by Sean Donahue
Optimism, a key, if not downright necessary trait of real estate developers, was the underlying theme of the day, from start to finish, at Day 3 of ULI’s Center for Leadership Class of 2014, which was hosted until early afternoon by McKenna Long & Aldridge in their spectacular 53rd floor suite. The events of the day ran the gamut from an overview of government monetary policy, to a down and dirty tour of the under construction Krog Street Market. As with most other CFL sessions, the subject matter for the day, Development and Capital Markets, was already well-understood by some of us, and not as well-known to others. So it was only appropriate that our morning included a discussion about the anatomy of mammals!
To ease us all into the capital markets portion of the day, Michael Hartman of Reznick Capital Markets Securities gave us a primer on the who, what, and how of commercial real estate equity investment. That is, who invests, what the various investment vehicles are, and how owners and developers attract investors. One of the most important takeaways from Michael’s presentation, and one that makes perfect sense, but is too often overlooked, is that having and executing a business plan is more important to the success of an investment than any sort of complex financial engineering or over-leveraging that one might attempt.
We were then joined by Chris Campbell, a CFL Class of 2013 alumnus who helps lead the debt placement practice in the Southeast for Eastdil Secured. Chris’ wide-ranging presentation highlighted both the positive—increasing global investment in U.S. commercial real estate—and the negative news—the declining U.S. labor participation rate—in the economy today. This discussion really made it clear how impactful the actions of the federal government are on our industry.
Next up was an interesting panel discussion about Avalon, the huge luxury mixed-use development in Alpharetta that we’ve all heard and read plenty about. John Kelley, who is leading the development for North American Properties, and Lamar Wakefield, the project’s architect, provided great insight into the many challenges their teams faced in acquiring, partially re-zoning, and financing the project. While the original project developer (albeit of a much different mix of uses) fell victim to a global economic collapse, the persistence and positive outlook of the current team seems to be winning the day thus far.
Our lunch break also brought the moment we’d all been waiting for—the chance to select our mTAP project. Okay, maybe it wasn’t quite that exciting, but the list of projects and clients we had to choose from was very intriguing, and it’s safe to say that we will all be thinking outside of the box as we work with our teams on these projects.
Jim Borders, CEO of Novare Group was next at the podium. While we’re all pretty familiar with Novare’s many Midtown and Buckhead projects, most of us had not heard Jim speak at such length. He took us back to his first real estate investment in Austell, GA, recounted several of the most important lessons he’s learned, and explained how those lessons have given rise to his current approach to developing. There are few, if any, better examples of an optimistic real estate developer in Atlanta today.
It was finally time for our behind the scenes look at Krog Street Market, so we all relocated to Inman Park where David Cochran, CEO of Paces Properties, gave us an overview and tour of the project, replete with teasers about newly-signed tenants whose identities could not be revealed. In the here-today-gone-tomorrow built environment of Atlanta, KSM is one of the most significant examples of adaptive reuse development we have. With its location and strong roster of restaurateurs and purveyors, it isn’t hard to see why Paces is so bullish on its success.
It was yet another educational and insightful day of the Center for Leadership. A big thanks goes to Paces Properties and CohnReznick for sponsoring the happy hour that ensued at Krog Bar. Finally, the day wouldn’t have been possible without the planning of Class of 2013 alumni Marc Brambrut, Kim Bucklew, and Brian Lu—thank you all!Sean Donahue is Vice President, Asset Management at Trimont Real Estate Advisors. He is a member of the Center for Leadership Class of 2014.