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ORLANDO-The sale of three 100%-occupied neighborhood shopping centers may soon set a second new record in Florida. That is, if the seller obtains his $70.87 million, or $375 per-sf, asking price, area retail brokers tell GlobeSt.com.

When current ownership purchased the properties in October, it paid a recorded $378.80 per sf for one of the shopping centers, which are clustered in the city's main tourist corridor. That deal alone will set the highest per-sf price ever recorded in Central Florida, according to the Orange County Property Appraiser's office in Orlando.

RP Properties, a private Beverly Hills, CA-based investment group that owns 15 shopping centers in various metro areas, is selling a total 188,760 sf of prime retail space. The centers are International Plaza, 34,318 sf at 8200-8250 World Trade Center Dr.; Hollywood Plaza, 72,416 sf at 8024-8148 International Dr.; and Gooding's Plaza, 82,026 sf at 8201-8291 International Dr.

Public records at the Orange County Property Appraiser's office show RP Properties paid a total $51.32 million, or an average $271.87 per sf, for the three properties in October.

The records show BP-RP Hollywood LLC paid Bara Investors $21.32 million, or $294.41 per sf, for the three-parcel Hollywood Plaza on Oct. 12; BP-RP Orlando LLC paid International-Republic Associates Ltd. $17 million, or $207.25 per sf, for the three-parcel Gooding's Plaza on the same date; and BP-RP Universal LLC paid A.B. Orlando 1 Ltd. $13 million, or $378.80 per sf, for the two-parcel International Plaza on Oct. 19. All of the acquisition parties are part of RP Properties, according to the Property Appraiser's office. All of the sellers are based at 5728 Major Blvd., Suite 601, Orlando.

Area industrial brokers tell GlobeSt.com the highest price for retail-zoned land to date has been in the $50- to $60-per-sf range. RP has retained Faris Lee Investments Inc. of Irvine, CA to market its real estate. Faris Lee president Richard Walter and broker Donald MacLellan head the sales team.

Walter says his firm devised the breakup strategy of selling shopping centers by parcels instead of entireties. The three Orlando area properties are offered for sale as eight individual parcels or as entire centers. "This is our company's first possible breakup strategy outside of California," Walter says in a prepared statement. "We see strong opportunity for us to complete more of these on a national basis in the months to come."

Orlando area retail marketers and brokers are following the progress of the sales with mixed views on their outcome. "They are rolling the dice on this one," Dean Fritchen, a senior broker in the Winter Park office of Coldwell Banker Commercial NRT, tells GlobeSt.com.

"If they get their price, it will be unprecedented here," Daryl M. Carter, president of Maury L. Carter & Associates Inc., the oldest land brokerage firm in Central Florida, tells GlobeSt.com. He also notes the recorded per-sf prices RP paid for the properties are also "a new high" for Central Florida retail investments.

"My concern is that they won't have sales support for the [$375-per-sf] pricing," Carter adds. Still, he says a $375-per-sf price would be "a high watermark" for the industry here "and would most certainly raise the projected values of some of our own retail properties."

However, David W. Marks, president of Maitland-based Marketplace Advisors Inc., tells GlobeSt.com the Faris Lee Investments strategy is "sound" because "a significant part of the value of the [three shopping center] portfolio consists of freestanding, triple-net leases that are presently being marketed in Florida for cap rates of six or lower."

Marks says "this breakup strategy will significantly increase the pool of potential investors." On the $375-per-sf asking price, he says "some of the parcels are worth more; some less. There also may be some redevelopment scenarios with some of the property, based on the area's strong resort demand."

Trevor Hall Jr., a senior land broker at Colliers Arnold Orlando, tells GlobeSt.com the $375 per-sf-asking price "is getting up there, but you have to consider that number is just for the land. To get an accurate [per-sf] number, you need to factor in the sf of all the buildings and their improvements. You [also] need to compare the net rentable sf with the gross leasing area."

Walter says his company completed "the nation's largest breakup strategy" in 2003 with the $138-million sale of Torrance Crossroads, a 492,000-sf power center in Torrance, CA. His firm sold Torrance Crossroads in individual parcels to eight separate buyers, "maximizing the value of the center by 30%," Walter says.

His firm's most recent breakup strategy was the $50-million, eight-parcel sale of a 218,540-sf portion of the 477,100-sf Plaza at Puente Hills shopping center in the City of Industry, CA. The $50-million price was 15% over the original anticipated value of the real estate as a single asset, Walter says.

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Investor Asking $375 Per SF for Three Clustered Retail Centers

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