September 14, 2007

Atlanta Business Chronicle
Martin Sinderman

The opening of the long-awaited Cobb Energy Performing Arts Centre is taking place in a Cumberland/Galleria commercial real estate market that’s primed for a growth spurt.

And at least some of that growth will be coming in the form of multi-use developments with components aimed at competing for market share with Central Perimeter and Buckhead.

At Cumberland Parkway and U.S. 41/Cobb Parkway, a short walk from the Cumberland Mall-Cobb Galleria Centre-Performing Arts Centre epicenter of the submarket, Seven Oaks Company LLC and GE Asset Management are moving ahead with their $300 million Riverwood mixed-use project.

A summer 2009 delivery is on tap for a 350,000-square-foot office tower, reports Seven Oaks Principal and CEO Robert Voyles.

Meanwhile, a deal is close at hand for a 200-room business-class hotel, he said, while sites zoned for 400 condo and loft-residential units and 90,000 square feet of shopping center space “are getting a lot of interest from residential developers and retailers.”

There is precedent for the growth.

Massive road network improvements, the multimillion-dollar redevelopment and expansion of Cumberland Mall — and the success of the AMC Parkway Point 15 movie theater — have opened up Cumberland as a new shopping/dining/entertainment destination for Atlantans living in neighborhoods just across the Chattahoochee, according to Voyles.

“These people, who have never really come to Cumberland before, have now started driving up here,” said Voyles, “which is another one of the combination of elements that are creating a real renaissance in this market.”

At Phase II of nearby Overton Park, 56,000 square feet of upscale specialty retail and restaurants in the Shops at Overton Park is aimed at the south-of-the-Chattahoochee consumer — and also at plugging a big hole in the Cumberland market, according to G.K. Johnson, principal with developer Madison Retail LLC.

“My goal is to bring in a higher grade of restaurant to meet the needs of a market with 26 million square feet of office space and 12,000 hotel rooms,” he said.

A summer 2009 opening is on tap for The Shops at Overton Park, according to Johnson.

Like the Riverwood project, Phase II of Overton Park will include residential condominium units, in this case 60 units priced in the $300,000s.

Condos are also a component of Grove Street Partners LLC’s planned office/residential/retail project, adjacent to and just south of the Cobb Energy Performing Arts Centre.

A slowdown in office construction has served the existing properties well.

With no new product under construction, the Cumberland office market “is in pretty good shape going into 2008,” said Childress Klein Properties Partner Connie Engel, who handles leasing at all but one office building at the 2 million-square-foot-plus Atlanta Galleria.

Thanks to lots of what she calls “standard, zero to 20,000-square-foot northwest (i.e., Cumberland-Galleria market) deals,” office vacancy is declining, said Engel. “And I think you are even going to see rental rates inching up a bit in 2008.”

Hines has a new office building in the “very preliminary” planning stages at Overton Park, said company Vice President Kurt Hartman.

This developer is just waiting for the Cumberland market to be ready before it pulls the trigger, he noted.

“This is one of only two markets in Atlanta that doesn’t have any major [office] construction under way,” Hartman said.

New development here will be justified at some point, he said, “and, while I don’t think we’re quite there yet, we’re optimistic we’ll get something going in the not-too-distant future.”

At the same time, with growth in the area’s retailing and the convention industry, “you are also seeing more of people that work in the service sectors, many of them first-time buyers, with and without families, which is a market demographic that hasn’t really been that active in Cumberland before,” she reports.

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