commit to a long-term deal. Potential developers also now must prove they have the fiscal wherewithal to make the deal.

From tenant to developer to lender, everyone’s a financial partner in real estate deals these days.

So, for developers that can pull off a 1.3 million-square-foot big-box industrial building (expandable to 1.5 million square feet), the chase for General Mills is on. The company’s search is being led by a broker from its hometown of Minneapolis, and General Mills is believed to have hired King Industrial Realty for local assistance.

General Mills, which has a plant outside Atlanta in Covington, is said to be focusing on the metro’s eastside and concentrating on Social Cirlce in Walton County. Social Circle's connectivity by rail to Covington and points beyond apparently is playing a key role in the company’s desire to locate there.

A new industrial operation would be a good thing for Social Circle, home to the famous Blue Willow Inn, where you can get a true Southern meal. I'd have to image the Georgia Department of Economic Development is all over this one and will do what it can to make it happen.