"To the best of our knowledge, $333.56 is the highest per-sf price posted in metro Atlanta retail circles this year," Shane advisor Rob Scheiman tells GlobeSt.com. Scheiman represented the seller. Randy Rivera of La Jolla, CA-based Capital Real Estate Investments represented the buyer. Rivera is also a principal in the buyer group.

The previous owner sold the property, on the market for three months, at this time "to take advantage of current market conditions and the buyer's need to fulfill an exchange" situation, Scheiman says. The buyer is a partnership in the exchange. The transaction was the fifth retail center Shane Group has closed in metro Atlanta at prices over $300 per sf since the second half of 2004, he says.

The other sales, all in 2004, were Hiram Walk, a 13,808-sf strip center in the west Atlanta city of Hiram, at $4.88 million or $353.56 per sf, the highest per-sf retail sale on record to date in metro Atlanta; Mansell Shops, at 10,080 sf, for $3.53 million or $350 per sf in the north Atlanta suburb of Roswell, GA; the Washington Mutual/Payless Centre in east Atlanta, measuring 6,300 feet, for $2.13 million or $338.10 per sf; and Centre Stage at Windward, a 29,720-sf north Atlanta neighborhood center in Alpharetta, which went for $9.95 million or $334.79 per sf.

Scheiman says the Shane Group has "also sold several single-tenant properties for higher than normal per-sf prices, the most notable being an 1,800-sf Starbuck property for $1.58 million or $875 per sf in central Atlanta.

Shane advisor Parker Blanchard and his associates tell GlobeSt.com they are not surprised by the $300-per-sf prices their listed properties are generating, noting "several reasons" for the $300-per-sf tags: "Continued low interest rates; a lack of high-quality inventory; and a high demand from buyers in Florida, New York and the West Coast."

Additionally, Blanchard adds that, "there is still an extraordinary amount of private capital chasing these deals, since many investors have taken advantage of the market where cap rates are considerably lower than they are in Atlanta. In general, both the out-of-area purchasers and the purchasers coming from different product types are typically the investors that are paying $300 per sf for multi-tenant retail. Remember, to the same investors, $300 per-sf may not be a terribly high per-sf amount, relative to the market where they reside."

Another factor in the $300-per-sf phenomenon is capitalization rates, he says. "In the Atlanta MSA, for example, cap rates are lower than years past, resulting in higher prices," he says. "The significant difference is a combination of low cap rates and the fact that retail markets are commanding such high rental rates, whereas leases are inked at $28 to $30 per sf." As a result, the broker says, "even if the market softens and cap rates increase 50 to 100 basis points, the resulting per-sf sales price would still be indicative of these rates."

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GlobeSt.com EXCLUSIVE: Barrett Creek Plaza Sells for Record '05 Price

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