ATLANTA, May 14, 2020 – As economic forecasters look for glimmers of hope in an economy rocked by the Covid-19 pandemic, a local real estate developer is banking on the stability of a market segment that has successfully adapted to new realities: grocery stores.
Atlanta-based Branch Properties recently acquired land to build a shopping center in Tucker and closed a loan to build another in Dunwoody. The common denominator is both centers will be anchored by Publix supermarkets.
“Our business model has long been based on developing and revitalizing shopping centers anchored by grocery stores,” said Jesse Shannon, chief investment officer of Branch Properties. “Grocery-anchored retail has lagged behind the multi-family and industrial asset classes in terms of rent growth and exit capitalization rates for the last 10 years but has a proven history of providing strong risk-adjusted returns in times of economic disruption. The pandemic has provided an exaggerated case study on grocery performance during economic shocks. After all, food is essential to life.”
Branch Properties is moving forward with its business strategies based on the belief that grocery stores could serve as a bellwether of economic recovery within the real estate market.
When consumer confidence is waning and capital for new real estate development is potentially more difficult to secure, one thing remains constant: consumers buy groceries. Coupled with historically low interest rates, supermarkets and shopping centers anchored by grocery stores continue to be good investments for companies like Branch Properties.
“The retail acquisition market may be somewhat stabilized in future months by the strength of supermarket sales,” Shannon said. “While other types of retail stores have been temporarily shuttered, grocery sales remain strong. Supermarket tenants continue to pay rent, which helps keep these centers afloat while we wait for the rest of the retail sector to reopen.”
Perimeter Marketplace, Dunwoody, Ga.
Branch Properties has secured capital to begin development of Perimeter Marketplace, near the Perimeter Mall in Dunwoody. The developer owns 10 acres of land at the northwest intersection of Ashford Dunwoody and Meadow Lane roads. The intersection is well-traveled with 52,000 vehicle trips per day, and more than 110,000 residents live within three miles of the intersection.
A 25,147-square-foot Publix will anchor the new center, which will be comprised of multiple retail tenants occupying an additional 39,150 square feet. Publix and several other future tenants have already signed leases.
Hugh Howell Village, Tucker, Ga.
Branch Properties recently purchased 14 acres in Tucker to develop Hugh Howell Village. The developer plans to build a neighborhood shopping center anchored by a 48,000-square-foot Publix, which will relocate from a nearby shopping center about a quarter of a mile away.
Hugh Howell Village will sit on the northeast corner of Hugh Howell Road and Mountain Industrial Blvd. In addition to the new Publix, Branch Properties plans to develop about 35,000 square feet of retail shops in three new buildings and two new outparcel buildings.
The site is attractive due to its proximity to I-285, which is less than 4 miles away, and being on a high-trafficked corner with over 60,000 vehicle trips per day and strong demographics within a 3-mile trade area.