Sunday, March 17, 2019

[BREAKING NEWS] Jamestown Has Reportedly Purchased The Shops Buckhead Atlanta

German-backed private equity firm Jamestown has reportedly closed on its purchase of The Shops Buckhead Atlanta according to multiple sources familiar with the transaction, but who spoke to ToNeTo Atlanta on the condition of anonymity given the transaction has not yet been made public.  The purchase, which reportedly closed last week, gives the beleaguered center its third overall owner.  Sources familiar with the transaction indicated the purchase price was between $175 million and $200 million.
The purchase of The Shops Buckhead Atlanta would be the fourth acquisition by Jamestown in metro Atlanta in the last fifteen months.  In early 2018, Jamestown purchased the Parkaire Landing, a Kroger anchored shopping center in East Cobb, for $42.1 million.  In November, Jamestown spent an undisclosed amount to acquire The Exchange at Hammond and Parkside Shops, both in Sandy Springs, from Atlanta based Mimms Enterprises.  The two contiguous centers feature nearly 335,000 square feet of retail space across 25 acres.   

Originally conceptualized as Buckhead Avenues, the Buckhead project was later (but long before it actually opened) re-branded as The Streets of Buckhead after a legal challenge from Cousins Properties and their assertion that the name might be confused with their "Avenue" retail developments.  The project stalled in 2009 amidst the global recession and was eventually sold partially built to San Diego-based developer OliverMcMillan who later renamed it Buckhead Atlanta and later the retail portion, The Shops Buckhead Atlanta.

Almost immediately, the project struggled to attract the traffic the developer, retailers and restaurateurs expected that it would.

The center focused nearly exclusively on high end, luxury brands, creating a "Rodeo Drive" of the south, as some called it.  While such a high concentration of premium offerings might thrive in Beverly Hills, New York or Chicago, among other cities, Buckhead Atlanta has failed to resonate with a large enough demographic of locals or visitors to be viable.
This past November, OliverMcMillan hired JLL to "broaden retail appeal" of The Shops Buckhead Atlanta.  "What we need at the project is to bring in a more diverse customer base and really bring in the community." said JLL Director of Retail Agency Leasing Coleman Morris to Bisnow.  “Right now, you don't have that kind of entertainment nightlife in Buckhead like you do maybe in Ponce [City Market] or West Midtown,” added Morris.  It's worth noting, of course, that it is entertainment and night life that the development replaced. 

When Jamestown purchased what was then City Hall East in 2011 for $27 million, it was essentially a blank canvas.  The firm, led by CEO Matt Bronfman, saw the former Sears warehouse, store and regional office as a unique opportunity to reshape a community.  The property, spanning sixteen acres and over 2 million square feet, is the largest brick structure in the southeast and inherently created high barriers to entry to any other development.  There's also that little thing called the BeltLine that brings literally tens of thousands of people to Ponce City Market's door.  

The Shops Buckhead Atlanta is completely different from Ponce City Market, as unlike it, The Shops is already built, merchandised and situated in ways that will make it difficult to change in any significant way.  “Buckhead Atlanta will be woven into the fabric of this world-class community,” said Morgan Dene Oliver at ICSC's RECon in 2011.  What he meant by that was that Buckhead Atlanta is literally a development within existing streets and is essentially "woven" into the community.

Buckhead Atlanta and its eight acres feature 300,000 square feet of retail and restaurants, plus another 100,000 square feet of class-A office space.  There is an office presence, there are residential units, and there are isolated success stories in the development's retail and restaurant roster.  Unlike Atlantic Station, however, which when North American Properties and later Hines purchased it, came with anchors like a 16 (now 18) screen Regal Cinemas, Dillard's and a Target store to build around, the closest thing The Shops has to anchors are Hermes and Le Bilboquet, both seen as the most successful in the development, but hardly the traffic drivers of a movie theater or mass market department store. 


The Shops lack a "high/low" mix, and while paid parking at Ponce City Market is a complaint of some, the logistics and cost of the parking at The Shops is a complaint of many, including patrons, would-be patrons and many retail and restaurant employees.

The development does have a couple of openings in the pipeline.  Le Colonial, a French Vietnamese eatery is to open in place of the failed Dolce restaurant, and co-working space  No. 18, is to open in previously unleased space, but neither is significant enough or mainstream enough to move the needle in any major way. 

ToNeTo Atlanta reported earlier this week that designer handbag consignment store Bella Bag recently closed in the development, replaced by a similar concept, while rumors persist of other likely closures of poor performing retailers.

ToNeTo Atlanta exclusively reported in January that luxury retailer Tom Ford was essentially dumping The Shops in favor of a new store at Phipps Plaza, a clear indication that the luxury retailer has faith in the Atlanta market, just not in The Shops Buckhead Atlanta.  This move is definitely a win for Phipps Plaza owner Simon Property Group, but seen differently, provides The Shops the opportunity to recapture a marquee space with Peachtree Road frontage to transform into something more appealing for the center's new owner and new direction. 
Former locations of both Jonathan Adler and Corso Coffee/The Mourning Dove also remain vacant in the project along Peachtree Road and while their visibility is high along the road, trips to them from within the project are likely not top of mind given their locations.  

Employees of The Shops retailers who spoke with ToNeTo Atlanta in preparation for this post lamented the lack of affordable lunch options and questioned whether a Starbucks or Subway or something similar might make sense in the former Corso space.  Other less likely ideas such as a Mattress Firm or a nail salon have also been suggested as things that would draw people in.  

Lenox Square and Phipps Plaza, which between them have five anchor department stores, three of which represent the store's only location in Atlanta, are well entrenched in the market and have proven to be the premier choice for retailers looking to open in Buckhead.  Both malls have a good mix of affordable, aspirational and luxury goods, a mix missing from The Shops Buckhead Atlanta.  The two malls, Lenox which opened in 1959, and Phipps which opened in 1969, are both established in the market in ways that The Shops Buckhead Atlanta likely never will be, and together generate just north of $1 billion in sales.  
Multiple sources indicate that select retailers at The Shops have gone days without a single customer, and weeks without a single sale, so Jamestown has their work cut out for them.  It will be interesting to see what, if any, significant changes are made to the project, but with Phipps adding a Nobu hotel and restaurant, Life Time Athletic, a food hall, and an office component, our money's on Phipps (and Lenox) continuing to be the primary choice(s) for shopping and dining in Buckhead.  

What could Jamestown do to make The Shops Buckhead Atlanta more appealing to more people?  What retailer/restaurant do you think will be the next to close in The Shops Buckhead Atlanta?  Do you think Jamestown made a good decision in purchasing the Shops Buckhead Atlanta?

7/18/2019 - Jamestown officially confirmed they have purchased The Shops Buckhead Atlanta.  A purchase price was not disclosed.  Jamestown will host a series of town hall meetings where members of the community are invited to join in discussions on the property and its place in Buckhead.  Jamestown will host the first town hall on Tuesday, July 23rd from 6:30pm to 7:30pm at The Shops Buckhead Atlanta, Suite B200. Participants can RSVP here.

Please share your thoughts below  

22 comments:

Anonymous said...

Bring Belk back into the city!

Anonymous said...

Funny that they want to bring in the community and also put barriers up on all of their streets, blockade their walkways, have extreme security presence, a very well enforced no photography policy, et cetera. It was made very clear that I was not welcome there about 90 seconds after I stepped on "property" (which they are clear to note - includes the roadways -), and I haven't been back.

Anonymous said...

Bahaaaa..... Subway! Good lord, bring in a Burger King too. Nothing says Rodeo Drive luxury like a Whooper.

Center is a boondoggle.

Anonymous said...

I’ve been there several times, only to visit one store, Warby Parker. I can never figure out the boundaries of this project, which streets are in and which streets are out of the streets of Buckhead. Or the shops of Buckhead. Here’s a great idea that I won’t charge them for. They should put an anchor department store in several floors of one of the towers… Perhaps a Dillards since they are not in Lenox or Phipps and the closest ones are either at perimeter or all the way downtown near IKEA. A Dillards and a small food hall. And perhaps a relocated crate and barrel. Crate and barrel moves every few years so it’s about time!

Tyler Ray said...

Any word on how the Dior boutique is doing at the center?

Anonymous said...

Buckhead Atlanta is beautiful! Wish it could be all indoors somehow. Shopping in 90 degree weather outside is rough.

Anonymous said...

Definitely ironic to me. I believe the opening of PCM made the O4W and surrounding in-town neighborhoods more desirable than Buckhead. I think it's the main reason of failure for this place.

Also, change the name! It has no identity as is.

Anonymous said...

I don't understand why all of you people are complaining about the parking at Buckhead Atlanta. There are a plethora of easy decks available! Always spaces to be found. What is it that you want to make it easier!?

Just the fact that Mattress Firm was mentioned in this article and then reading the ridiculous comments gives you an idea as to why BA is struggling. Clearly most Atlantans lack sophistication.

Anonymous said...

9:49 PM Are you a recluse or a criminal ? Bless your heart!

FatCoachK said...

The strange part of this development, to me, is they do have a captive audience in surrounding buildings, but have never made any effort to put in concepts that would attract those residents. The Eclipse, 325 Paces, Elle, Allure, Ovation, The Bryant, 92 West Paces and now this whole new wave of development like the Hanover are all walking distance and are largely 25-40 year old young professionals with expendable income. But instead they targeted a niche crowd from the St. Regis and otherwise.

Hopefully Jamestown can figure it out.

Anonymous said...

To achieve a high/low mix as well as something new to this market, they need to add a Barneys, a Century 21 and a Uniqlo to Buckhead Atlanta.

Anne Barksdale said...

To me it was doomed from the beginning. The shops and restaurants are way too upscale for most budgets. The whole center is too closed off, and it sticks out like a sore thumb! Jamestown will face an uphill battle.

Anonymous said...

If anyone can "save" Buckhead Atlanta, its Jamestown. They've got the money, retail contacts and a knack for aesthetics/design. If they add more cool, yet affordable retailers (UNIQLO) and restaurants (upscale fast-casual), and improve the parking and branding (i.e. the name of the center), Jamestown has a very good shot at making this a winner. Remember, the location already is a winner and that's half the battle.

Anonymous said...

How about a T.J. Maxx or Marshall’s? That would draw me in!

Anonymous said...

Buckhead has been severly impacted by the diversity plague, and that is why security cameras, heavy LEO presence, and other security measures are required. You can be naive, ignore the facts, and be the next vicitim.....or understand the problem and figure out ways to prevent further decline. Remember the glory days of Buckhead before year 2000 or so? It was safe and prosperous. day and night! What was different???

Anonymous said...

According to the business media BA should be booming:

https://www.businessinsider.com/luxury-fashion-booms-middle-class-dies-out-2019-1

Diverse, highly educated, well heeled Millennials? Yet they want endless free stuff via the dying middle class taxpayers.

Anonymous said...

Good restaurants and reasonable shopping will draw people in. Like Phipps, designer shops mixed with some chains would likely work (Black/White, Victoria Secret, maybe a small Apple store, for example). Pottery Barn or C&B would not hurt. The atmosphere is nice and upscale, just bring in places people tend to shop and you're all set.

Anonymous said...

I went into the Tom Ford store, a black three button shirt made of cotton was $1,400. enough said.

Anonymous said...

They need a couple of stores for younger people. Maybe a kids boutique, Forever 21, Gap/Gap kids, or Abercrombie and a smoothie/sandwich place. The restaurant has to draw in the staff that work there, the surrounding areas, as well as residents.

Anonymous said...

Just free parking like at the nearby malls would lure me in there. I'm not paying to shop.....ridiculous concept

Anonymous said...

" I'm not paying to shop.....ridiculous concept"

So you shoplift ?

Anonymous said...

I'm somewhat glad to hear that there are no sales for weeks in some of these stores - I always wondered how they could stay afloat.

Le Bilboquet is great, and some of the bars. There are so many apartments and condos going up right there that they will be fine.

The parking? Kind of a CF is you have never been there before. As someone else said you dont know what is part of the area and where to go.

Related Posts Plugin for WordPress, Blogger...