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Two-story retail building located in the heart of downtown
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167,488 rentable square feet
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Location: Doraville, GA
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Land Area: 14.8 acres
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Year Built: 2008
ASSET MANAGEMENT, LEASING & PROPERTY MANAGEMENT
PEACHTREE PAVILION
Doraville, GA
Well-situated at the highly-trafficked intersection of I-285 and Peachtree Industrial Boulevard inside the Atlanta Perimeter, the center is adjacent to not only a Brands Mart and a Lexus dealership but also Assembly, a planned 10,000,000 square foot mixed-use real estate development on the site of a former GM assembly plant; its gentrifying effects should fuel economic development in the area.
OPPORTUNITIES / PURCHASE
Peachtree Pavilion, a two-story, 167,488 sf retail center located in Doraville, GA (Atlanta MSA). Was 57% leased at purchase. This center is anchored by H-Mart, a well-established Asian grocery chain with 59 stores across the US, UK, and Canada (including five locations in Metro Atlanta).
We had the vision to see that this represented an opportunity to unlock substantial value via a synergistic combination of highly attractive lease terms for prospective tenants, an aggressive leasing program, and Urbana’s proven property management abilities.
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OPPORTUNITIES / PURCHASE
Peachtree Pavilion, a two-story, 167,488 sf retail center located in Doraville, GA (Atlanta MSA). Was 57% leased at purchase. This center is anchored by H-Mart, a well-established Asian grocery chain with 59 stores across the US, UK, and Canada (including five locations in Metro Atlanta).
We had the vision to see that this represented an opportunity to unlock substantial value via a synergistic combination of highly attractive lease terms for prospective tenants, an aggressive leasing program, and Urbana’s proven property management abilities.
These factors, together with the fact that downside risk was limited (given that Anchor cash flow alone covers fully 90% of mandatory Year One expenses), made for a highly attractive investment opportunity with a highly favorable risk-reward relationship.
VALUE ADD / OPERATING STRATEGY
Urbana’s approach to evaluating Peachtree Pavilion was a conservative one, an approach geared to minimizing downside while maximizing upside.
Toward this end, the NOI figures that we underwrote allowed us a full three years to lease up the remainder of the center at modest market-friendly rates with generous TI buildouts. When we closed the recent leasing activity was strong, and we firmly believed that highly competitive rates, generous buildouts, and an aggressive leasing effort was going to allow us to achieve lease-up within our three-year timeframe. What’s more, H-Mart allowed us to pursue tenants focused on the Asian community, a component of the leasing strategy that has proven highly successful at other H-Mart-anchored retail centers.
OPPORTUNITIES / EXIT
Peachtree Pavilion was eventually sold and realized a highly attractive return. Within our current hold period the property recovered from a 38% vacancy factor, with future stabilization at 95% occupancy and realizing its full capitalization potential. Having analyzed recent market trends involving Asian specialty grocers that suggested future stability for the property anchor H Mart, Urbana may decide to sell or refinance the asset for a long-term hold.