Atlanta’s Retail Investment Landscape

Tim Milazzo
September 28, 2019

Next to multifamily, StackSource arranges more financing for Retail assets than any other real estate asset type, with many of those retail financing transactions coming in the greater Atlanta market. The capital landscape for retail continues to evolve as sales of many classes of goods shift online from physical shopping, and as real estate developers strive to achieve the “live, work, play” dynamic.

Our activity in the sector has allowed us to develop relationships with some really smart brokers in the space, and we often team up with them to get real estate investment clients the best results. One of those retail sales brokers is Chase Murphy, who provides investment sales services in Atlanta. Quality brokers like Chase will break down a market for an investor, and help them understand different assets available on the market (or off market) that fit well with their investment strategies. We asked Chase to set the stage on Atlanta’s retail investment scene.

Chase Murphy

How did you get into real estate?

I started my first role in the industry in April of 2013 as an asset manager, with major banks like Bank of America, Wells Fargo, Charles Schwab, and Deutsche Bank as my clients. I managed a portfolio of 200 to 300 special servicing and troubled real estate assets throughout the US. I was able to remove over $70,000,000 of distressed assets from those clients’ balance sheets.

Nearly five years ago, I had a few conversations with a friend of mine working in leasing brokerage for Skyline Seven, a brokerage and property management company here in Atlanta. Investment sales was intriguing to me, and I ultimately decided to make the switch and join Skyline Seven in 2015.

What was your first deal as an investment sales broker?

My first sale was a shopping center in Winder, GA that had about six or seven tenants. The client lived in the Northeast.

How much of your business today is comprised of selling retail?

Most of my deal flow to this day is retail. Clients in the Atlanta market know that’s our specialty, and we’re active members of prominent retail real estate organizations like ICSC and YARA.

Traditional retail continues to take a lot of heat in today’s economy. What types of retail are most at risk of online sales disruption?

I wouldn’t want to be overexposed to tenants that are not built around a service, don’t have a unique product, or are not adapting to the retail market with online sales. The tenants that seemed to be opening and expanding are service-oriented, for example: restaurants, gyms, nails salons, hair salons, grocery stores. Best Buy, Walmart and some grocery stores have done an excellent job evolving with the use of online and using their brick and mortar locations as a market advantage.

Tenants most at risk today would be your standard clothing stores that are not evolving with the marketplace. Ross and TJ Maxx are unique as not every store has the same merchandise, but we’ve seen stores like JCPenney, Macy’s, Shoe Depot, Cato, rue21 really fight against the shift online for far too long, and haven’t done enough to improve the in-store experience.

How has the retail sales market changed in the last few years?

As an investment class, the retail market here has actually become stronger over the past few years, especially right in the heart of Atlanta. I believe there are a few reasons for a stronger market which are lack of inventory on the market, interests rates going down, a lot of new investors from across the US looking to buy in Atlanta, and a global market attracting investors from all over the world. Recently our firm has done deals with clients who lives in Israel, China, and Russia.

What’s one common misconception you see in investors who don’t specialize in the retail sector?

The most common misconception from investors is thinking retail is going away. Retail is changing and evolving, but not going away.

In your opinion, what area of the Atlanta metro is most underrated as it relates to retail investment and development?

If you want to stay closer to the city, I believe Mableton is underrated as it relates to retail investment. I believe over the next 10 years Mableton will benefit tremendously from the growth in Smyrna as well as the revitalization of the Westside of Atlanta inside I-285. I think Mableton will experience growth especially as more residents in the metro Atlanta area continue to move back in for shorter commutes into the city.

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