ATLANTA--Lowe’s Home Improvement Center in Gainesville, GA,about 48 miles from Atlanta, has sold $7.2 million or $58.09 persquare foot with a cap rate of 9.22%, to a real estate investorbased here. The seller was V&V Lakeshore, Ltd. of Youngstown,OH, a private investor. The purchase included a total grossleasable area of 123,948-square feet which includes shop space fortwo small tenants along with the Lowe’s store. The transaction alsoincluded nearly 13 acres.

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Tim Giambrone, vice president for investments and director ofMarcus & Millichap’s national retail group in Atlanta,represented the buyer and seller in the deal.

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The Lowe’s lease is for 20 years with less than four yearsremaining, says Giambrone. The price of a retail center is afunction of the rent, he says. If the rent is low, the price willbe low, says Giambrone, while declining to say what the currentrent for Lowe’s is. The property sold for roughly $7.4 million atthe end of 1996 and its appraised value in 2009, according to HallCounty, GA records, was nearly $7.5 million.

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Located at 1514 Skelton Road, the building stands adjacent to aWalMart SuperCenter and across the street from the Colonial MallLakeshore and a Super Target. The property has an estimated averagedaily traffic count of above 17,000 and over three million squarefeet of retail within a one-mile radius, according to Marcus &Millichap. Lowe’s has invested substantially in capitalimprovements to the building, demonstrating a commitment to stay inthe area, also according to Marcus & Millichap.

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Lowes has been at the Skelton Road location since the mid-1990sand is surrounded by other retail household names. Yet, Giambronesays that the buyer of the Lowe’s property is bearing somerisk.

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“There is less than five years left on a 20 year lease,” saysGiambrone, “which means that the income stream may disappear infive years. The store can leave or stay or re-negotiate,” he says.“If they re-negotiate, that could change the income stream,” saysGiambrone.

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“Lowe’s has 1700 stores and these guys are reviewing storeleases constantly,” says Giambrone. “There is a no guarantee theywill stay.”

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