Inland Snaps Up Two Power Centers for $86M

Area construction industry estimators tell GlobeSt.com that Inland's per-sf-price was below replacement cost of the two-year-old, 565,000-sf MarketPlace at Mill Creek, located adjacent to the 1.9-million-sf Mall of Georgia in Buford, GA; and the one-year-old, 300,000-sf Stonecrest MarketPlace, adjacent to the six-year-old, 1.3-million-sf Mall at Stonecrest in Lithonia, GA, DeKalb County.

Stonecrest MarketPlace was built for $48 million or about $160 per sf, according to Shopping Center World, a trade publication. If the larger, 53-acre MarketPlace at Mill Creek was built at the same construction cost, the estimated total would have been $90.4 million.

Inland believes it has struck a good deal. "These shopping centers are excellent additions to Inland Retail's portfolio of retail properties," now totaling 14.6 million sf among 132 properties in 12 Southeastern states, says Joe Cosenza, chairman, Inland Real Estate Acquisitions Inc. "It's not often in this current market that you get the opportunity to add two centers that are on the periphery of major malls in the highly desired Atlanta market."

The deal with North American is Inland's fifth. "It's through these relationships with owners and developers such as North American that Inland is able to acquire some of the best properties in the nation," Cosenza says."

North American partner Mark Toro says power centers such as Mill Creek, Stonecrest and Camp Creek MarketPlace, another North American asset, are "back on investors' A lists" because they are "strategically located in trade areas with a demonstrated pentup demand, a strong lineup of credit tenants and limited competition."

"Despite a well-reported tightening of consumers' wallets, both retail nodes, which present value-oriented retailers, have reported consistently strong sales," says Cosenza.

Demographically, Gwinnett County is "a perennial top-10 growth engine, driving a $26 billion county economic product, the third largest in the state," Toro says. Likewise, the Stonecrest trade area "has grown faster than anticipated with a 10-year population gain of 19.4%, resulting in an excess of 480,000 people in a 10-mile radius" from the Stonecrest development.

The MarketPlace at Mill Creek is 96% leased; Stonecrest MarketPlace is 98% leased. MarketPlace's tenant roster includes Borders, Costco, CostPlus World Market, Deal$, DSW Shoe Warehouse, Jared Jewelers, Lines 'n things, Marshalls, Michael's, OfficeMax, PetsMart, Pier 1 Imports, REI, Ross Dress For Less, TGI Friday's and Toys 'R Us.

Several of the same retailers are at Stonecrest MarketPlace, including Babies R Us, CostPlus World Market, Dollar Tree, DSW Shoe Warehouse, Linens 'n Things, Marshalls, One Price Clothing, Petco, Pier 1 Imports, Ross Dress for Less and Staples.