Atlanta — The Sembler Company is now focusing on developing power centers and value-add acquisitions.
Atlanta — Charlie Heard has been named vice president of development and Southeast market leader for The Sembler Co., based in the firm’s Atlanta office. His duties include pursuing new shopping center development opportunities in Georgia, South Carolina, North Carolina, Tennessee and Virginia. The company, which recently celebrated its 50th anniversary, has leased/managed 12.5 million square feet and developed 27 million square feet since its inception.
Shopping Center Business recently sat down with Heard, as well as Sembler’s Chief Executive Officer Ronald Wheeler, to learn more about the company’s new mission to develop power centers instead of building mixed-use projects. Questions also focused on how The Sembler Co.’s newest hire will help achieve this goal.
SCB: Why is this a good time to go back to your roots and further develop that portion of your portfolio?
Wheeler: Right now in this market, it’s not the time to do the bigger, more complicated deals with more of the lifestyle tenants that carry a greater risk level. I’m not saying we’ll never do any deals like that again, but at this point taking more of a necessity-based retail model seems to be the best plan for us.
Heard: The lack of credit right now hinders doing the bigger projects, too. As Ron said, you have a lot of small shop space and the [borrowers] that are in the business are having a tough time getting loans and expanding. If someone wants to start a new business, it’s tough getting the credit. That’s a hindrance too in doing the larger centers with the small shops.
SCB: Charlie, what is your background and how does it play into your strategy?
Heard: Most of what I’ve done has been the food-anchored centers — the Publix and Kroger stores. It goes without saying everybody has to buy groceries. The grocery business will be less impacted by the Internet as some other tenants who would be in power centers. It’s just a little bit safer of a deal. You buy into the right locations in the nice neighborhoods. If you maintain them well and keep leasing up, they’re good assets to have.
Wheeler: We’ve had very successful mixed-use projects, but to take the types of risks we were taking and keep up on deals with large amounts of speculative space is just not the thing to do right now. That’s the main reason we brought Charlie on because his experience is primarily in grocery-anchored centers and power centers.
SCB: The Sembler Co. is no longer just focusing on development. What acquisition plans do you have on the horizon?
Wheeler: We like to buy centers to which we can add value. So, if it’s a nice stable center that’s 100 percent leased, has a good anchor tenant and is in a good neighborhood, you can’t really add a lot of value to that and get the returns. We like to buy centers where we can create some value, either through leasing or redevelopment. So, that’s really it — value-add and redevelopment opportunities.
Heard: Almost 90 percent of the population growth in America from 2000 to 2010 occurred in the suburbs, and that will continue. Most of the growth follows infrastructure and good schools. Unfortunately, the suburbs typically have the better schools. Most people want to live out in the suburbs. You are seeing these suburban nodes that get developed. The offices are actually in a lot of ways moving out to where the people and the workers are. I see that trend continuing. There will be more residential development in Atlanta, inside the city at Midtown, but it will be small compared to the population growth that will occur outside Atlanta. I see that same case in Charlotte and other major Southeastern cities as well. That bodes well for us moving forward.