The vacancy-ridden and tired Roswell Plaza shopping center, built in the 1960s, was past its prime but strategically located in the heart of historic downtown Roswell, Georgia, a suburb north of Atlanta. For Armada Hoffler Properties (NYSE: AHH), the site presented an ideal opportunity to create value with a vibrant mixed-use development that blends old and new and revitalizes its surrounding community.
Once a booming strip center, urban sprawl forced retailers at Roswell Plaza to close and chase homeowners further out. It became primarily a discount center and one that needed a major facelift.
The city of Roswell recognized the immense potential for the underutilized site, located just two blocks from the popular, bustling Canton Street lined with boutiques, restaurants, and sidewalk cafes. However, the flailing Roswell Plaza had yet to figure out how to mesh with downtown’s growing vibe and culture.
Around 2015, Roswell Plaza’s owner began negotiations for a 20-year lease with a major discount store—not what the city wanted for this pivotal site.
“Once the retailer controlled the shopping center, that’s pretty much what it was going to be from here on out,” says Steve Stroud, executive director of economic development organization Roswell Inc.
Time was of the essence, and in response the city partnered with the Roswell Downtown Development Authority (DDA), acquired the center in 2016, and began vetting developers’ ideas to reimagine the site.
“This was the first time the city purchased a piece of property for redevelopment. That was a big deal,” Stroud notes. “The city had been in the position to mostly react, and this was an opportunity to go on the defensive to prevent a long-term detriment in favor of a downtown redevelopment.”
The city’s goal for the 4.27-acre parcel was to increase walkability and connectivity and become Roswell’s go-to destination to live, work, and play.
Spring 2024 Opening
In 2019, the city chose Virginia Beach, Virginia-based Armada Hoffler and Atlanta-based S.J. Collins Enterprises, selling them the site for $5 million. S.J. Collins left the project in 2021, selling the remaining interest to Armada Hoffler, a REIT that invests in mixed-used properties primarily in the Mid-Atlantic and Southeastern United States.
The project is known as Southern Post, a $126 million amenity-filled, mixed-use development with 90,000 square feet of loft-style offices, 40,000 square feet of retail space, 128 luxury apartments and 10 townhomes, a sky lounge, a parking deck, green spaces, and gathering and common area plaza space.
“What brings us excitement is creating value,” says Shawn Tibbetts, Armada Hoffler’s president and COO. “We were able to take a site and re-engineer it to be what will now become one of the access points within the Roswell market, and we are thrilled with the outcome.”
Armada Hoffler broke ground in March 2020. Then the pandemic hit, stalling construction.
“COVID dampened our plans,” Tibbetts says. “We applied the brakes because we wanted to make sure we were conserving our capital. No one knew when the next shoe would drop. When we had the opportunity to restart the engine in early 2022, we took it and ran, and we'll be delivering in a matter of weeks.” The project is expected to open in spring 2024.
Robust Leasing
Armada Hoffler has a strong track record of delivering vibrant, mixed-use communities that mesh work, lifestyle, and convenience—and tenants have taken notice.
Atlanta-based Vestis, a large provider of workplace uniforms and supplies, inked a 45,000-square-foot lease at Southern Post, while commercial interior construction firm CA South leased 7,400 square feet for a new headquarters. This is the first Class-A office space in the downtown Roswell area, Stroud says.
Southern Post’s office space is now 55% preleased. “From an office tenant standpoint, companies like to be in a place where there are amenities for their workers, including restaurants and shopping and where their employees can live in the adjacent apartments,” Tibbetts explains. “This really is a unique ecosystem.”
Companies want to be in pedestrian-friendly, amenity-rich environments, Stroud points out. “Armada Hoffler knows better than anybody that this is what employers are looking for and the employees they want to hire are demanding,” he adds.
Southern Post’s retail space is around 80% preleased, boasting tenants like Amorino Italian gelato cafe, Azotea Cantina, Belux Coffee Roasters, Cavina Med Spa, Da Vinci’s Donuts, Grana, Bey Bistro, Sweathouz, and Watch Your Wrist.
Meanwhile, Southern Post’s multifamily component, dubbed Chandler Residences, recently launched preleasing with a significant waiting list of prospective residents.
As to why Armada Hoffler was ultimately selected for the project, “they brought the right vision,” Stroud says. “This is really a signature project and is becoming a place of destination. It is an extension to create more of a downtown area, and we see it as a catalyst.”
City officials say the Roswell Plaza’s previous declining condition was holding back investment in the area. With its walkability and live/work/play environment, Tibbetts says, Southern Post will generate new energy, fuel sales for existing business and restaurants, boost nearby property values, and spur further investment.
Community Input Key
Community engagement was essential for Armada Hoffler, so before designing any plans, the REIT met with neighbors and store owners, spoke with city leaders, and talked to community activists about what they wanted to see as the future of the historical, cultural site. The site was heavily reviewed from an architectural standpoint as it’s located within the Roswell Historic District.
“In all our projects, we want to be an accepted part of the community,” Tibbetts says. “For us, it's very important to keep the dialogue open, and ensure all stakeholders, including the residents and the city, are in lockstep with us as we proceed.”
Southern Post’s design is meant to honor Roswell’s historical charm, yet has a contemporary style.
“Our team worked to achieve a mix of elements that gave a nod to the historic side, while also incorporating a new, modernized look,” Jennifer Harris, Armada Hoffler’s senior vice president of development, says.
“The historic pieces include gas lanterns, zero vinyl windows throughout, brick, and metal pitched roofing,” Harris continues. “The new and modern flair was brought in from the metal panels on the siding in some areas. Additionally, the massive windows and the exterior stairs give the old mill look.”
Even the project’s name pays homage to Roswell’s rich history. It comes from a combination of the popular country breakfast joint Southern Skillet that was once housed in Roswell Plaza, and the desire for the redevelopment to become a “post” or central meeting spot for the city.
As for sustainability measures, the Chandler Residences component will achieve National Green Building Standard, Harris notes. Additionally, sustainable elements used include EV charging stations, LED lighting throughout, and open space.
Why Invest in Roswell?
Roswell is a sought-after suburb, has consistently been named a “best place to live,” and is recognized for its historic charm, Tibbetts says. Armada Hoffler is a long-term owner and looks for the highest-quality investment opportunities in a market. “For us, this is a diamond. It’s exactly what we shoot for,” he says.
Tibbetts says that what drove Armada Hoffler to Roswell were the strong market fundamentals, including household income, which is reflective of the fundamentals of Atlanta. “We were able to capitalize on an opportunity to create a mixed-use platform, or what we call a mixed-use ecosystem, and be the trophy asset in this market. We like to develop the trophy location in a market, and obviously, it's very difficult to do in Atlanta. But in a city like Roswell, that’s a smaller, tertiary market but has similar economic fundamentals—that's where we like to play.”
Harris notes that Roswell's strong sense of community and emphasis on quality of life align with Armada Hoffler’s commitment to creating spaces that foster connectivity.
“The mixed-use property, with proximity to Canton Street, aims to enhance the local community by offering a variety of retail options, loft-style offices, and apartments,” she says. “There is a growing population moving outside of the city, and employers and retailers alike are following. Armada Hoffler saw that we could be the catalyst for the Roswell area. We also saw an amazing opportunity to develop high-end apartments in a high barrier-to-entry area.”
Mixed-use is REIT’s Niche
“It's in our DNA to produce these mixed-use projects,” Tibbetts says, pointing to Armada Hoffler’s non-traditional REIT model. The vertically integrated REIT spans several asset classes and operates a sizable third-party construction arm.
“Not all real estate companies are comfortable with a multi-property portfolio,” he points out. “But it's part of our secret sauce that we're able to put the components together in a way that works well, not only for the tenants but for the investors.”
Tibbetts adds that the benefit of the mixed-use ecosystem is that when there’s a challenge in the commercial real estate market, “we're able to better withstand that challenge and better compete because we have an ecosystem that works together.”