The Illinois REIT paid Tallahassee-based Branch Capital Partners $114 per sf for the 18-tenant center anchored by Publix, Eckerd Drugs and Bonefish Grill. Jim Michalak, senior director at Cushman & Wakefield of Florida Inc., negotiated for the seller.

"Retail financial investment remains extremely strong, with high demand and limited supply of desirable retail product," Michalak tells GlobeSt.com. He expects the retail investment market to "remain strong through the end of the year."

The broker projects retail cap rates will increase by 50 to 75 basis points for 'necessity centers', such as grocery-anchored properties, within nine to 12 months.

He tells GlobeSt.com the primary reasons are "the negative impact on sales volumes for traditional grocers such as Winn-Dixie, Kash N' Karry, Albertsons and Publix, to a lesser degree, and high-end specialty grocers such as Whole Foods and Fresh Market, will continue to erode due to increased competition from discounters such as Wal-Mart Superstore, Target, Costco, Sams and BJ Wholesale Club."

Michalak says "the 'shine' on this retail asset class, therefore, will dull. Necessity retail anchored centers' cap rates are at an all-time low, driven by low interest rates and a lack of desirability of other investment alternatives, such as office, multifamily, industrial and stocks/equities."

The broker says "retail has become the flight to safety. Once the war in Iraq and its aftermath problems have been resolved, I project the economy will stabilize; corporate America will commence hiring; manufacturing will rebound; the desirability of those aforementioned investment alternative products will increase; and investment allocations for retail will subside."

At that point, Michalak says, "the overall risk factor for retail investment product will escalate, and therefore [higher] cap rates will follow."