Viewpoints in Real Estate

The pandemic is reshaping Atlanta’s retail and restaurant industry, which has adapted in real time to survive. For restaurants, premiums are seen for patios and traditional QSRs are going to experiment with double and triple drive-thru lanes.

By way of example, Newk’s Eatery has reengineered its prototype from 4,000- to 5,000-square-foot units to 3,300 square feet with a more open kitchen, less inside dining, a more contemporary look, larger patios and a drive-thru.

Parking needs are evolving as well to accommodate scheduled appointments, Uber designations and drop-off and pick up stations — for shoppers and goods.

Larger kitchens are being used to facilitate more catering for pick-up and delivery, as well as reengineered menus to accommodate a dinner carryout experience to be eaten at home. These meal choices will be designed to feed a family as opposed to everyone ordering their own plate. Jim ‘N Nick’s BBQ is a prominent example of an Atlanta restaurant that quickly updated its menu and drive-thru experience to meet customer demands.

Dry-box retail stores are pushing for larger layouts to allow more of an open design for social distancing purposes. The downside is that it’s going to cost more and yield less in sales in many cases.

Footprints are going to be larger, but it’s going to be a different experience. At big-box retailers, shoppers are wearing their masks, keeping at least six feet of distance and using hand sanitizer that property managers are putting throughout their centers.

Even with these precautions, it’s encouraging to see that some stores are setting sales records. Most all grocery stores are up at least 20 percent from their pre-pandemic sales volume. Online shopping is up as well, and that will continue, but people are treating themselves to shopping in-store to get out of the house and get a change of scenery.

To also strengthen the shopping experience, there is accelerated consumer expectations for technology and mobile apps that will expedite the delivery of goods. Hollywood Feed, a holistic pet food merchant, now has instituted its own same-day delivery service, providing that service for every store in fleet. They are experimenting with other things that will allow a quicker and more technology-based interaction for pre-ordered store pick-ups too.

On the leasing side, Atlanta may be trending to more of an occupant’s market but it’s inaccurate to refer to it as an unbalanced tenant’s market. There are bankruptcies for some retailers, and in those instances everyone loses. We need each other to climb out of this. The good news is that good real estate will always be good real estate, despite the vacancies. At Columbus Crossing, the vacant Sears and Toys “R” Us now have interested tenants to backfill those boxes.

Everyone — from financial institutions to owners to retailers — have been more understanding during this time, and as it currently stands, there’s not as much fallout as what was predicted, especially as quickly as it occurred during the last recession. This time around everyone is taking a more sophisticated and calculated approach.

Most retailers have come back in strong fashion from the early days of the pandemic. With the vaccines available to us now, there’s going to be a psychological comfort for the consumer, and retailers will allow space for shoppers to take their own necessary precautions. Georgia Gov. Brian Kemp is adamant that the state won’t shut down the economy again, and incoming president Joe Biden said so as well.

Even with the downturn, new developments are underway as well, and those will have tenants that have shown they can survive in down times.

“At Monroe Pavilion, developer MAB American Management has implemented a ‘necessities of life’ shopping center crossed with the top discounters because during downturns, discounters always survive,” stated Beau Young, executive vice president at Retail Specialists, which is handling the leasing and management for the project.

Among the initial tenants that will open their doors at the development in spring 2022 include Publix, Ross Dress for Less, Ulta Beauty, Planet Fitness, Petsense, Marshalls, Rack Room Shoes and Five Below. That lineup can sustain ups and downs as they occur.

This year is almost over, thank goodness. There was a tremendous slowdown in store openings in 2020. Publicly traded retailers have to grow to meet their earning expectations, and to do that they have to open stores. For 2021 and 2022, retailers are going to reopen stores at a quicker pace to make up for lost time and delayed store openings for 2020.