Published on May 5th, 2016 |1
Pollack Shores shelves Pharr Road apartment/retail development plans
As it turned out, he likely was referring to one of the projects his firm has been involved with, Pollack Shores Real Estate Group’s planned mixed-use apartment/retail development on several tracts at the southeast corner of Pharr Road and North Fulton Drive. It now is being shelved.
According to the Atlanta Business Chronicle, multifamily developer Pollack Shores Real Estate Group is “shelving plans for the more than 300-unit apartment project in Buckhead, citing concerns of overbuilding in some Intown neighborhoods.”
It is not too surprising that Pollack Shores won’t proceed with this development on Pharr, where several projects are already underway or plan to start later this year.
Hanover Co. is well into building a massive apartment complex a couple of blocks east at Old Decatur Road and Trammell Crow Residential has begun demolition of an aging commercial shopping area at 375 Pharr Road to build Alexan Pharr Road, a 244-unit apartment project on the south side of Pharr between Grandview Avenue and Lookout Place.
The 276,000-square-foot redevelopment will wrap around a .64-acre tract on Pharr Road at Lookout Place that is home to the four-story, 30-unit Barcelona Condominiums. The Trammell Crow site has been a commercial shopping area.
The Trammell Crow apartment/retail project is literally one block away from where Pollack Shores had planned to construct its apartment/retail multi-use development.
Oddly, Preston made his comment to BuckheadView when he was involved in presenting plans for another planned apartment/retail multi-use project in Buckhead, but this one was for the West Village area of Buckhead, not for Pharr Road.
Pollack Shores made the decision to postpone its project on Pharr Road most certainly because more lenders are tightening construction financing for new apartments, the ABC reported in its article. “Pollack Shores believes occupancy will fall to 83 percent in Buckhead and Brookhaven combined over the next two years, unless apartment owners offer rent concessions,” the ABC wrote.
“They are not going to let units sit empty,” Pollack Shores CEO Mark Pollack told the ABC. Buckhead is not overdeveloped yet, Pollack told the ABC, but added, “It’s on it’s way. And, Midtown is right behind it. There’s going to be a bubble,” he said.
According to the Business Chronicle, “The amount of units under construction in Buckhead and Midtown is closely watched. In Buckhead, construction started on 4,153 units during 2014 and 2015, according to The Reid Report, which tracks apartment development across metro Atlanta. Midtown saw 7,672 apartment starts over the same period.”
The Business Chronicle reported that a recent report on the Intown apartment market from the analyst Haddow & Co. said, “Rent growth is moderating, leasing velocity is slowing, and concessions are becoming more widespread.”
The Business Chronicle also reported, “Another challenge facing apartment developers seeking financing for proposed projects: construction costs continue to soar, especially for labor.”
The ABC quoted Pollack as saying that since the Intown apartment boom started roughly five years ago, all-in costs, or those that include the price of buying development sites, have risen $40 to $50 per foot for mid-rise projects.
To read the Business Chronicle’s full story, click here.