Orkin Family Buys 'Bulletproof' East Cobb Retail Center For $600/SF+
A newly delivered East Cobb shopping center, home to one of the state's first GreenWise grocery stores, has sold for a hefty per-square-foot price at a time when the brick-and-mortar retail industry is filled with angst.
Orkin & Associates, the real estate investment arm for the Orkin family, purchased Sandy Plains Marketplace, a 73K SF shopping center that opened last year, for $43.8M from Fuqua Development. At $601 per SF, it is one of the most valuable shopping center trades in Metro Atlanta's history.
The center, at 3460 Sandy Plains Road NE in Marietta, was developed in a joint venture between Fuqua and Batson-Cook Development Co. last year as a home for GreenWise Market's first foray into the Atlanta area. GreenWise is a division of Florida-based grocery store chain Publix Super Markets. GreenWise focuses on organic and natural foods. It operates stores in Tallahassee, Lakeland and Boca Raton, Florida, as well as Mount Pleasant, South Carolina.
Orkin's purchase did not include an independent self-storage facility that sits on the same property, Orkin Vice President Joshua Barnes said.
Retail investments in Metro Atlanta have been relatively steady since 2014, according to data provided to Bisnow by CBRE. Last year, investors spent $7.53B on metro shopping centers, power centers and other retail real estate. The year before, that total was $7.35B. CBRE officials said retail trades in the region have hovered around the $7B mark.
The average price for a multi-tenant shopping center was $227/SF last year, according to Marcus & Millichap, with capitalization rates around 6.7%. But not all shopping centers are created equal, and there are factors as to whether landlords selling retail properties hit the jackpot with investors and crush those averages.
“If it doesn't have a grocery store and you have a big-box center ... the odds of you selling it are slim and none,” The Shopping Center Group partner Neal Pringle said. "The buyers for that kind of product, they're on hold on the side of the pool."
By and large, grocery-anchored neighborhood centers in markets with strong demographics, or infill urban properties, will command the highest prices. That is especially true if a center is anchored by one of the four grocery sweethearts of Atlanta: Whole Foods, Kroger, Sprouts and Publix, CBRE First Vice President Kevin Hurley said.
“I think a lot of people view grocery as a category that remains somewhat bulletproof to the e-commerce solutions,” Hurley said.
Sandy Plains Marketplace'ss location at Sandy Plains and Shallowford roads puts it in the heart of East Cobb — the most affluent area of Cobb County.
“That submarket, in particular, has always been a fan favorite,” Hurley said.
While the center is anchored by GreenWise, it also has a host of retailers and restaurants that are in growth mode, including Bad Daddy Burger Bar, Jim 'N Nick's Bar-B-Q, breakfast eatery First Watch, pet supplier Hollywood Feed and Banfield Pet Hospital, Pringle said.
“These are all kind of Amazon-adverse tenants. That's the key to having a successful development these days,” he said. “The doom-and-gloom [over retail] is really more oriented toward the big-boxes that have been affected by Amazon. You can see that all these restaurants and tenants are not really in that category. [Fuqua]'s got a great lineup of tenants that he can take with him from location to location.”
As for Orkin & Associates, still controlled by the Orkin family that founded Orkin exterminating company and sold it to the Rollins family in the 1960s, Sandy Plains Marketplace was part of a larger 1031 exchange with Fuqua.
Orkin sold land near the Mall of Georgia to the prolific retail developer who, in turn, started developingh the Exchange at Gwinnett mixed-use project on it, Barnes said.
Barnes didn't disclose the value of Orkin's overall portfolio, nor did he say how much the family plans to invest in this year. But the firm focuses on retail in the northern Metro Atlanta crescent above Interstate 285, focusing more on location and area demographics than the bricks and mortar.
“We really look at long-term value on a piece of land. Less so what is on it,” he said. “We like retail in spite of what you see in the press. Retail still has a very low vacancy rate. There's been a lack of supply and construction in retail.”
SRS Real Estate Partners Managing Principal Kyle Stonis said many 1031 exchange investors are looking to markets like Atlanta for retail purchases given the growing population and strong economy.
“What we're seeing is with the influx of people in the marketplace ... investors are putting a lot of faith back into Atlanta," Stonis said. "I think what you see is like the Orkin family, 1031 buyers coming from all over the country to buy in Atlanta given all the attention Atlanta is getting these days."
