Where else can the overall office vacancy rate cling tenaciously to the 10% level while there is about 5 million sq. ft. of office space under construction or can industry developers add 15 million sq. ft. in one year and barely change the vacancy rate? Where else can apartment developers continue to bring 10,000 units to the market every year and have little discernable effect on the sector's occupancy rate?

Where else but Atlanta? This archetypal boom-and-bust Sunbelt growth market is in the midst of an expansion that has been going on for nearly six years, one rivaling in both length and intensity the real estate development spree it hosted in the 1980s.

Some of the more experienced players here are starting to worry a bit. "The market has been so good, and is looking so good as we head into 1998, that you have to wonder how long it can continue," says Mike Elting, senior managing director for Cushman & Wakefield of Georgia Inc. "Those of us who have been around awhile realize that commercial real estate is a cyclical business," he says, "and that this market is getting closer and closer to the time when it will turn in another direction."

No one knows exactly when it's going to happen to the Atlanta market. But, "a downturn is inevitable," says Faison office partner John Whitaker from his office in Atlanta. "The nature of the real estate cycle is that the long lead times involved in the development of capital-intensive projects will ultimately lead to overbuilding," he notes. Sooner or later, says Whitaker, "The Atlanta market will be overbuilt, rental rates will soften, and tenants will have the advantage again."

Others are a bit more sanguine about the situation. "A lot of people are talking and writing about how quickly the Atlanta market is softening," says Chris Becker, senior vice president for Boca Raton, Fla.-based Crocker Realty Trust, which owns around 2 million sq. ft. worth of metro-area office and flex space. "Frankly, I think that assessment applies only to a certain submarket or two," he notes. Totally different dynamics are at work in the various submarkets that comprise Atlanta, says Becker, "and you have to look at each one independently."

Several factors have helped transform Atlanta into "Hotlanta," including a job-growth rate that makes the capital of the New South the envy of many cities.

Incredible population, job growth Optimists, pessimists and everyone in between in the area real estate community have been enjoying a growing Atlanta marketplace. According to its 1997 Population and Housing Report, the Atlanta Regional Commission notes that the population of the 10-county Atlanta region passed the 3 million mark in 1997, increasing by 79,000 people during the year ending April 1. "The region's increase over the past year was lower than the record 105,500-person increase in 1994-1995, but well above the 1995-1996 increase of 71,900," says the report. 1997's gain was also "well above the average annual increase of 61,788 for the 1980s."

In the employment arena, after the spectacular Olympics-related spikes of 1995 and 1996, growth now appears to have fallen back to a more sustainable long-term rate of around 60,000 new jobs annually, according to Metropolitan Atlanta Chamber of Commerce Vice President/Economic Development Nancy Nolan. The net number of new jobs created in the metro area last year was 59,700, bringing the decade's total to nearly 600,000. "This growth is even more remarkable," she notes, "when you consider that it has taken place in a market where unemployment levels have been hovering in the 3% range."

The metro Atlanta area's employment growth has slowed down a bit since the 1996 Olympic Games, according to the 1997-1998 Forecast of Georgia and Atlanta, a publication of Georgia State University's Economic Forecasting Center. But, the report notes, "most of the post-Olympics slump has been weathered without serious consequences to the growth capability of Atlanta."

On a percentage basis, a minor slowdown is apparent. "As employment growth slows from 4.8% in 1996 to 3% in 1997, and only 2.3% in 1998, unemployment rates will rise," according to the report. "After reaching a cyclical low of 3.8% in 1996," it adds, "unemployment should increase to 4.2% in 1997 and 4.7% in 1998."

On an absolute basis, though, the employment outlook is still positive. After a projected gain of 57,300 jobs in the metro area in 1997, the report predicts a gain of 45,500 in 1998. "While these are dramatically slower than the nearly 100,000 jobs added per year over the past four years," the report notes, "they remain healthy gains that will preserve Atlanta in the top five growth areas of the country in terms of total new jobs." Growth in the Atlanta economy is slowing, the report concludes, "yet, no recession is in sight."

Major metro Atlanta business relocations and expansions during 1997 included The Registry Inc., a computer consulting firm that established a DeKalb County location, employing 450. Bugle Boy Industries announced a 435,000 sq. ft. regional distribution center in Henry County that will ultimately employ 350. In Peachtree City, Siemens Electromechanical Components will be setting up a new divisional headquarters that will create 300 jobs. In Atlanta, Mapics Inc., a software firm, announced a 240-employee facility. Meanwhile, Universal Alloy, a manufacturer of aluminum mixtures for the aerospace industry, announced a 200-employee manufacturing plant in Cherokee County.

1998 already has shown signs of continued job growth. General Electric Co. recently announced that it will relocate nearly 600 sales and marketing jobs from its Power Systems Division in Schenectady, N.Y., to Wildwood office park in Cobb County. In April, Little Rock, Ark.-based telephone services provider Alltel Corp. has announced a new, 1,200-employee facility in the booming Georgia Highway 400 corridor, consolidating workers from several metro-area locations, with plans for another 800 employees over time.

Office Market Perspectives According to first quarter 1998 statistics from Cushman & Wakefield of Georgia, the Atlanta office market, which comprises 92.8 million sq. ft., was 13% vacant, a figure which drops to 10.4% when only direct vacancies are counted. After absorbing 4.45 million sq. ft. during 1997, the market enjoyed an 886,527 sq. ft. net increase in occupancy during the first three months of 1998. The average quoted direct rental rate for the market as a whole is reported at $18.35, jumping to $21.24 for Class A facilities. New construction is heavy, with some 4.5 million sq. ft. under way at the start of 1998.

Low vacancy and high absorption numbers are attracting the interest of the investment community. Office-building sales volume totaled more than $2.3 billion in 100 transactions in 1997, according to a report from The Westminster Group, Atlanta. This sales volume represented an increase of 46% over 1996, the report notes, with real estate investment trusts (REITs) accounting for $940 million in purchases.

"A lot of people want office product in a market as strong as Atlanta," says Paul Kilgallon, senior vice president for Chicago-based CMD Realty Investors, an opportunity buyer with around 300,000 sq. ft. of holdings in metro Atlanta. As a result, "It is getting hard to find product," he notes, "and prices are being bid upwards."

With interest rates low and lots of buyers on hand, "Investment sales volume has gone through the roof," says Fred Glass, executive vice president of locally based Carter & Associates-Oncor. "Almost all the new buildings being built are being handled on a presale basis with a REIT waiting in the wings to buy once they hit a certain level of occupancy," he says.

As one might expect, the wave of new office construction under way in Atlanta is having a major impact on the market. Times have gotten better for space users, according to David Branch, CEO of The Sharp Boylston Cos./CRESA, Atlanta. "At the beginning of this current cycle, if a user had a major space requirement, they had to commit on the front end to be a lead tenant in a new office development - and developers couldn't get financed without a 50% to 75% preleasing level," he recalls. "We're now starting to see a drop in preleasing requirements, which means more space is coming on line," says Branch. This, in turn, "means more options available for space users - along with a slowing in the escalation of rental rates we've been experiencing the past several years."

Atlanta-area office developers are a more cost-conscious bunch than they were in the 1980s, emphasizing smaller, quicker-to-build, and more functional buildings, according to George Adornato, vice president and general manager of Batson-Cook Co., a general contractor whose recent projects include Galleria 400, a just-started office tower that Childress Klein Properties is developing in its Galleria complex in Cobb County. "We've attacked items such as foundations and structures, and gone through standardization of mechanical systems," in order to meet the needs of today's office developer, he notes. As is the case in many types of businesses today, "We have to constantly improve our product - while keeping the price the same or lowering it."

Downtown Projects Office construction is taking place throughout the metro area, including the beleaguered Downtown market. Still burdened by an ample supply of available space left behind by 1996 Olympics-related organizations, downtown has seen its office rental rates stagnate. This has had the effect of making it "the value deal of the Atlanta marketplace," according to Faison's Whitaker, whose company recently took over the marketing/leasing of the Peachtree Center mixed-use complex.

"Downtown is finding its niche, and I think the outlook is good," says Whitaker. In addition to attractive office rental rates, "It is the most accessible market in the city," he says, "and will be a long-term player in the area office market."

Whitaker is not the only one optimistic about Downtown Atlanta. At Inforum, where some 240,000 sq. ft. of Olympics-related space remains vacant, COMPASS Management and Leasing Inc. will be converting existing conference and exhibit space into office facilities, says Gail Peeler, who heads the leasing team at Inforum. "There will be no more conventions held in the building," she reports, "and we will have between 300,000 and 400,000 total sq. ft. of space."

Miami-based LNR Property Corp. and Greenville, S.C.-based Insignia Commercial Investment Group are in the process of completely redeveloping the 630,000 sq. ft., 36-story 101 Marietta Tower. This is one of several Downtown buildings that lost major government tenants when the 1.5 million sq. ft. Atlanta Federal Center opened in 1997. A complete remake of 101 Marietta into the Class A-quality Centennial Tower is now under way, with a summer 1998 opening planned.

Midtown on the move With direct vacancy at the 7.4% level overall and 5% for Class A office space at year-end 1997 and no new construction to speak of in the past several years, the 10.6 million sq. ft. Midtown market has tightened up considerably. "There are a number of office users in midtown that would like to expand, along with prospects that would like to move there - but there is no room for them," says Carter Senior Vice President George McKenney.

With Class A space in Midtown at a premium, the market is attracting some new-found attention. "A number of developers are jockeying for position to build speculative office space in Midtown," according to Sharp Boylston/ CRESA Vice President Tim Holdroyd. It would be an understatement, he adds, "to say that the midtown market is on fire." Several people are talking about building, adds McKenney, "And I would not be surprised to see a new speculative building started in Midtown within the next 12 months."

The most likely candidate to develop a new speculative office building is John Dewberry, president of Dewberry Capital Corp., Atlanta. A former star quarterback at Georgia Tech, Dewberry has purchased a prime tract at the northern tip of Midtown and says he will start Phase I, a seven-story, 165,000 sq. ft. building, in mid-September, in the project he's calling Peachtree Pointe.

In the heart of Midtown, the Federal Reserve Bank of Atlanta is about to begin construction on a $180 million, 700,000 sq. ft. headquarters facility at Peachtree and 10th streets. Scheduled to open in 1999, the building will be home to around 1,100 government employees. Meanwhile, long-time Midtown anchor Equifax Inc. is building a new, 150,000 sq. ft. headquarters building adjacent to its existing complex. Also, developer Jim Borders plans to renovate the historic Biltmore Hotel and recast it as a complex with 250,000 sq. ft. of office and 50,000 sq. ft. of retail.

In the existing-building investment arena, less than one year after acquiring Colony Square, Chicago-based TrizecHahn Office Properties purchased the two-building, 501,345 sq. ft. Midtown Plaza in November 1997 for $60 million. "Because Midtown has only five or six investment-grade office properties," according to Cushman & Wakefield's Chris Marshall, who represented TrizecHahn in the transaction, "this market has not received the institutional investment interest other Atlanta submarkets have." This sale, however, "confirms that Midtown is indeed an investment market."

Building in Buckhead With its 9.4 million sq. ft. of office space operating at a 7.3% direct vacancy level - lowest among major office submarkets in the Atlanta region - "Demand for office space in Buckhead/ Lenox has continued to be substantial," reports Clark Gore, executive vice president of Holder Properties Inc., Atlanta. The extension of Georgia Highway 400 into this area from the northern suburbs in the early 1990s opened the Buckhead market to corporate users that used to shun it because of its relative inaccessibility, he notes.

To help crack the tight market, Holder Properties has begun construction on Prominence in Buckhead at the corner of the Buckhead Loop and Piedmont Road. Phase One of the project is an 18-story, 430,000 sq. ft. office building, with a similarly sized second phase set for the future. In February, Chicago-based Equity Office Properties Trust of Chicago announced that it would buy Holder's Prominence project upon its completion in mid-1999.

On the other side of the Buckhead Loop, Cousins Properties Inc. is building The Pinnacle, a 424,000 sq. ft. tower at Peachtree and Lenox roads. The Atlanta-based REIT has preleased about a third of the building to heavy-hitters such as Merrill Lynch and PaineWebber. The Pinnacle is part of the Live Oak complex situated across Lenox Road from the 1.6 million sq. ft. Lenox Square regional mall (Atlanta's largest). In 1997, Cousins Properties and Bethesda, Md.-based Stonebridge purchased 279,000 sq. ft. Two Live Oak Center, which had been the focus of a redevelopment effort by its former owner, Houston-based Hines Interests.

An October 1998 opening is on tap for Tower Place 200, a 258,689sq. ft. building adjacent to the standing Tower Place building, according to Atlanta-based Regent Partners' Greg Kindred. Additionally, he reports, Regent Partners is constructing a $2 million, water-oriented park that will serve both as a "front door" for the project and as a gathering spot for all Tower Place tenants.

At the 165-acre Lenox Park, developer Technology Park/Atlanta Inc. has completed a new, 154,595 sq. ft. office building, according to Lenox Park Associates project manager Michael Pelt. Some 88,000 sq. ft. of the structure has been leased to Harbinger Corp., a high-tech company.

A number of Buckhead/Lenox office buildings have changed hands recently. Monarch Plaza was purchased by ERE Yarmouth for $167.33 per sq. ft., according to John Wise of the Westminster Group, while five buildings at Piedmont Center were purchased by RREEF for $146.45 per sq. ft. According to the Atlanta office of Marcus and Millichap, One Securities Centre was purchased for $249 per sq. ft.; meanwhile, as part of a portfolio sale, affiliates of J.P. Morgan Investments purchased the 27-story Resurgens Plaza for $183 per sq. ft.

The Golden Corridor The office-building boom is well under way along Georgia 400. Known by many locals as The Golden Corridor, it runs north from its junction with Interstate 285 in Atlanta's bustling Central Perimeter market through north Fulton County and into Forsyth County. According to figures from Cushman & Wakefield, this market has more than tripled in size since 1996, when it was 1.4 million sq. ft. in size, to its current level of 5 million sq. ft. Since 1996, direct vacancy has grown to the 17.2% level, with another 906,373 sq. ft. currently under construction.

There's no real reason now to be concerned about the health of this particular office submarket, though, according to Holder's Clark Gore. "It's true that there is a 20%-plus vacancy rate in the Class A portion of the 400 Corridor market - but in absolute terms, that is not that much in the way of total square footage," he notes. "There is a lot of depth to the demand for space in this market, and it continues to attract large users from the Mid-perimeter area that are drawn by a better traffic situation and closer proximity to employee residences."

Holder Properties has several major projects in various stages of development in the Ga. 400 corridor. It has recently completed 141,400 sq. ft. of single-story office at Royal 400 Business Park and has broken ground for a call center for MCI. Holder also has some 100 acres of contiguous land available. Meanwhile, at the 3,400-acre master-planned Windward mixed-use development in the northern suburb of Alpharetta, Holder is completing work on 100 Windward Plaza, a 130,000 sq. ft. office building some 80% leased to E*Trade Group, a California-based electronic stock-trading firm. Also in Windward, Holder has broken ground on a two-building, 407,000sq. ft. corporate headquarters for HBO and Co., a giant Atlanta-based software company. HBOC plans to vacate its current headquarters in Perimeter Center and move to its new headquarters in north Fulton County in 1999.

Windward, which has been wildly successful in attractive large companies to its park, is creating an amenities base. Projects include a recently completed 164-room Hilton Garden Inn, a Wachovia branch bank and a fast-food/convenience store. Also, high-end specialty retail and fine dining are on the way and will complement 100 Windward Plaza, reports Howard Peck, vice president of owner Westerra Windward.

Across Ga. 400 from Windward, Hines Interests is developing 554-acre Deerfield as a mixed-use project. According to company Vice President John Heagy, GTE has closed on a 40-acre site here for a 403,000 sq. ft. headquarters facility; Berkshire Realty has purchased a site for the development of a 648-unit, A-quality apartment complex; and Atlanta-based Barry Real Estate Services has purchased a site for a two-building, 200,000 sq. ft. office project. Also, the previously mentioned Alltel facility,which eventually will house 1,200 employees, is slated for a tract it currently has under contract in Deerfield. On the hospitality side, sites are under contract with developers planning Marriott Courtyard, Fairfield Suites and Sheraton Four Points projects, he reports.

In other Upper Ga. 400 corridor office action, Weeks Corp. completed 150,000 sq. ft. NorthWinds Pointe during the first quarter of 1998. Other 1998 openings on tap, according to information from Grubb & Ellis (Atlanta) Research Services, include those by Opus South on 150,000 sq. ft. Royal Centre Two and 165,000 sq. ft. Royal Centre Three; Preston Ridge II, a 150,000 sq. ft. Childress Klein development; Pope & Land's 150,000 sq. ft. Three NorthWinds Center; and 150,000 sq. ft. 5555 North Point Center East, a development of Cousins Properties.

Central Perimeter construction Situated around the I-285/Ga. 400 interchange and 19.4 million sq. ft. in size, the Central Perimeter office market is Atlanta's largest. It is also one of its strongest, according to Cushman & Wakefield, with a direct vacancy rate of 7.8% and a weighted average quoted Class A rental rate of $23.44.

A lot of new office product is on its way to market here. Carter is developing an 18-story, 425,000 sq. ft. addition to Northpark Town Center. A fall 1998 opening is slated for 600 Northpark, according to George McKenney. The building is, as of this writing, approximately 35% preleased, he reports, with a tenant roster that now includes Sapient Corp., PaineWebber and HQ Business Centers.

In June 1998, The Hogan Group of Miami is set to complete its 300,000 sq. ft. Glenridge Highlands One, the first of three buildings totaling 750,000 sq. ft. that are planned for a site near the I-285/Ga. 400 Interchange. Barry Real Estate Services will be completing 250,000 sq. ft. Glenlake Building 10 in December 1998. With plans for a Glenlake building now tabled, Atlanta-based Boss Properties has purchased the two-building, 510,000 sq. ft. Lakeside Commons office complex for a $81.5 million from ERE Yarmouth. And at Perimeter Summit, where it is a partner with GE Pension Trust, Hines is ready to start on a completely speculative, 400,000 sq. ft. office building by the end of this year, Heagy says.

Northwest action Not to be outdone by other Atlanta submarkets, the 16.6 million sq. ft./8.7% vacant Northwest market, anchored by Cobb County's I-75/I-285 interchange, has its own share of entrants in the metro-area office development derby.

Construction has begun on a 440,000 sq. ft., 18-story addition to the Atlanta Galleria. The first speculative development at this mixed-use, office/retail/hotel complex since the mid-1980s, Galleria 400 is slated for completion in May 1999, according to Childress Klein partner Tad Leithead.

Nearby, first-half 1998 construction completions are slated for two major buildings. In the 530,000 sq. ft. Cumberland Office Park, Prentiss Properties is completing work on 145,000 sq. ft. 2500 Cumberland Parkway. Meanwhile, Pope & Land is wrapping up Cumberland Center IV, a 230,000 sq. ft. building.

Further south, work is being completed on One Riverside, a 10-story, 225,000 sq. ft. building that will house the corporate headquarters of Atlanta-based Post Properties. Marketed by Carter, this project is part of Riverside by Post, a mixed-use development situated along the Chattahoochee River at Northside Parkway that will feature office, retail, and residential uses in a community setting.

At I-75 and Kennedy Parkway, Hines is proceeding with Overton Park, a 33-acre mixed-use project the company calls "the next Ravinia," after its groundbreaking Central perimeter development of the 1980s. Three office buildings of 350,000 sq. ft.each, two hotels, various restaurants/retail amenities, and 400 residential condominium units are on tap for the project. "All systems are 'go'," according to Heagy, "and we hope to kick off the first office building by the end of the year."

Gwinnett market Growth in high-end residential communities in this suburban Atlanta county has created the demand for quality office space. "We're seeing a steady demand for office space as the result of the growth of executive housing in the area," says Weeks Corp. office properties vice president Kerry Armstrong. After delivering 105,000 sq. ft. Crestwood Point in 1997, Weeks Corp. is wrapping up work on an identical structure, along with 82,000 sq. ft. Park Creek, nearby on Breckinridge Boulevard.

At I-85 and Sugarloaf Parkway, a May 1998 opening is on tap for 2180 Sugarloaf Corporate Center. This 85,000 sq. ft. building by Atlanta-based developer Taylor & Mathis is the first of several here, with another 715,000 sq. ft. planned for the future. And to the north in Chattahoochee Corners Business Park, the Alter Group has purchased an additional 22 acres and is adding 202,178 sq. ft. of single-story office space, reports Southeast Region vice president/general manager Todd Yates.

At the Corners Office Park, Faison has delivered 142,000 sq. ft. Building Six, reports John Whitaker. The building opened in April at the 50%-leased level, he notes, with Kemper Insurance taking 44,000 sq. ft.

Active Industrial market According to statistics from locally based King Industrial Realty, the 342.3 million sq. ft. distribution-space component of the Atlanta industrial market ended 1997 at the 13.9% vacancy level, slightly above the 13.2% registered at the end of 1996. The 14.5 million sq. ft. service center market, meanwhile, stood at 8.7% vacant. The industrial market as a whole absorbed some 10.4 million sq. ft.of space during 1997, a drop after three straight years of increases, according to the King statistics, while new construction added 15.4 million sq. ft. of space (nearly 4 million of it build-to-suit) during 1997.

"This is by far the strongest industrial market I've seen in the past 15 years," says Carter brokerage vice president Scotland Wright. "Construction is strong, but the buildings coming on line appear to be leasing up well," he notes. The middle of the market, comprised of deals in the 50,000 to 150,000 sq. ft. range, "is very active," according to Wright. Meanwhile, "I'm seeing somewhat of a softening in the 250,000 sq. ft.-and-up market," he notes, "depending on the particular submarket." Rental rate increases continue to be steady, adds Wright, "but not as strong as many perhaps anticipated they would be at this point in the market."

Like Wright, Industrial Developments International (IDI) eastern region vice president/marketing Scott Helms notes that "The market is doing very well, especially when it comes to mid-sized deals." At the same time, "We're not seeing as many of the larger, 250,000 sq. ft. users as we were at this time last year."

Helms' outlook for the market is upbeat. "There is a lot of new construction under way, but absorption is still strong," he says. "There are not as many large users in the market for space as there were, but the 30,000 to 100,000 sq. ft., 'bread and butter' market is very active," notes Helms. And a market where mid-sized deals predominate "is probably a lot healthier anyway," he says, "because it spreads the risk for the developer a bit more."

Retail roundup The battle for market share among grocery store chains has cooled down, freestanding drugstores have slowed their pace of expansion, good sites are scarce, and space is plentiful in the Atlanta retail market.

Statistically, the 103.6 million sq. ft. retail marketplace was 7.7% vacant as of the end of 1997, according to figures supplied by Atlanta-based Richard Bowers & Co. This figure remained fairly constant throughout the year. As is usually the case, the 13.9 million sq. ft. regional mall sector of the market had a low 2.6% vacancy rate, with the community and neighborhood/strip segments following at 9.9% and 7.9% respectively. New construction activity is strong in the Atlanta area; some 3.9 million sq. ft.of retail product was added to the area inventory during 1997, with another 4.1 million sq. ft. under way as of year-end.

The stats may look good, but the Atlanta retail picture is not entirely rosy, according to Kirk Buttle, CCIM, of Cushman & Wakefield of Georgia. "The market as a whole looks healthy, but a lot of centers are struggling for tenants," he notes. Over the past couple of years, "Grocers jockeying for position, drugstores closing in-line stores for freestanding locations, and consolidation of big-box retailers have all left behind space that has not been backfilled," says Buttle.

This situation is exacerbated for ill-conceived centers that are not in prime locations, adds Buttle. "A center that is fundamentally correct, with good visibility and exposure, can get top rents, in the range of $18 to $23 per sq. ft., in today's market," he says. At the same time, "Struggling centers can't find retailers - and a lot of their landlords are taking it on the chin."

In the grocery store arena, "Kroger and Publix are surging at the expense of Winn Dixie and A&P," according to Buttle. Harris Teeter is a significant new player establishing a niche in the Atlanta marketplace, "but they are very selective about locations, and do not particularly want to be everywhere," he notes. Meanwhile, "Whole Foods, the nation's number-one natural/health food store, and Wild Oats, are both eyeing Atlanta," says Buttle, "and will probably locate in a lot of secondary sites that other grocers have vacated, or in centers that currently have no grocery store."

The battle among drugstores for available corner sites has slowed considerable, says Buttle. "Eckerd and CVS, the major players, are not nearly as competitive as they once were," he notes. "The day's of them taking any site at any price are not necessarily gone - but they have become much choosier."

Significant sales and new development have marked the past year in Atlanta's regional mall arena. At the beginning of 1998, New York-based Corporate Property Investors (CPI), owner of Buckhead's Lenox Square regional mall, purchased nearby Phipps Plaza, an 822,000 sq. ft. high-fashion mall anchored by Lord & Taylor, Saks Fifth Avenue, and Parisian, for a reported $200 million. Roughly one month later, Indianapolis-based Simon DeBartolo Group effectively took control of both malls with its purchase of CPI for a reported $5.78 billion.

On the new development front, an August 1999 opening is on tap for The Mall of Georgia at Mill Creek, a 1.7 million sq. ft. regional center whose development partners include Scott Hudgens Cos. and Ben Carter Properties, both Atlanta-based. Now under construction at I-85 and Georgia 20 in Gwinnett County, the mall has received commitments from several major retailers including Nordstrom's, Dillard's, Galyan's, Lord & Taylor and JCPenney.

In Douglas County, Chattanooga-based CBL & Associates is developing Arbor Place. This 1.3 million sq. ft., two-level center has received commitments from Dillard's, Parisian, Sears and Uptons.