Atlanta Land Group - Volume 2, Issue 5

The real estate industry has many conventions and conferences throughout the year and throughout our country. Typically an association will organize these events such as the National Association of Realtors (NAR). These forums provide market information and opportunities that we bring back to our clients. In the month of May, ALG put Robert Armstrong on a plane that landed at the Global Retail Real Estate Convention in Las Vegas sponsored by the International Council of Shopping Centers (ICSC). The Shopping Center Group's social mixer is the "Bell Cow" event of the convention. Optimism and expectations of better times to come were the pervasive. ALG would like to thank The Shopping Center Group for their continued commitment to host the most sought out gathering at the ICSC convention year after year.

The conference attendance was down this year. Many of the traditional retail developers did not attend, some maintained their presence as a statement to their continued commitment to this industry. Many developers have created new tenant driven concepts to help stimulate national retailer's interest in their proposed centers. The reality of today's market conditions dictate that there has to be more than just main street at main street locations and desirable demographics to garner the interest of retailers who have cut back the number of anticipated store openings by 50% to 80% from just two years ago.

Some sectors of the retail market are somewhat vibrant. Value price fast food and auto maintenance / service sectors appear poised for continued expansion. Freestanding end users can still find capital to bring "sticks and bricks" out of the ground. Grocery store developers appear to be encountering many hurdles in the capital markets. Many lenders are capping the amount of side shop space to be included alongside of the anchor's space when structuring their loan package. Additionally, lenders have little or no interest in funding acquisition costs for outparcel components for these neighborhood centers. Some developers are having success in convincing their seller (land owner) to option the outparcels to them with take downs that align with the outparcel user's closing or build-to-suit commitments.

Some of the hard lenders of the past are becoming the new opportunity (vulture) funds of today. More to come on this subject in our next newsletter...

We invited Matt Grose, VP of Development with Jamestown Properties, to our May sales meeting. Jamestown Properties is a real estate investment firm – syndicator of German equity. This was a great opportunity for ALG to better understand what requirements are sought after when dealing with particular real estate investment funds. A few notes we would like to share:

Various investment options based on the amount of equity and property type are offered

Seek assets in New York, San Francisco, Boston, Washington D.C. and Sunbelt Cities such as Charlotte

Various methods to implementing these funds – Opportunity funds raise capital and then invest and Core funds indentify the properties for fund raising

Currently, looking at late 90's cap rates as a benchmark for underwriting assumptions

Currently, looking to purchase a loan to own or where the likelihood is to own the property

Will attach one or two smaller properties to the "Signature Property" to create a Core fund package - piggyback off what is considered the premiere property in that particular fund

Jamestown minimum investment threshold is usually $20 million

We would like to announce that ALG will have a new office address as of Wednesday, July 15th of 2009. Our new location will be in the City of Chamblee, Georgia. This location will provide more convenient access and amenities as our company grows into the future. Please make note that our new address will be 3580 Pierce Drive, Suite 150, Chamblee, Georgia 30341. Our phone number and email addresses will remain the same.