Buckhead has been touted as the Southeast’s most prestigious shopping area for decades, attracting both locals and tourists looking to tackle their shopping lists. Throughout years, the area has changed to meet the needs of those shoppers and right now the area’s retail marketplace is going through a renaissance.
“Buckhead is a destination for shopping throughout the Southeast. That is why it is important to keep reinventing ourselves,” said Ray Uttenhove, executive vice president of SRS Real Estate Partners-Southeast LLC.
She adds the retail market is strong and it can be difficult for retailers to find space where they can put down long-term roots. “There is a fair amount of space with short-term leases, but because everyone is thinking about the underlying land value and redevelopment opportunities, the long-term leases aren’t there. An important characteristic of the Buckhead market going forward is very dense, urban, mixed-use kinds of development. That is the way everything is trending.
Uttenhove said vertical development with retail on the ground level with other uses above will continue to be the trend for years to come.
“No one can afford single-level retail with land values having moved as dramatically as they have,” she said, adding that rental rates are on an upward trajectory and vacancies are low.
“I think going forward we are going to see more interesting development. The addition, renovations and merchandising of a hotel at Phipps [Plaza] is a great example of the trend. It is all exciting. It means Atlanta is becoming a more urban city. That takes adjustment for retailers who are used to customers being able to pull right up front but it makes us more like other bigger cities, opens up new opportunities and makes us more competitive,” she said.
A new hotel at Phipps is just one element of the transformation happening at the Simon Property Group LPowned, premier upscale shopping destination, said Dewayne Herbert, mall manager.
Simon and Noble Investment Group will bring the AC Hotels by Marriott brand to Phipps by the spring of 2016. Located at the intersection of Peachtree and Wieuca roads and adjacent to Nordstrom at Phipps, the AC by Marriott Buckhead will be the brand’s first hotel in Atlanta.
In addition to the hotel, residential project, Domain at Phipps Plaza, will be developed with Columbus Realty Partners Ltd. and consist of 319 mid-rise, urban-style luxury residences.
These residences will expand the shopping center’s ability to deliver a lifestyle embellished with luxury and quality and creates an exciting new place for Atlantans to call home, Herbert said.
“This will offer all the bells and whistles of a luxury living experience within walking distance to the mall,” he said, adding the first phase will open in the spring of next year. “These two components help us create a more urban footprint. To have residents and visitors on property 24 hours a day creates good synergy as they utilize all that Phipps, and even Lenox, have to offer.”
Other mall enhancements are nearly complete at Phipps Plaza. An extensive interior makeover provides a fresh new look and feel and meets changing customer needs. Upgraded energy-efficient lighting includes the conversion to LED and the addition of 500 new fixtures while reducing the mall’s energy load by 35 percent.
Also by the end of the year, construction will be complete on the striking new entrance and distinctive luxury façade on Peachtree Road at Phipps Plaza. According to Herbert, the entrance will offer a new multi-branded store front. Rental rates continue to be strong and both Lenox and Phipps are mostly fully leased.
“Demand from our luxury brands is strong at both Lenox and Phipps so we have continued to enhance both malls,” Herbert said. “We mean a lot to the community and we appreciate that. That is why we are putting so much into both properties. We know if we do what we do well and continue to improve these assets, the area will be really strong. The timing was right, market demand was strong and a big part of our focus is continually improving shopper experience.”
Chris Routledge, vice president and principal of retail services at Colliers International Atlanta, said rental rates are on the rise and vacancies are low in Buckhead. “A lot of Buckhead in general is being repositioned with renovations or new development,” he said. “It is getting harder and harder to find decent retail in Buckhead that you can lease for under $40 a foot. Everything seems to be in the $40 to $60 range.”
The Phipps renovation, coupled with the new hotel and the success of Lenox, has really told a story for those malls and that immediate trade area, he said.
“By putting drivers on the exterior like restaurants they are driving up interior sales as well,” he said, adding Phipps plans to target four new restaurants on the exterior and those new establishments will likely be high end, white tablecloth, chef-driven concepts. “The one thing I would hope they would keep in mind as this happens is there is not a lot of affordable restaurant options in Buckhead. There is a need for sophisticated dining experiences that are still affordable.”
CLOSER LOOK
Phipps Plaza renovations and expansion includes:
▪ Mall renovation: new interior colors with warm wood accents and updated railings, comfortable lounging areas with Wi-Fi connectivity and device chargers, upgraded restrooms and the installation of a hotel-like concierge customer service center. Parking areas improvements include new lighting, flooring and automatic doors.
▪ A new façade that will feature many of the mall’s upscale brands will be in place by the end of the year creating a dramatic gateway for the consumers.
▪ The new AC by Marriott Buckhead will feature 166 rooms and suites and a variety of amenities including the AC Lounge, 2,500 square feet of flexible meeting space, the AC Library, health and fitness, an indoor pool and complimentary wireless Internet throughout the hotel.
▪ New residential component, Domain at Phipps Plaza, will include 319 mid-rise, urban-style luxury residences with a variety of floor plans – from studios to two bedroom apartments – and exclusive amenities including a yoga court, outdoor pool, health club with fitness on demand, dog park with dog wash stations and rooftop terrace with a resident lounge.