Skyline Views

Battle for Commercial Real Estate News Heats Up

By Tony Wilbert, Wilbert News Strategies

ATLANTA (May 29, 2009) - The battle for commercial real estate news in this commercial-real-estate-obsessed city is back on.

Over a 12-year span, from 1996-2007, Atlanta had one of the fiercest competitions to break commercial real estate news in the country as Atlanta Business Chronicle and The Atlanta-Journal Constitution fought for each breaking story. In these years, the AJC expanded Deals & Trends, its commercial real estate column to nearly 60 inches. That's an incredible length, even in the days before the news hole began to evaporate. In response, the ABC doubled the size of Real Estate Notes, its commercial real estate column.

I saw the competition firsthand. I covered commercial real estate at the ABC from 1996-1998 and in 1999 and at the AJC from 1999 to 2004. It was especially interesting battling Matt Gove, now an SVP at Grady, for stories.

The competition quieted over the past three years as the AJC dropped Deals & Trends and focused more on real estate's entitlement process and development's public impact than on transaction reporting. At the ABC, the paper went through a succession of real estate reporters, a couple of whom now deftly serve developers on the public relations side.

Interestingly enough, it's a technology firm that has returned the intensity to the fight. 

Atlanta Business Chronicle's May 22 story that BlackBerry developer Research In Motion was building a new complex and data center in the North Fulton submarket sparked buzz not seen or heard in several years. Several people talked about it at the NAIOP meeting. WXIA-TV quickly jumped into one of its helicopters and followed the story. 11Alive, as WXIA also is known, interviewed ABC reporter Urvaksh Karkaria, who broke the story.

In an interesting twist, it is the real-estate/bad-mortgage-fueled recession that can be thanked for the end to the ceasefire. When the AJC announced its latest round of buyouts and staff reduction, it actually doubled the number of beat reporters specifically assigned to cover real estate. Newspaper veteran Gertha Coffee took over the commercial real estate beat, and Michelle Shaw was named residential reporter. At the ABC, Doug Sams provided the longest continuity in the key commercial position at the weekly.

During the week that followed, the AJC featured a story about what would become of all of the closing car dealerships in metro Atlanta. That story served as the basis of a story on GlobeSt.com, which cited the AJC story. The ABC, GlobeSt and Skyline Views, this blog, competed for the Aldi distribution center news.

And today, the ABC broke news about Crate & Barrel brand CB2 scouting Atlanta and tied Bloomberg on a story about Starbucks and other major retailers asking landlords for rent reductions in these recessional times.

This is happening at the right time. Two Atlanta mayoral candidates, Lisa Borders and Kasim Reed both recently discussed the importance of real estate to Atlanta in a story about which developers are supporting which candidates. And with foreclosures of major office towers and perhaps a retail center looming, it's nice to see the papers' competitive juices overflowing.

The upshot of this is that commercial real estate once again will get the coverage it deserves in Atlanta. 

Atlanta Closes in on Another Big Industrial Deal

By Tony Wilbert, Wilbert News Strategies

ATLANTA (May 26, 2009) - Two weeks after Georgia Gov. Sonny Perdue announced a new 1.5 million-square-foot General Mills distribution center on metro Atlanta’s edge, another large company is moving forward with plans for a sizable industrial building in the exurbs.

This time, the tenant is ALDI, the Illinois-based grocery chain that has about 1,000 locations in 29 states. ALDI’s distribution center would be built on 85 acres fronting the south side of Ga. 82, aka Dry Pond Road, in Jefferson (Jackson County), according to a Development of Regional Impact filing. 

The center initially would comprise 482,223 square feet but would be expandable to 780,849 square feet, according to the DRI filing submitted by the city of Jefferson.

ALDI’s need for a new distribution center likely portends plans to expand in the region, where the chain has entered the Atlanta market. 

These moves by ALDI and General Mills (which chose Social Circle for its $42 million building) to invest in large distribution centers in the Atlanta exurbs is testament to the area’s position as the dominant industrial market in the Southeast.

Several other large industrial requirements are out in metro Atlanta. It’s a much more lively segment of the commercial real estate market than office right now. The data center market is starting to heat up, too, as existing centers quickly become functionally obsolete. News of Research in Motion’s new BlackBerry data center in Alpharetta created a stir last week.

The ALDI distribution center’s developer is listed as AM King Construction of Charlotte, N.C. Construction will start “immediately upon approval” of the application, according to the DRI.

On May 19, the Northeast Georgia RDC determined that the ALDI project warrants regional review because of its size and scope. 

Check back at Skyline Views for updates on ALDI and the other large industrial developments in metro Atlanta.

Be Prepared for "Second Coming of the RTC"

By Tony Wilbert, twilbert@wilbertnewsstrategies.com

ATLANTA (May 21, 2009) - Chris Marinac, a former REIT analyst who has positioned himself as a key banking consultant, offered some poignant advice to commercial real estate developers, lenders, brokers and others today: Break out and dust off the old Resolution Trust Corp. playbook and be ready to use it.

Marinac, left, managing principal at FIG Partners, said it might take "the second coming of the RTC" or a similar organization to get the country out of the current bad-debt fueled economic crisis. "An RTC-type of approach is probably going to be the best solution," he said. "It's not fun, and it will be painful, but ultimately it will make it easier to get things accomplished."

Marinac made his comments as part of a panel at the monthly members meeting of the Georgia chapter of the National Association of Industrial and Office Properties. Barry President and COO Lance Patterson moderated the panel. The other panelists were Brian Olasov, managing director, McKenna Long Aldridge; Charlie Sharbaugh, real estate partner, Paul Hastings; and Greg Winchester, managing director and one of three owners, TriMont Real Estate Advisors.

Panelists offered advice and insight into how to bid for distressed loans controlled by the Federal Deposit Corp. and real estate portfolios of now-defunct community banks and how to get fees from government agencies running the programs.

Investors interested in assets held by banks that have gone out of business should be cautious, Winchester told the crowded room at the Grand Hyatt in Buckhead. "It's buyer beware and do a lot of asking around about the real estate," he said. 

TriMont has bid on assets from failed banks, including Integrity Bank in Georgia. In some cases, the FDIC did not divulge all important information about the portfolio and in other cases, the loans weren't administered well. "Essentially, you're on a scavenger hunt," Winchester said.

Sharbaugh, left, said potential investors should be prepared for some surprising mixes of loans and collateral in offerings. One deal he looked at included two horses. Another comprised a retail center and batch of credit card debt.

As far as doing deals with the FDIC, Sharbaugh said it's not as easy as checking the agency's Web site for a list of distressed loans available and picking up the phone. The FDIC is swamped. "It's very, very difficult to get anybody's attention at the FDIC," he said.

Marinac suggested investors go to Wikipedia and refresh their knowledge of programs the RTC used in the late 1980s and early 1990s to move distressed real estate and dispose of non-performing loans. "You're going to see these [programs] return in some form or fashion [in 2010 or 2011]," he said, adding that he considers this development as a positive. "They are a roadmap out of here."

McKenna's Olasov, who has appeared on Bloomberg to talk about government programs aimed at fixing the credit morass, closed the meeting on as positive a note a possible. "Thank your stars you are not in retail," said Olasov, who spent the early part of the week at the International Council of Shopping Centers' ReCon show in Las Vegas.

Rockefeller Group to Develop General Mills Center

Blogger's note: A couple hours after I posted this entry, Atlanta Business Chronicle posted a story saying the deal is done.

ATLANTA (May 12, 2009) - The Miami office of Rockefeller Group Development Corp. appears to have emerged as the favored firm to develop the 1.5 million-square-foot distribution center in Social Circle, Ga., for General Mills.

Though there's still no guarantee a deal will get done, New York-based Rockefeller Group is the leading contender to develop the $40 million to $45 million center. Skyline Views has been covering the story closely.

General Mills is focusing its search on metro Atlanta's extreme eastide because it wants a location close to its Covington food plant, according to industrial development firms that chased the deal. Rail would connect the food plant and distribution center.

Continue to check back for more developments on General Mills' search.

"Meet At" Offers Real Respite from Recession

By Tony Wilbert (www.twitter.com/twilbert)

DUNWOODY, Ga. (May 4, 2009) - With the commercial real estate market in particularly bad shape right now, networking is critical and alcohol a necessity. Those elements blended nicely Thursday evening at the quarterly "Meet At," which has grown into an institution in Atlanta commercial real estate.

More than 525 people RSVP'd to the event, and it appeared more than 85 percent of those showed at Villa Christina. Most bemoaned the current market during which next to nothing is happening in the office or industrial markets - other than short-term renewals. Atlanta Business Chronicle Doug Sams mingled, hoping for scoop, as real estate PR people inclduing Bailey Webb of The Gove Network and I, networked. (Sams and Webb appear in photo at left.)

The mood was celebratory nonetheless as brokers, owners, investors and lenders caught up with people they see once a quarter in the shadows of the Perimeter Summit office towers. Before the event started, Bob Voyles and John Heagy met quietly in a corner of the restaurant at Villa Christina. For several years, Voyles and Heagy headed Hines' Southeast operation, and Perimeter Summit was one of Hines' signature projects in Atlanta. But Voyles left a couple years ago to start Seven Oaks. Voyles recently persuaded GE Pension Trust to hire his company as it development partner at Perimeter Summit.

Several of the industry executives including Kerry Armstrong of Duke Realty Corp., Mike McIntyre of Skanska USA Building and Peter Kasian of Tishman Speyer attended. Lisa Simmons, former head of communications at Cousins Properties, and James Pitts, who recently left Grubb & Ellis to reform Kellogg Partners, like dozens of others, met for the first time. (Pitts and Simmons appear in photo at left.)

It's admirable that hosts Tishman Speyer, Opus, Hardin, Sanctuary Park, RuleJoyTrammellRubio and Colonial Properties Trust would shell out dollars during the hurtful recession to keep the tradition of "Meet At" going. This was one event the industry needed.