McClinton Commercial Real Estate relies on brokerage, investment fees
By David Zaslawsky
Photography by Robert Fouts
There is a prominent sign across from the Publix-anchored Dalraida Commons shopping center with the words: “Retail Development Coming Soon.
You also can’t miss the company’s name: McClinton Commercial Real Estate and its logo – a dog, the president and CEO’s Labrador called Remington. The name McClinton has been synonymous with developing shopping centers such as Festival Plaza and Walmart-anchored sites at Midtown Plaza in Montgomery; Premiere Place in Prattville and Hillcrest Shopping Center in Millbrook.
The 22,000-square-foot Perry Hill Crossing shopping center is being developed by McClinton Commercial Real Estate, which was formed in December 2014 and is operated by David McClinton. Zaxby’s and Burger King will have sites at outparcels along with Mapco, a gas station/convenience store. That will be Zaxby’s fifth location in Montgomery and eighth in the River Region. Mapco will have its third location in Montgomery.
In addition to the outparcels, there will be eight restaurants/retailers on the site that was the former location of Head Elementary School on Atlanta Highway, including three restaurants that are new to Montgomery and were announced at a late July groundbreaking: Shane’s Rib Shack; SOL – Restaurante Mexicano & Taqueria and The Wharf Express, which does have a location in Prattville.
The outparcel businesses should open in the late fall and construction of the shops is expected to be completed by the end of 2015. McClinton expects spring openings.
Once the Montgomery Public Schools district decided to close the school, McClinton knew the location was just too good to pass up. He had the property under contract for years and then needed a zoning change. “There are a lot of good commercial components there that made it a natural fit for another commercial project,” he said, referring to the nearby Publix, Winn-Dixie, Walgreens, CVS and a Wells Fargo branch. Downtown is just a couple of miles away. “We were able to secure a site that is in the middle of everything.”
What gets him really excited is the traffic count of 40,000-plus vehicles a day. There are 12,150 people living within one mile of the shopping center, according to McClinton’s website; 81,138 living within three miles and 161,231 people living within five miles of the Perry Hill Crossing shopping center.
It may not be terribly surprising that leasing interest has been off the charts. Shortly after he started marketing the available sites, he had “six letters of intent that are either signed or in some stage of negotiation.”
He expects to see more infill type of projects on Atlanta Highway; on Perry Hill Road; and downtown Montgomery. “There’s a lot happening downtown,” McClinton said. “You can’t ride through downtown right now and tell me there’s no opportunities. There are other pockets of Montgomery that are the same way. This was an opportunity on Atlanta Highway only because once you tore the school down – it was the only available 12-acre site anywhere nearby.”
Although he is developing the Perry Hill Crossing project, McClinton Commercial Real
Estate is not primarily a shopping center developer as was McClinton & Co., which is now actually a client of the commercial real estate firm. He is paid a fee by McClinton & Co. rather than a salary.
“I can’t help, but spot an opportunity,” McClinton said. “What I’m looking to build this business on is the brokerage side, which is helping anybody who needs assistance selling their property.” He also represents buyers.
He described McClinton Commercial Real Estate as first a brokerage; and second as an investment-oriented firm; and lastly as a development firm. He works with high-net worth people or companies looking to invest in commercial real estate projects. As an investment consultant, he can show potential clients projects across the country. Deals can range from a single tenant to a 20-year income stream from a lease to owning the land and structure and being the landlord.
He gave an example of investing in a 20-year lease with Walmart – a fairly safe investment. “It’s not going to pay a 10 percent return because it’s not indicative of a 10 percent risk,” McClinton said. “It’s going to play a lower return, however, you can pretty much bank on it …”
He is working to grow the brokerage client list. “You’ve got to get your name out there,” McClinton said. “You have to educate people that we’re no longer McClinton & Co, who’s developing shopping centers as the primary vehicle of the business model.”
The reason for the business model change was the Great Recession and its impact on the commercial real estate market, which dried up for six or seven years. With the brokerage and investment vehicles, “you’ve got a much steadier stream of fee income that’s built into your business model,” he said. I think from where we just came from – it’s a smart thing to do.”0
Walmart will boost Festival Plaza
By David Zaslawsky
Photography by Robert Fouts
When the president and CEO of McClinton Commercial Real Estates talks about a Walmart Neighborhood Market coming to the Festival Plaza shopping center in East Montgomery, he sees a stronger shopping center.
“It will add a consistent daytime anchor,” McClinton said about Walmart coming to Festival Plaza. “What we’ve always had in that project was a great nighttime entertainment weekend kind of project, but what we’ve always missed with that project is a good daytime anchor and a good daytime draw. That daytime draw will help our other shop users immensely.”The Walmart Neighborhood Market is the giant retailer’s version of a grocery store – a 40,000-plus square foot building vs. a Walmart Supercenter that ranges from 180,000 square feet to 200,000 square feet. McClinton calls it ‘Wal-Mart’s grocery store brand.” He said the concept is designed on the company’s “growing prowess in the grocery business.”What he doesn’t see is Walmart adding to the traffic congestion at the intersection of Taylor and Vaughn roads. David McClinton said the traffic counts won’t change, but some people may decide to go to Walmart instead of Winn-Dixie or Publix.
There is also a Walmart Neighborhood Market being built on Federal Drive in which McClinton acted as a broker representing the owner of the former Bonnie Crest Country Club location. The developer on that project is Dallas, Texas-based Cypress Equities. McClinton said he was asked by the developer to lease space to two to three restaurants and eight to 12 shops. “That area has not seen any new development in a number of years,” McClinton said. “I think what’s planned for the site will be good.”The Walmart is being built on a 6.5-acre site adjacent to Festival Plaza on Vaughn Road.Customers who go to Walmart will likely visit other tenants at Festival Plaza, McClinton said. “That’s really the whole point of merchandizing and leasing. We’ve been looking for that type of user for a long time so we’re very excited about that and for what it will do long term for the leasing at Festival Plaza and the overall vibrancy and strength of the center going forward.”
Depending on how well the Walmart Neighborhood Markets perform there could be up to four more in the River Region, according to McClinton. “I think they’ll take a look at the market and see how it’s absorbed; see how they’re competing. They will take some temperature guides on things and then they will act accordingly.”
The business model for the Walmart Neighborhood Market is being located at least two miles away from a supercenter and “providing a service to a nearby residential area,” McClinton said. The stores typically have 65 employees.