Not everything's broken

As consumers tighten their belts, Atlanta retailers and developers are following suit, according to Liz Kabat Whiteside, senior vice president and principal for Dallas-based SRS Real Estate Partners.

“It's really a matter of delaying spending capital in '09. So what was once a 2010 delivery is now a 2011 delivery,” says Whiteside, who leads the Atlanta office's project leasing team. “Preserving capital in '09 seems to be the mantra.”

SRS's strategy against this backdrop is to only take on projects that are well located and which can compete in their submarket for retailers taking space in 2010 and 2011. As an example, Whiteside points to The Park at Druid Hills, a mixed-use development that includes office, hotel and 320,000 sq. ft. of retail. The project is fully permitted and slated for delivery in 2011.

“It's a very dense area that the immediate community will appreciate having. And because it's on the interstate at I-85 and North Druid Hills Road, it will have a regional draw,” says Whiteside.

Barry of Colliers Spectrum Cauble agrees. His company is currently leasing a mixed-use project across from the Georgia Institute of Technology called Tenside, under development by Tivoli Properties.

The project consists of 336 apartments and 38,000 sq. ft. of retail. Georgia Tech is centrally located downtown, near the intersection of I-75 and I-85.

Colliers Spectrum Cauble currently has leases signed with Jersey Mike's, Smoothie King, CrossFit Atlanta, Five Guys Burgers & Fries, Nail Talk & Tan and Zen on Ten. They are also negotiating leases with Gezzo's Surf & Grill, a Southwestern burrito concept, a high-end hair salon and a pizza restaurant.

“This project has attracted significant interest from retailers as it will not only service Georgia Tech students and employees, but also the large daytime population and the dense residential population,” says Morris Coleman, vice president of retail leasing for Colliers Spectrum Cauble.

Bend but don't break

Back at the Streets of Buckhead project, flexibility is the name of the game. In addition to delaying the project until 2010, Carter asked his general contractor, Balfour Beatty Construction, to reprice the job, which has resulted in $10 million in savings. That has required “a tremendous amount of estimating horsepower,” says Jeff George, the project's manager.

Balfour, which conducted its first estimates on the project five years ago, is working to qualify the Streets of Buckhead as a silver LEED-certified project under the U.S. Green Building Council's Leadership in Energy and Environmental Design program. So far, Balfour has treated enough contaminated water to fill 21 Olympic swimming pools and excavated 450,000 tons of dirt.

Carter estimates he's paying a 5% premium to build a green project, but is confident that he's got the right man for the job. “He's done a great job for us time and time again,” says Carter, referring to the project manager, George.

Indeed, Carter and George have been working together since the mid-1980s on such groundbreaking projects as the nearly 2 million sq. ft. Mall of Georgia, which opened in 1999.

“It's really been a task to quickly be able to update Ben [Carter] and his team with accurate pricing so that he can continue to measure and make decisions and make his deals,” explains George.

“We've had to keep up with them, measuring all the ‘what ifs’,” he adds, “and trying to build a project that fits the need and the market.”

Sibley Fleming is managing editor.