CPN - March 2009 - (Page 12) MARKET INTELLIGENCE ATLANTA MARKET PROFILE that are willing to come in and backfill that space.” The metro area added 3.8 million square feet of retail space in 2007 and another 2.1 million in 2008, bringing inventory to almost 187 million square feet. Last year’s net absorption was negative by 1.1 million square feet, compared with 2007 absorption of 479,000, according to Reis. Experts expect negative absorption to continue this year, as nearly 5.2 million square feet is scheduled to deliver. Much of that space has been pre-leased, but some retailers are delaying their openings until 2010 or later, and others may never realize that goal at all. Linens ’n Things, for example, had pre-leased big-box space in the 850,000-square-foot Canton Marketplace. When the retailer went out of business, rival Bed, Bath & Beyond Inc. stepped in to fill the space. Jeff Fuqua, president of the center’s developer, The Sembler Co., which has four power centers under construction, reported that the $200 million Canton Marketplace is slated to open this spring, anchored by Kohl’s, Target, Lowe’s, Best Buy and Dick’s Sporting Goods, as well as Bed, Bath & Beyond. “We haven’t had a lot of issues with our other anchor tenants,” Fuqua said. However, leasing for Canton Marketplace’s smaller blocks has proved much slower than Sembler had anticipated when it conceived of the project. Moreover, the company is inking tenants at lower rental rates than predicted. Most owners must labor just as diligently to keep their centers full. “We are working a lot harder to keep our tenants and replace tenants in our centers,” Darnall said. “Our Southeast region had a record year in 2008 for new deals and renewals, but it’s like filling a leaky bucket.” He doubts that much leasing activity will occur during the first quarter but hopes it will pick up during the year. Still, he is sure of one thing:“We’re going to have to work twice as hard this year to do the same number of deals we did in 2008.” Today, Atlanta’s retail market has a vacancy rate just shy of 12 percent, according to CB Richard Ellis Inc. By some accounts, the market’s vacancy rate is the highest it has been in more than 25 years. Experts anticipate the marketwide vacancy rate will climb for the next 12 to 18 months and settle at 14 percent for the next four 12 Commercial Property News • March 2009 • www.cpnonline.com http://www.defeasewithease.com http://www.defeasewithease.com http://www.cpnonline.com
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