Alexandria Commons Trades for $66M, Sub Six Cap

ALEXANDRIA, VA-American Realty Advisors, a Glendale, CA-based company that has been on an acquisition spree of late, recently acquired Alexandria Commons for approximately $65.7 million, at a sub six cap rate, according to market sources familiar with the transaction. The 145,273-square-foot shopping center, located at 3117 Duke St., is about 97% occupied, H&R Retail principal Michael Gorsage tells GlobeSt.com. That, plus its class A status and key location, made it a hotly-contested property, according to Gorsage, who brokered the deal. “We haven’t seen many properties of this quality come to market,” he says. “In the end we had three highly-qualified institutional bidders from which to choose.” A local investor was the seller.

Originally built as Hechinger Commons, Alexandria Commons is now anchored by Giant grocery and Staples. Other retailers in the 12.5-acre complex include Panera Bread, Lone Star Steak House, Starbuck’s, UPS and Baja Fresh. Giant took the former Hechinger’s space and converted and expanded the center.

Competition for class A office product in the Washington area can be intense. It is not surprising to see institutional investors, therefore, compete for retail products here. That, though, is changing, Gorsage says. “Right now, cap rates are as low as they have ever been and properties are going to market,” he says. “I would say there are about 26 assets that are for sale now, 14 of which are under contract.”

For its part, American Realty Advisors is acquiring properties all over the country, not just the under-retailed Washington, DC area. At the beginning of the year it acquired Festival at Riva, a 304,251-square-foot grocery-anchored community retail center in Annapolis, MD.

More recently--as in last week--it acquired Oak Brook Regency towers in the Chicago area. And in June it acquired a 305,585-square-foot office building in Houston's energy corridor as well as a 306,791-square-foot office building in Denver.