EXCLUSIVE: Retail Heavy Hitter Forms Own Company

"It was time to do something I've always wanted to do," Michalak tells GlobeSt.com. "You know the old saying: time waits for no man." Besides himself, Plaza Advisors has a senior financial analyst and an administration and accounting professional. Michalak plans to hire a junior broker in April who will primarily serve as a business development coordinator.

Michalak closed out his career this week with Cushman & Wakefield by brokering the $23-million sale of Regency Centers Corp.'s 106,042-sf University Collection shopping center to Ram Development Corp. of West Palm Beach. The 92%-leased, 22-year-old property, one the market for only four months, was sold for $216.89 per sf. The center is at the northwest quadrant of E. Fowler Avenue and 30th Street in Tampa.

Barry Argalas, vice president of acquisitions and dispositions for Regency Centers Corp., tells GlobeSt.com his company will continue to deal with Michalak as they have since 1997. "He has established quite a network of contacts [in the Southeast] over the years---contacts that help build sales."

During his 21 years at Cushman & Wakefield, Michalak estimates he has closed over $1 billion worth of shopping center sales totaling about 12 million sf at about 80 properties throughout the Southeast. Officials at Cushman & Wakefield could not be reached for comment by GlobeSt.com's deadline.

Although he expects a solid year of production for his new firm in 2006, Michalak also notes a few changing market investment trends. "For the third consecutive year, capital demand, including debt and equity, for class A retail product far outpaced supply," he tells GlobeSt.com. "The result of this accelerated demand is that an over-abundance of interior assets traded at historically low cap rates."

He says, "One evident trend in 2005, particularly for unanchored strip centers, was the preponderance of first-time buyers. On the debt side of the equation, one product that gained significant momentum, but came to a screeching halt, was five-to-10-year, interest-only mortgages."

Michalak says purchasers "chose interest-only debt to help boost returns and to be price competitive. Lenders received significant interest in this type loan, but shut the spigot off because of the potential long-term negative effects on asset value."

The broker says that "for this type of [interest-only loans] product to make sense, assets have to rely on considerable increases in market rents. If that doesn't occur, property owners may have to outlay capital when the loans reach maturity."

On investor types, Michalak notes a new breed entering the acquisition arena. "Besides the ever present 1031 tax exchange investors, 2005 witnessed a new class of buyers, including TICs and non-traditional foreign investors." He adds, "Two strip-center REITs, such as Regency Centers Corp and New Plan Excel, acquired large portfolios with Australian-based institutional investors."