COLUMBIA, MD-A trade here earlier this week, following an even higher one at the end of last year, pointed to the start of a robust retail investment sales submarket. Except for one thing: the cap rate, at 8.5%, seems unusually high. But don’t fear, says Gil Neuman of KLNB Retail Investment, the deal--the Shoppes at Gateway Plaza, which traded at $148 per square foot--was aggressively priced. The cap rate would have been lower if it had not been located in a business park. “For sure it would have been in the 7s if it had been on a main retail corridor,” he tells me.
The Shoppes at Gateway Plaza is a 24,000-square-foot retail center positioned within the 630-acre Columbia Gateway Business Community at 7185 Columbia Gateway Dr. Neuman represented the seller, Sanford Gateway LLC, an affiliate of Stanford Properties. Rick Porter of Goldstone Realty represented the buyer, Columbia Gateway Plaza LLC. The sale price for the property, which is currently 87% leased, was $3.5 million. The unanchored center houses a mix of restaurants, business services storefronts and other complementary uses.
Despite the positioning, the seller received multiple offers up until the day the deal closed, Neuman says. And, in general, Columbia, MD is a much-sought-after region among retail investors. “There is very little available that is well located and multi-tenanted,” he adds. Neuman points to the unexpectedly high price Centre Park 100--a nearly 8,500-square-foot retail center in the Columbia, MD section of Howard County--commanded. Eastern Outdoor Advertising Company picked it up for $2.3 million, or $271 per square foot, last summer. For that reason, he wouldn’t be surprised to see cap rates contract even further. “Brokers are being surprised daily.”
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