We've devoted 4,000 words and nine pages to our cover story, “2002 forecast.” Admittedly, I still can't predict with any certainty what the eventual outcome will be for commercial real estate in the year ahead. Our package reminds me of a weather forecast delivered by meteorologist Tom Skilling, a locally famous personality on WGN-TV in Chicago. We can dazzle you with colorful charts, lengthy analysis and scientific probability, but at the end of the day we provide no guarantees, just the privilege to revise our forecast as often as necessary.

As journalists, the temptation always is to hook the reader by making bold predictions. But that approach can leave us with egg on our faces, if we're off the mark. In July 1998, as Internet fever gripped the country, Time magazine weighed in with a cover story, “Kiss your mall goodbye.” The story detailed how the Internet was changing all facets of our lives, including shopping. The International Council of Shopping Centers complained the headline was too sensational.

The organization appears to have been vindicated. Three years after that article was written, the Internet is no longer perceived as a direct threat to malls. The right demographics, tenant mix and location are what drive retail sales. The Internet is an ancillary form of revenue in most cases. Just because people can sit at home and order goods online, doesn't mean they will. Many venture capitalists (remember those guys?) who invested in failed dot-com ventures learned that lesson the hard way.

Atlanta retail market defies logic

Our 2002 forecast coverage includes highlights from “Emerging Trends in Real Estate,” a widely respected forecast prepared jointly by Lend Lease Real Estate Investments and PricewaterhouseCoopers. The conclusions are based on interviews with 150 industry professionals. It's an excellent forecast tool for assessing the big picture.

But the macro trends don't always match up perfectly with what is occurring on the ground in some markets. For example, “Emerging Trends” concludes the following about retail nationally: “A weak economy promises to exacerbate retailer troubles and bleed returns from shopping centers. Unless and until retailers weed out formats and development shuts down — controlling the supply of new space — many equity and debt investors will choose to bypass shopping centers altogether.”

The capital of the Southeast must not be listening. Investors apparently haven't lost their enthusiasm for retail product in metro Atlanta, where this past month alone two large malls opened. The Mall at Stonecrest, a 1.3 million sq. ft. mall located in Lithonia about 30 miles southeast of Atlanta, debuted Oct. 22. Forest City Enterprises and Cadillac Fairview co-developed the retail complex, which was more than 90% leased at opening. In reading comments expressed by shoppers, it's clear that that the mall fills a real void for residents in east DeKalb County.

Discover Mills, a retail and entertainment center located 25 miles northeast of downtown Atlanta in Gwinnett County, opened Nov. 2. The Discover Mills center includes 1.2 million sq. ft. of GLA and is a joint venture project of The Mills Corp. and Kan Am, an investment and advisory company.

What's amazing to me is that the addition of Stonecrest and Discover Mills is the latest in a wave of retail development throughout the Atlanta region that began in the late 1990s. The 1.7 million sq. ft. Mall of Georgia, developed by Simon Property Group and Ben Carter Properties, opened in Gwinnett County in August 1999. And the 1.2 million sq. ft. Arbor Place Mall, west of Atlanta in Douglasville, developed by CBL & Associates, debuted in October 1999. How could so much retail be built in one area at a time when the country is perceived to be over-stored?

The tremendous population growth of Atlanta clearly has been the catalyst for development over the past decade. Bernard Haddigan, national director for Marcus & Millichap's National Retail Group, predicts that Atlanta's population will grow from 4 million to 5 million by 2010. “There may be a little bit of bloodletting and increased foreclosures” in the retail sector nationally in the next 18 to 24 months, Haddigan predicts, but well-located properties with good product should fare well. The smart investor will recognize the value of looking at the long term.

In any market, the combination of population growth, high consumer demand and ideal site location should be a great way to stave off an economic downturn. And if that prediction fails to materialize, we reserve the right to re-forecast.