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EXURBS VS. SUBURBS

Closer in and farther out. That may be where waves of retiring baby boomers and white-collar workers settle in the South’s metro markets.

The result could well be strong demand for two very different retail property types: urbanist mixed-use centers and conventional exurban strips.

The need to commute — or not, as the case may be — will be a key factor in where each group decides to live, says Bernard J. Haddigan, a senior vice president and managing director in the Atlanta office of Marcus & Millichap.

On the one hand, worsening gridlock in such cities as Atlanta is creating demand among commuters and local governments for mixed-use properties near town. Commuters want to be closer to work, and permit-process bodies are striving to reduce trip times and shrink trade areas to get cars off the road, notes Jeffrey S. Fuqua, president of development at the St. Petersburg, Fla.-based Sembler Co., which specializes in the mixed-use format.

The residential component at Sembler’s Perimeter Place, just outside downtown Atlanta, for example, has already sold out, even though the 1 million-square-foot development is still under construction. “This is a 27-story high-rise exactly 60 feet from Target,” Fuqua said. “They’ve already stopped selling, and the penthouses are $1.5 million.”

Even in some secondary markets, communities may turn to the mixed-use format in an attempt to mitigate sprawl. Crosland, a Charlotte, N.C.-based development firm, won several smart-growth awards for its Birkdale Village, a 52-acre project in Huntersville, N.C., that combines some 285,000 square feet of shops and offices with 320 apartments.

On the other hand, retirees who no longer need to worry about commute times may well be drawn into the sprawling exurbs, where spacious and relatively affordable homes in luxurious golf course communities may prove too tempting to resist.

“All these areas, including Florida and the Carolinas, are going to see suburban and outlying sprawl,” Haddigan said. “No matter what, certain people are going to want to live with some land around them and relax, but with that you’ll see the value of land and property in the urban core explode.”

That is yet another reason developers such as Sembler are spending millions on well-located real estate in town.

— JG