WEST PALM BEACH, FL-Southdale Shopping Center, an87,566-square-foot Publix-anchored center, sold for $12.9 million.CVS, the U.S. Postal Service, and Blockbuster are also tenants inthe vintage 1950s center.

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Cushman & Wakefield’s Southeast Capital Markets GroupExecutive Vice President Mark Gilbert, Executive Director AdamFeinstein, and Senior Financial Analyst Eric Williams representedthe seller, Southdale CRP LLC, an affiliate of Palm BeachGardens-based Ram Development Company. The buyer was BT Palm BeachLLC, an affiliate of Horsham, PA-based BET Investment.

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“This sale is a good example of investors buying centers withlong-term, seasoned tenants that have a proven history of strongsales,” Gilbert tells Globest.com. “Instead of a Publix with a20-year lease, you may have a Publix into its option period but therisk of losing the anchor is low because sales are so strong andthere are limited development options nearby.”

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Located at the intersection of Southern Boulevard and ParkerAvenue, Southdale Shopping center was originally developed in 1958,but underwent major renovations in 1996. The center is 100% leased.With today’s pricing approaching early 2007 levels, Gilbert saysRam decided to leverage strong market demand for high qualitygrocery-anchored centers.

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The cap rate was not disclosed. But Edward Kearney, managingdirector of Sperry Van Ness in Palm Beach Gardens, tellsGlobest.com Publix-anchored centers are selling at low cap rates toinvestors looking for income.

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“Low cap rates are a little risky in this market,” Kearney says.“If you lose a couple of tenants, there goes your yield. But therejust isn’t that much product out there and these properties areattractive to cash buyers. If buyers have to fund these types ofdeals with loans it probably wouldn’t make much sense.”

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The X factor in the deal is the Blockbuster space. Blockbusterfiled for bankruptcy in September and store closings are likely. IfBlockbuster closes its Southdale Shopping Center location, the newowner suddenly loses a long-term tenant. But that might not be analtogether bad development in what is a highly stable assetinsulated from new construction risk in an infill location.

“Blockbuster has probably been there for many years at a very lowlease rate,” Kearney says. “Blockbuster was considered a very highcredit tenant when Wayne Huizenga owned it. If Blockbuster goesout, the new owners probably have an opportunity to get a littlebit higher rental rate. That may have factored into the price theypaid.”

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