Jesse Shannon

ATLANTA—Branch Properties is closing out the year with heavy deal flow. The Atlanta-based real estate investment firm just acquired two notable retail assets in an eight-day span.

Specifically, Branch snapped up City Walk in Sandy Springs, TN for $24.53 million,
nearly half of its 2007 sale price, in a special servicer-managed REO sale. Branch also acquired the shadow retail portion of Merchant’s Festival in East Cobb from Target Corporation for $13.17 million.

City Walk is a 168,100-square foot, Kroger-anchored shopping and dining destination located on Sandy Springs Drive between Hammond Drive and Sandy Springs Place. The retail center is 71% leased. Only 50% of the shop space is currently filled with a mix of soft goods, service providers and restaurants.

“City Walk aligned with our investment criteria,” Jesse Shannon, director of Acquisitions at Branch Properties, tells GlobeSt.com. “The center has a well performing anchor, strong demographics and significant barriers to enter the market. Pricing was below replacement cost—nearly half its 2007 sales price.  Furthermore, there is a significant opportunity to create value and improve returns through the leasing and redevelopment of the shop space, which was nearly 50% vacant at closing.”

At Merchant’s Festival, Branch purchased 53,600 square feet of small-shop space in three buildings at the Target-anchored shopping center at the intersection of Johnson Ferry and Roswell Roads (State Route 120) in Marietta, Ga. Target was not included in the deal but figured into the acquisition strategy.

“East Cobb is an attractive market because it is one of the most affluent communities in the Atlanta MSA,” Shannon says. “Merchants Festival is located at the dominant intersection in the heart of East Cobb. We passed on nearly two dozen other deals before making pursuing these two acquisition opportunities.”

Over the past 12 months, Branch has completed $90 million in retail acquisitions and $27 million in multi-family developments. The firm’s strategy is to invest in core-plus and value-add grocery-anchored shopping centers that benefit from strong anchor sales, strong demographics and superior locations, and can be redeveloped to enhance the value of the asset. Branch has $55 million of deals in its pipeline, and the firm is seeking additional investment opportunities.