5Qs for NAP’s Tim Perry on community centers (and parking lots)
Last year Mark Toro, the longtime retail real estate developer who helped make Avalon in Alpharetta, Ga., a seminal retail center, announced he’d be leaving North American Properties to start his own development company. Stepping into his hard-to-fill shoes is Tim Perry, himself a long-tenured managing partner of the Cincinnati-based company who helped lead NAP’s purchase and renovation of Atlantic Station in Atlanta. We got a chance to speak with him recently to find out how the new job’s going
You spent the early part of your career financing big office projects. How’d you get into retail?
North American Properties started developing some Publix projects in the Eighties when one of the principals moved down to Florida. I came from mortgage banking and had financed some big projects in the South. I knew one of the principals there, Dale Hafele, who suggested we look into buying some properties down South. We wanted to get into multifamily and one we bought was Atlantic Station in Atlanta. There we cut our teeth in mixed-use experiential. All of a sudden we were 15 people running one asset.
Everyone’s reporting retail leasing’s on the rise. Some open-air developers tell me they’re getting requests for spaces that aren’t even built yet. Is that what you’re seeing?
In 2019, we looked at the world and saw the cost escalation and the rent de-escalation, which affected yields. Costs were going up. Retail inflation rates were lagging. Where are the curves with return? But Mark was way ahead of his time with his approach to retailers. Our ops team are experience-makers. We have events, hospitality, office workers. With retail, we focused on creating partnerships with our tenants by decreasing occupancy costs and creating a community center.
That’s definitely Avalon, which has become a standout community in Alpharetta. What about Atlantic Station, where you have retailers like Ikea and DSW in urban Atlanta?
Yes. The business plan is different. With Avalon, we wanted to create a special, high-touch environment, and we built it. At Atlantic Station, we didn’t lay a brick, but we created a program that drove value for our investors. We’ve been successful in that growth. So we are still looking at what we could acquire in the mixed-use sector and on what basis.
You’ve done a lot of thinking about one of the least talked about but important pieces of retail real estate, parking lots, haven’t you?
Parking is the first experience and the last experience of a trip to a center. We want to make that experience as easy and as valuable as it can be. At Avalon, we have valet services that will deliver all your purchases to your car or your hotel room. We own a property called Birkdale Village in North Carolina where there are more than 300 apartments and hotel rooms. We aim for density around the parking lots.
Should guests at retail centers pay for their parking or not?
Charging for parking is project-specific. At Avalon, we’d never charge. In Midtown Atlanta at Colony Square, you pay for parking there and everywhere else in the area. There are lots of ways to monetize parking, and it’s competitive. Look at the app SpotHero. If you don’t want to pay $22 to shop in downtown Atlanta and you’re willing to walk four blocks, SpotHero will get you a spot for $6.