New Wal-Mart Thrust Will Add 3M SF to Metro Portfolio

Study shows region can support building in two directions

By Alex Finkelstein
GlobeSt.com
September 1, 2004

ATLANTA-Aware that several Georgia cities already are banning new big-box developments, Wal-Mart Stores Inc. plans to redevelop retail sites abandoned by other developers and tap a new market in the city's urban pockets, instead of concentrating on constructing superstores in rural areas, local retail brokers and consultants familiar with the Bentonville, AR-based company's growth plans tell GlobeSt.com.

The three urban stores are each in the 225,000-sf range. One is planned in Chamblee, DeKalb County, where Wal-Mart is reconfiguring a former BellSouth Building site. In Avondale Estates, also in DeKalb County, Wal-Mart wants the city to annex and rezone the 23-acre site for a new retail center. And at the 17-acre site of the former CastlegateHotel at Interstate 75 and Howell Mill Road, the retailer is working with local developers Selig Enterprises and AG Spanos Cos., and the Northwest Community Alliance to create a two-level retail-apartment complex.

Wal-Mart has 33 existing stores totaling an estimated 4.8 million sf in the 10-county metro confines. The three new urban projects will add an estimated 675,000 sf of new space, brokers who have been following Wal-Mart's track record tell GlobeSt.com.

Twelve other new stores either planned or under construction will total 2.7 million sf. When all the stores are operating, Wal-Mart will have an estimated aggregate metro Atlanta portfolio of eight million sf. Wal-Mart's superstores average 225,000 to 240,000 sf. The smaller stores average 150,000 sf. By comparison, most of the larger Publix, Kroger, Albertson's and Winn-Dixie stores average 50,000 sf, according to area brokers who monitor retail store sizes for their companies.

"Nobody is even close to Wal-Mart when it comes to occupying space," says a Downtown retail broker who has worked on several Wal-Mart selection sites. Meanwhile, neighboring cities such as Roswell, Peachtree City and College Park, have put out the message to national big-box retail developers: Not in our backyard. They are banning big-box developments for an indefinite period.

Developing in urban centers will alter Wal-Mart's cookie-cutter style of rural store construction which used acres of surface parking, consultants say. Parking decks instead of 15 acres of surface parking will be designed, with some of the parking under the store.

Welcoming Wal-Mart to their boundaries could also generate new revenue to city coffers, brokers point out. For example, in Avondale Estates where Wal-Mart plans to redevelop the vacant Avondale Mall, brokers tell GlobeSt.com the retailer would pay the city annual estimated real estate taxes totaling $185,000; personal property taxes of $162,000; state sales taxes of $1.9 million; and local sales taxes of $2.1 million.