CLEVELAND—Devonshire REIT, Inc., an Ohio-basedreal estate investment trust, has just acquired PavilionShopping Center in suburban Beachwood for $35 million. AGiant Eagle grocery store anchors the249,873-square-foot center and Big Lots,Marshalls, Michael's andStein Mart act as sub-anchors. The purchase comeson the heels of Devonshire's $31 million purchase of five other centers in the Toledo area.

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In the past few months, the retail sector started buzzing withsome excitement as it became apparent that the lingering effects ofthe recession were wearing off and consumer demand was back. Andeven though that has helped grocery-anchored centers become quitepopular with investors due to their ability to always draw incustomers, Devonshire officials say it's been their specialty.

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"While the merits of grocery-anchored centers, and attractivesub-market returns, just now seem to be making the industry news,the acquisition and management of these types of properties arebuilt in to Devonshire's DNA,” says ChrisCampbell, chief executive officer of Devonshire REIT.“It's what we've done from the beginning, so we feel we aresignificantly ahead of the curve which gives us a competitive edgeon getting deals like this one, which adds over $1 million to ourcash flow after debt service, done."

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Huntington Bank provided financing for thetransaction.

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Other national tenants at Pavilion include:Petco, Lane Bryant,Quiznos, Bruegger's Bagels,Sally Beauty Supply, GNC,Verizon Wireless, Ruby Tuesdayand Huntington Bank. Tenants occupy 97% of thecenter with the one remaining vacant space currently undernegotiation.

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The center sits on Chagrin Blvd. just minutes from I-271. Thearea includes some of the highest-income suburbs in the state.Households of families within one mile have an average income of$146,701 and almost 250,000 people live within five miles.

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"The Pavilion is a perfect example of Devonshire's acquisitionphilosophy - grocery-anchored, value-oriented, national tenants,high cash flow with upside and in an attractive sub-market,” saysMike Denman, president of real estate operationsfor Devonshire. “We also see it as a great opportunity to establishrelationships with national tenants, like Stein Mart and Petco, whodon't currently have stores in any of our other properties."

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Brian J. Rogal

Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.