Three Georgia-Based Shopping Centers Trade for More Than $36M
The overall Atlanta shopping center vacancy rate dropped to almost half in over five years, from 9.9 percent at the end of the first-quarter 2013 to 5.7 percent at the end of first-quarter 2018, says NKF Research.
ATLANTA, GA—Retail centers remain attractive to investors, despite the attention being paid to online sales and e-commerce distribution centers. NKF Capital Markets brokered the sale of two Publix-anchored shopping centers and a fitness-anchored center in Georgia. The three deals are valued at more than $36 million and encompass nearly 200,000 square feet.
According to Newmark Knight Frank Research, the transactions reflect the bullish shopping center market, especially in Atlanta, where shopping center inventory has seen significant growth over the past five years, adding 4.5 million square feet of new space. The overall Atlanta shopping center vacancy rate dropped to almost half in over five years, from 9.9 percent at the end of the first-quarter 2013 to 5.7 percent at the end of first-quarter 2018.
“Grocery and fitness-anchored shopping centers remain solid investments, especially for private investors shopping at the
$10 to $20 million price point,” says Drew Fleming, NKF Capital Markets senior managing director. “At Paradise Shoppes of Perry, the Publix anchor was the primary attraction for the investor. The center was experiencing tremendous leasing momentum at the time of sale, which is a testament to how well Publix performs at this location.”
Cypress Development sold the 72,200-square-foot Paradise Shoppes of Perry shopping center for $11.4 million to Flag Wharf. The center is 96-percent leased to tenants including Publix, Subway, Marco’s Pizza, El Jalisco Grille and T- Mobile. Paradise Shoppes of Perry is located at 275 Perry Parkway in Perry, GA. NKF’s Fleming and senior managing director Mark Joines, with associate partner Henry Kushner, represented the owner/seller.
In Atlanta, Lakha Properties sold its 46,219-square-foot Publix-anchored shopping center, known as Shallowford Exchange, for $12.45 million to Shallowford, an Atlanta-based private investment group. Located at 2558 Shallowford Road, the center is fully leased to Publix, Subway, Marco’s Pizza, UPS Store and MetroPCS. Joines, Fleming and Kushner represented the owner/seller.
“Infill shopping centers like Shallowford Exchange will continue to create value for investors because they are leased to a roster of internet resistant tenants such as hair salons, medical offices, restaurants, dry cleaners and other service providers,” says Joines. “And overall, the grocery store anchors are evolving to offer a modern omnichannel experience for consumers. As one example, we are seeing more amenities like designated parking for shoppers who prefer ‘direct-to-trunk’ grocery delivery services.”
NKF Capital Markets’ third deal took place in Alpharetta, GA, at 12315 Crabapple Road, where WB Holdings-Silos purchased The Silos at North Farm Marketplace, a 78,765-square-foot fitness-anchored center, for $12.5 million. The center is 97-percent leased to tenants such as One Life Fitness, Alpine Bakery and Bach to Rock. Joines, Fleming and Kushner represented the buyer.
“The Silos is a perfect example of the growing demand for shopping centers leased to sound gym operators that pull in thousands of patrons per week,” says Joines.