ASSET MANAGEMENT, LEASING & PROPERTY MANAGEMENT
Two-story retail building located in the heart of downtown
167,488 rentable square feet
Location: Doraville, GA
Land Area: 14.8 acres
Year Built: 2008
Situated at the bustling intersection of I-285 and Peachtree Industrial Boulevard within the Atlanta Perimeter, this center boasts a prime location. Notably, it is adjacent to Brands Mart, a Lexus dealership, and Assembly, a planned 10,000,000 square foot mixed-use real estate development set on the grounds of a former GM assembly plant. The anticipated gentrification resulting from Assembly's development is expected to drive economic growth in the area.
OPPORTUNITIES / PURCHASE
Peachtree Pavilion, a two-story retail center spanning 167,488 square feet, is located in Doraville, GA, within the Atlanta Metropolitan Statistical Area (MSA). At the time of purchase, the center was 57% leased, with its anchor tenant being H-Mart—a well-established Asian grocery chain with 59 stores across the US, UK, and Canada, including five locations in Metro Atlanta.
Recognizing the potential for substantial value creation, we identified an opportunity to leverage synergies through attractive lease terms, an aggressive leasing program, and Urbana's proven property management abilities. These factors, coupled with the limited downside risk (given that the anchor cash flow alone covered 90% of year one expenses), made this investment opportunity highly attractive, offering a favorable risk-reward relationship.
VALUE ADD / OPERATING STRATEGY
Urbana''s approach to evaluating Peachtree Pavilion was conservative, aimed at minimizing downside risk while maximizing upside potential. To this end, the underwritten NOI figures allowed for a three-year timeframe to lease up the remaining portion of the center at market-friendly rates, with generous tenant improvement (TI) buildouts. At the time of closing, recent leasing activity was strong, and we were confident that competitive rates, generous buildouts, and an aggressive leasing effort would lead to achieving full lease-up within the three-year target. Furthermore, H-Mart's presence allowed us to focus on tenants catering to the Asian community, a leasing strategy that had proven successful in other H-Mart-anchored retail centers.
OPPORTUNITIES / EXIT
Peachtree Pavilion was eventually sold, yielding a highly attractive return. During our hold period, the property recovered from a 38% vacancy rate, achieving future stabilization with 95% occupancy and realizing its full capitalization potential. Based on our analysis of recent market trends involving Asian specialty grocers and the anticipated stability of H-Mart as the anchor tenant, Urbana may consider selling or refinancing the asset for a long-term hold.