The court-appointed receiver for the CityWalk shopping center in Sandy Springs is cautious about its role in terms of leasing retail space, making value-added improvements or marketing the center for sale. But all of those items are on the agenda.
Colliers International has plastered for-lease signs on the windows of empty retail spaces throughout CityWalk, 230 Hammond Drive. They offer a visible testament to some of the commercial real estate firm’s activities.
“We have been appointed as the receiver to work in the best interest of all parties—the borrower, the lender and the tenants,” said Joseph R. Montgomery, senior vice president of Colliers International Atlanta. “What we have done initially is to simply assume the managerial, day-to-day operational landlord duties. I can tell you that the status of the loan is in default. The mortgage is in default and that is obviously why the lender petitioned the court to appoint a receiver.”
When merchants began moving into the new shops of CityWalk in the fall of 2005, they believed they were moving into the retail center of Sandy Springs. But, for the most part, CityWalk has been a disappointment to both merchants and city officials over the past several years — never meeting what was considered its potential. Almost half the stores are empty.
In 2007, CK City Walk Owner LLC of Tucker bought CityWalk from Maxwell Properties, the Sandy Springs company that developed the shopping center and adjacent townhomes. The principal of CK CityWalk is Ming Chu, who did not return phone calls seeking comment.
Montgomery, in a recent interview, said it is “too early to discuss the possibility” of whether or not the center might again be put up for sale.
He said the receivership will allow the owner and lender to work through the financial issues and decide whether the center will be foreclosed on, or a financial plan can be worked out.
In the meantime, however, Colliers International, which has its Atlanta headquarters at 5871 Glenridge Drive in Sandy Springs, has the responsibility of managing the property and also leasing space in the center and reporting back through the court to both the owner and lender as to what actions are being taken.
“At this point in time, we are here to provide the best stewardship of the asset that the circumstances permit. To the extent that we are empowered to lease vacant space and to make improvements within pretty narrow financial feasibility channels you could infer that some value enhancement might flow from that work,” he said.
As a court-appointed receiver, Montgomery said, “we will have an opportunity to give a little more color on what steps we might be in a position to take to improve the occupancy, the tenancy and the appearance of the property.”
CityWalk merchants have raised a number of complaints about the mall over the years. Some have said the dark store windows inhibit shoppers. Others complain that shoppers have to walk across a wide parking lot to get from one building to another. Still others say a lack of street signage for shops and lack of directional signage within the center have made it difficult to find particular merchants.
“I can say that we are actively studying a number of the shortcomings that you have mentioned and are going to address as many of them as we can feasibly address,” Montgomery said. “I think we bring the benefit of ongoing experiences with other properties that gives us the ability to foster a better dynamic than a landlord and tenant-owner.”
Julie Routenberg, who owns Potpourri and has stayed on through changes in ownership and management and battles over signage and marketing responsibilities. She said Colliers has “a whole group of people working on this project. I am pleased so far.”
However, two retailers who had been at CityWalk from the beginning recently have decided to move out. Belles Choses has moved to another shopping center on Sandy Springs Circle. Kai the Medical Spa is planning to move in February.
Sandy Springs Mayor Eva Galambos, who has tried to work with the merchants to improve signage and other elements, happily greeted the news that CityWalk had gone into receivership.
“Maybe there will be new owners who will turn the center around so that it can meet its potential,” she said.
Montgomery said Colliers leases and manages probably 75 shopping centers around the metropolitan Atlanta area.
“I would say here in the heart of Sandy Springs, it is generally a pretty healthy market when we look at the other properties,” said Montgomery, who has been with this company for 16 years and working professionally in Sandy Springs for over 20 years.
“I would say that Sandy Springs, as compared to the balance of Atlanta, enjoys a higher occupancy percentage and a lower vacancy than a lot of other places.”
He said Sandy Springs “obviously has been one of the longest established bedroom community submarkets of Atlanta.”
“Retail properties are truly unique, unlike other commercial properties, because the success of the business, which is retail selling of goods and services on sight at the location, many times can be a function of the shopping center itself,” he said.
“All of the particulars that make up a shopping center property differentiate one from another. The landlord-tenant relationship in retail is a particularly intimate relationship. In the world of retailing, the vibrancy and the traffic and the other tenants that make up the tenant mix can have tremendous impact on the fortunes of the retail tenant in the shopping center.”