22 minute read
REAL ESTATE
By Robyn Spizman Gerson
As the landscape of real estate continues to shift, the future of the Atlanta commercial market has been the subject of much debate. The AJT spoke to four well-known commercial real estate experts to get their thoughts, forecasts, and reflections on the industry. Steve Selig, president and chairman of the board of Selig Enterprises, a pillar of the commercial real estate community said, “My grandfather Ben Massell started the family-owned company in 1918 and we are now over a hundred years old. My sister Cathy Selig Kuranoff, her son Greg Lewis, and my daughter Mindy work together in our family business. My son Scott was an integral part of our company until his untimely death almost four years ago. Atlanta is such a great city to be in and an excellent place for real estate today. The thing that is driving a lot of companies to our city is diversity. Businesses want to go where the talent is and Atlanta is not only diverse, but it also has other important advantages. Atlanta offers a lower cost of living, great weather, a highly educated workforce, and a business-friendly climate. Our transportation network is appealing, with three interstates and parallel runways at the Atlanta airport. There’s a lot of energy here.” When it comes to new office space, Selig says his company is focusing on Midtown. “Our assessment is that companies are putting their offices where they have the best advantage to recruit and retain Atlanta’s top employees, who want to live in a place that is eclectic, active and has a community feel. We are completing a 700,000-sq.ft. office building in the heart of Midtown, which is fully leased to two companies, prominent law firm Smith, Gambrell & Russell and tech giant Google. Midtown makes up only 15% of the greater Atlanta office market, but, in the last five years, has realized over 50% of the Atlanta region’s absorption. In addition to being bullish on Midtown’s core market, we are equally optimistic on West Midtown, where we are developing ‘The Works,’ which was my son Scott’s vision, and includes a beautiful park named in his memory. It will be an 80-acre adaptive re-use development in the heart of Atlanta’s Upper Westside, and include retail, dining, office space, residential, and greenspace.”
The Standard located in Midtown
Steve Selig, president and chairman of the board of Selig Enterprises.
Younger generations have different priorities around work-life balance, and that’s driving new trends. “Young people used to find the job and then look for a place to live,” Selig reflected. “Now they choose where they wish to live and then find a job. Atlanta has racial diversity and particularly, because of the Atlanta University Systems, it has one of the highest concentrations of educated, diverse talent in the country. High tech companies looking to diversify their workforce realize there isn’t a better city in which to do so. We also own a lot of retail, and that sector has been robust particularly in Buckhead. Although regional malls have become quite vulnerable, the neighborhood centers we focus on all around the city are doing very well. As the pandemic is drawing to an end, we have observed a robust increase in demand for these lifestyle centers.” Relationships with the community are also important. Selig says he wants to see more individual stores that serve the community and build trust over time. “We are aware that we are dealing with someone who lives in the neighborhood, which impacts our decisionmaking,” he said. “I continue to be very excited about
Jack Halpern, chairman and CEO of Halpern Enterprises. Matt Shulman is CEO of The Ardent Companies, a dynamic asset management firm.
Scott Horowitz has been active in Atlanta commercial real estate brokerage since 1992.
the commercial real estate scene here, as Atlanta has such a vibrancy about it. Yes, we have issues that must be solved, and I think they will be, but I’m clearly bullish on Atlanta. We’re developing quality projects and have a very strong team of employees. Our portfolio is diversified and includes office, retail, industrial and residential, and Selig Enterprises is proud to live, work and be headquartered in Atlanta.” Jack Halpern, chairman and CEO of Halpern Enterprises, said: “There is a lot of money bidding up the price of real estate these days, because there are not too many attractive alternative places to invest. That has been partly because of the pandemic, but also a result of the slowdown in new housing construction that has occurred in recent years. Demand has exceeded the supply, so the price of real estate has increased.” There have also been fundamental shifts in consumer shopping and buying habits, Halpern said, partially due to COVID-19, but also due to the convenience of shopping online. “The internet has made it easy to shop from home, which has certainly had a big impact on retail stores — particularly those located in enclosed malls. People no longer look at shopping as a fun recreational activity and are more interested in getting what they want or need as quickly as possible. That cultural shift, along with the consolidation that has taken place among retailers and the ‘category killing’ impact of big box stores, means that there are fewer opportunities out there for mom-and-pop retailers to find a niche and be successful.” Halpern added, “To those of us in the real estate business, the biggest impact of these changes has been how our mix of tenants has evolved over time. Grocery stores are doing more business than ever because of the shift to eating at home, which was also a reaction to COVID. In addition, there are certain things that can’t be purchased over the internet. We have seen an increase in demand for space from service-related businesses, like physical therapists, nail salons, and hair salons. Restaurants had a tough time last year, and a lot of them did go out of business, but people are cautiously going out to eat again. Those who became efficient at filling take-out orders and offering outdoor seating have tended to survive and are now doing well.” But there are always winners and losers, and last year was particularly challenging for many retailers, he said. “Our goal as a landlord was to keep as many of our tenants in business as possible, and for the most part we were successful. We were willing to be flexible and defer some rent payments, on a case-by-case basis, and that helped a number of our tenants to make it through the difficult times. As a result, our occupancy today is actually better than it was before the pandemic.” Scott Horowitz has been active in the Atlanta commercial real estate industry since 1992, with some 450 lease or purchase transactions totaling more than $400 million under his belt. His strength is representing companies looking to lease or purchase warehouse space to store and distribute goods. He said, “The market was strong prior to COVID-19, but the pandemic accelerated the expansion of e-commerce based on the consumer learning the efficiency of online ordering. Companies like Amazon, Home Depot, Lowe’s and Wal-Mart continue to need smaller distribution centers close to the perimeter to deliver goods more efficiently to the customer. Atlanta has grown to be a top 10 industrial market in the country, based on our demographics and interstate system. Industrial developers continue to acquire land to keep up with tenant demand and have developed more than 20 million sq. ft. in the past several years.” He thinks Atlanta’s low business costs, abundance of labor, and access to ports make it a national distribution hub, “which is the impetus behind our current bull market.” Matt Shulman, CEO of The Ardent Companies, a dynamic asset management firm, said, “Our team of nearly 50 professionals manages over $1.5 billion on behalf of our investors. With headquarters in Buckhead’s Piedmont Center, and additional offices in Charlotte, New York City, and London, our presence allows for us to not only have a local or regional lens on the pandemic’s impact on the real estate market, but also a global one.” The pandemic has been driving people to explore intimate locations, he said. “It has advanced the trends in office and retail to an experience driven by quality amenities, spaces, health and wellness, and of course, food. People no longer want to feel part of the masses. Instead, they want to have a connection to the outside world, while, interestingly enough, they are not willing to sacrifice convenience. Employers and retailers have to compete with Zoom and Amazon to get people out of their homes. This not only adds pressure to real estate companies, but also to an individual company’s ability to bring its employees back to the office. Offering an option to work remote or in the office, Ardent have enjoyed seeing the great majority of our employees returning to the office for a few months now, but frankly the bar has been lifted with flexibility and remote working now competing with the benefits of collaboration and face-to-face encounters. This dynamic is creating a friction that we believe is not only healthy but will also allow for landlords willing to work with their tenants to be at an advantage in a changing world.” Shulman noted that “on the housing front, money continues to pour into single family homes, both for sale and for rent, as shelter continues to be an essential focus. After years of undersupply, developers are actively pursuing new projects to meet the demand.” “Atlanta will continue to see tremendous migration due to job growth,” he predicted, impacting “both the housing and office markets. We are thrilled to share that after five years of work and four separate closings, the Piedmont Center campus is now under one ownership. Sole ownership of the 45-acre, 2.2-million-sq.-ft. office assemblage on Piedmont Road, between Lenox Road and Roswell Road, allows us to transform a once sleepy run-of-the-mill office park into a top-quality office experience with a full scope of amenities that are unparalleled in Buckhead or other parts of Atlanta. The initial phase of repositioning focuses on continued improvement of common areas and green space, as well as the creation of best-in-class conference areas. Conference facilities along with flexible spaces and terms are at the top of many tenants’ priorities, and we aim to meet these tenant needs. Healthy living and a safe environment are also top priorities, and therefore we are doubling down on the property’s green spaces, access to the outdoors, 1.2-mile walking trail, connection to Path 400, and various workout facilities.” Shulman predicts that demand for space will only increase, as Atlanta continues to grow as a dining destination, home to talented chefs with innovative ideas. “We are excited to be sharing our visions with them to meet their creative goals,” he said. “To be a real estate investor, one has to be an optimist with a very cautious lens. There will be lingering headwinds caused by the pandemic in office and retail, but we believe that a quality local economy and talented investors are up to the challenge.” ì
appraiser to appraise your home in order to ensure that top dollar is being pursued in the exact market you are selling in. Many sellers underestimate the value of their home. I think a trend that will continue is the desire for flexible space in the home for exercise, a home office, play area, and outdoor space of any kind. As restaurants hold on to the outdoor space they built during the pandemic, I think homeowners will want to also continue to create great outdoor spaces for themselves and entertaining guests.” Debbie Sonenshine, a 40-year veteran of the residential real estate business, thinks the seller’s market may be swelling some heads. “While it is clearly a seller’s market, sellers need to be realistic,” she said. “Homes that are updated, in perfect move-in condition, located in a great school district and properly priced, are selling immediately at high prices. When evaluating offers it is important to consider all the terms, not just price. We are seeing buyers jump and make a high offer after seeing a home for just a few minutes and then having buyer’s remorse. Sellers should work with their realtor to develop a strategy before listing the house for sale.” She added, “Buyers should be ready to act quickly. Just in the last couple of weeks, the market has changed. The frenzy has slowed a bit and the number of homes on the market is increasing. The end of the summer often brings a slower pace to sales, as school is about to start and people are taking their last vacations of the summer. I am seeing many people (grandparents, couples with young children, and even young singles) relocate to be closer to family. I think the focus on family and a healthier lifestyle is very positive. The basics of real estate are always the same, but there is something new every day, which is why I love it!” Randolph Kallenberg, of Keller Knapp Realty, specializes in commercial, small multi-family and residential. Regarding issues that consumers should know about, he said, “A lot of people like new construction and want a new spec build, but it’s hard to find in-town. The problem is people get caught up in the moment and they want that property and sometimes don’t think about the builder or the details. That house is probably going to be taken quickly and they’ll pay the premium. The problem with that is that buyers don’t do due diligence and that’s what a real estate agent should do.” Kallenberg said that buyers might not be aware of all the issues, including flooding. Before making an offer, he suggests, “look at the drainage situation and statute of limitations so you are protected. Drainage is a huge problem in Atlanta, since it’s hilly, or if a house is built at the bottom of a hill, you could have flooding. No one wants a flooded basement, so buyer beware, and work with an agent who will educate you about what you need to know.” Christiane Schendowich, a 35-year Phoenix Award Recipient and realtor at Harry Norman Realtors said, “For sellers it’s the best time to sell your house, due to low inventory and high demand. Due to COVID, everything has changed. Because of the pandemic, sellers didn’t want to put their houses on the market and now people are ready. Specific zip codes and price ranges are in high demand. Most people are moving from the city to the suburbs because they want to work from home, which they got used to, and now people want larger homes.” A personal letter that shares why you want the house is another key idea that Schendowich believes can help. “It is an old-fashioned way to work, but if you really love the house, you say what you feel, that you love the layout, the kitchen and put it in writing. An example is: ‘As soon as I entered your house, I could see our family living here. We appreciate the details you put into the interior.’ Share what you observe to the seller and how beautiful their home is. In my experience, the seller does not always pick the highest price. They can see when a new buyer is a perfect fit for the home they’ve loved and they will envision their family traditions continuing. A homeowner has an emotional attachment to their home, so a letter that you share can sometimes make the difference.” “Today, a house that is pristine sells for around 30% more,” she added, “but right now we have a seller’s market, so it’s not as important to have a move-inready house. In a balanced market, by the end of the year and next year, it’s important that the property is decluttered and super clean. Prepare, plan and sell.” Knowing when to walk away can be just as important. “If you think you are paying too much money, say goodbye,” she suggests. “Know how far you’ll go and try not to be emotionally attached and stick to your principles.” ì
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Producer’s Ambitious Vision for Pullman Yard
By Marcia Caller Jaffe
The immersive Van Gogh experience put Pullman Yard on the radar. Or maybe vice versa, Pullman Yard put Van Gogh on the map. Either way, it was all part of the master plan initiated by producer-visionary Adam Rosenfelt, head of Atomic Entertainment.
Now a Candler Park resident, Rosenfelt is turning the 27-acre site in Kirkwood into a city within a city. “I want Pullman Yard to be the Red Rocks [Park and Amphitheater near Denver] here in an urban industrial platform with world class art and entertainment,” he said. Recall that Kirkwood was once an 1870s streetcar neighborhood known now for its diverse population and historical architecture, and sprinkled with colorful graffiti.
Rosenfelt grew up in New York City, graduated Cornell University, and headed for Los Angeles at 22. As a producer, he has made movies with the likes of Matt Damon, Kevin Costner, and Ryan Reynolds. He and his wife Maureen Meulen, also a film producer, researched several states from Texas to Florida to land just the right “prized” location.
He noted, “We were inspired by Atlanta as the best possible place because of its history with civil rights and as a train yard. The tax advantages were also terrific, as Governor Deal granted us the right to purchase. When we first opened the site, COVID-19 hit. Pre-COVID, we examined the Pullman site as historical and ideal for movie and TV production, perhaps the best in the world.” Note that Atomic paid $8 million in 2017, beating out four other bidders, the latter all local.
The site was originally farmland when the Pratt Engineering Company purchased it in 1904 to manufacture sul-
furic acid and gasses used in soda drinks. During World War I, it produced munitions. When the Pullman Passenger Rail Company took over in 1926, it used the space to repair railroad sleeper cars, eventually leaving behind construction shipping containers, welder prototypes, and agricultural tools that today provide multiple options for rotating dining pop-ups, chef’s market, food trucks, restaurants (The Abby Singer, known for its “Juicy Lucy” burger), and a moving alcohol bar on a retrofitted dolly. Rosenfelt anticipates that residential and office space is on the way, in addition to film production stages. Alliance Adam Rosenfelt and Maureen Meulen are both producers at work and at their Candler Park home with their two children. Pullman Yard takes advantage of the oddly shaped buildings, bricks, and tools left behind by previous occupants.Compassionate and ResponsiVe Pullman Yard has been hosting world-renowned pop symphony events outdoors.
Family law RepResentation sinCe 1991. Residential, for example, is planning 355 apartment units to enhance the “live work play.” Note that Georgia purchased the Compassionate and RESPONSIVEproperty in the 1990s and allowed it to sit
Family Law Representation vacant for decades. Van Gogh: The Immersive ExperiSince 1991.ence, which draws about 3,000 unique visitors in a single day, will expire at year’s end. A monthly Pullman Pops outdoor symphony event has also been a wild success. Rosenfelt enthused, “I was blown away by our sellout concert — with a 45-piece orchestra and world-class conductor. Because of our unique flexibility, we were able to execute a ‘rain plan’ in an adjacent building as a second venue in 24 hours. It turned out we had clear weather and it wasn’t needed; but we showed we could do it!” Tickets started at $49 and went up to $890 for a group of 10. Rosenfelt described his own strengths as “identifying talent, vision in selecting property, and execution.” Now, he relates, “I’m an older ‘hands on’ parent at 51, with roots planted here in Atlanta and juggling all the fun parts. Whether you are in intellectual property or just property, both disciplines have applicable skills. You could say, ‘I can find talent and just plain execute!’” ì
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48 | SEPTEMBER 15, 2021ATLANTA JEWISH TIMES
Mortgage Lending During the Pandemic
By Robyn Spizman Gerson
While some buyers are putting down all-cash offers, loans are still a vital part of the process. The AJT spoke to professional mortgage lenders to find out what you can do to improve your odds and transform your transaction. According to Marc Garfinkel, a consultant at Prosperity Home Mortgage, “a real estate agent is your coach, guiding you through the purchasing process of a home, while a mortgage lender is your quarterback, helping you secure your financing.” “Navigating the mortgage lending market can be challenging,” Garfinkel said. “My goal is to give buyers the confidence to purchase their dream home and sellers the reassurance that buyers will be able to close. Since most pre-approval letters can be easily obtained online, there is more to the process that needs to be considered in order to secure a mortgage. An authentic approval can only come from an underwriter who will review the loan application and subsequent documents to ensure that it meets the investor requirements. In doing this, the agent can position the buyer to make the strongest offer.” Especially in today’s cutthroat market, buyers need to stand out from the crowd. “There are so many things to consider during due diligence,” says Garfinkel. “A loan officer’s job is to reduce risk. It is still a tremendous opportunity for anyone to secure a mortgage with historically low rates or to refinance, as well. Homeowners or first-time buyers should take advantage because no one knows what the market will bring tomorrow.” Reece Cohen, of Atlantic Bay Mortgage Group, agrees. “The number one thing buyers should be aware of in this
Marc Garfinkel, mortgage consultant at Prosperity Home Mortgage.
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Reece Cohen of the Atlantic Bay Mortgage Group. Seth Einstein is senior vice president of a large Atlanta financial Institution.
current market is the need to be approved prior to making an offer on a home. The market is so competitive that a pre-qualification will not be sufficient, as most contracts will have little or no financing contingency days. A borrower needs to work with a lender who will get them approved by underwriting up front before making an offer on a home.” Time is of the essence, so Cohen suggests being prepared. “I see most homes for sale getting dozens of offers, including many in cash,” he said. “If a buyer wants to have a legitimate shot at winning a bidding war, they need to be able to proceed with short contingency periods to compete with cash offers.” Seth Einstein is the senior vice president of a large Atlanta financial institution that provides real estate financing to developers and investors focused on non-owner-occupied, income-producing commercial real estate. He said that “from the investment side, clients are looking to obtain debt financing to acquire, develop and construct commercial real estate such as apartments, retail shopping centers, hotels, and office buildings. A big contributor to the success of an investment property is the ability to obtain favorable repayment terms, like the mortgage interest rate and amortization schedule. Investors have been able to borrow at such low rates basically since the great recession, a mechanism used by the Federal Reserve to stimulate growth during periods of economic decline and uncertainty.” Interest rates had already been rising when COVID-19 hit. As Einstein sees it, “The concern moving forward is inflation due to the trillions of dollars pumped into the system. Inflation typically raises interest rates, and when interest rates are high, it becomes more expensive to borrow money from a bank. And, unlike getting a residential loan, inflation also means high construction cost and labor, all of which could derail an investment project. At the end of the day, mortgage interest rates are a key component to the success of an investment property and are strongly tied to the current economic environment. It will be interesting to watch if or when interest rates do start to rise in the not-so-distant future and the impact it could or will have on our economy.” ì
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