Job and Resident Influx are Ripe for Retail Buyers
The sale of Five Points represents a recurring trend of private equity capitalizing on stabilized secondary market retail centers at value-add pricing as institutional owners shift portfolios toward primary market core/core-plus assets.
CORPUS CHRISTI, TX—A lack of new development in Corpus ensures tenants will remain at properties for a hefty lease block. And when the time is right for a sale, popular tourist markets like these are attractive because the basic fundamentals of employment and population growth promote strong profits.
One such property is Five Points Shopping Center, a 276,593-square-foot retail center, anchored by Ross, Hobby Lobby, Party City, Bealls, CVS, Petco, Harbor Freight Tools and a freestanding Whataburger. Texas-based retail investment and development company MIMCO purchased the asset from Brixmor Property Group for an undisclosed price.
Chris Gerard, Chris Cozby, Mark Witcher and Blaine Dozier of CBRE National Retail Partners represented the seller, Brixmor Property Group.
“The sale of Five Points represents a recurring trend of private equity capitalizing on strong, stabilized secondary market retail centers at value-add pricing as institutional owners shift their portfolios towards core and core-plus assets in primary markets,” said Gerard. “This was our third transaction with MIMCO, who continues to purchase dominant real estate in secondary markets with high-quality tenants who support heavy foot traffic and excellent sales. This strategy has worked extremely well for MIMCO and other investors as they focus on the long-term income stream security with strong cash on cash returns.”
Five Points Shopping Center is located along highly traveled US-77 at 4101 Interstate Highway 69 Access Road. The retail center is 99% occupied with a strong line-up of national, regional and local tenants that benefit from the demographics in the area.
“2018 was a big investment year for power centers in secondary markets like Corpus Christi. In 2016 and 2017, seller expectations and buyer underwriting, known as the bid-ask gap, widened to a point where power centers were highly out of favor,” Gerard tells GlobeSt.com. “But last year, the bid-ask gap steadily shrank throughout the year, and investment volume and activity returned to post-recession norms. Five Points was our team’s second large power center sale in Corpus Christi in 2018, having sold Moore Plaza in the first quarter. Markets like Corpus Christi are attractive because the market fundamentals of employment and population growth promote strong sales at the property level, while a lack of new development ensures tenants will remain at the property for a long time.”
In ULI’s recent Emerging Trends in Real Estate report data, Dallas/Fort Worth returned to the number one spot due to its young workforce and high business start-up activity. Meanwhile, Austin clocked in at number six as investors follow the science, technology, engineering and math jobs projected to grow 73% faster than the broader job market through 2026, with annual wages more than double the average in these tech-heavy markets.