HFF in Twin Kroger-Anchored Retail Sale

ATLANTA-Atlanta’s retail market is rivaling South Florida and Washington, DC, evidenced by back-to-back grocery-anchored shopping centers in the region. The properties span 235,286 square feet in Alpharetta.

HFF marketed the assets on behalf of the seller, LaSalle Investment Management. AEW Capital Management purchased both properties for $43.15 million free and clear of debt. HFF directors Jim Hamilton and Richard Reid lead the sale of Crabapple Shopping Center and Saddlebrook Shopping Center.

“There is a limited supply of core product in the market and there is a tremendous amount of capital seeking that kind of product,” Hamilton tells GlobeSt.com. “I don’t see a lot of core product hitting the market unless there are specific reasons to sell. So when you do have a core asset that’s available it’s going to be extremely competitive.”

Crabapple Shopping Center is located at 12460 Crabapple Rd. at the intersection of Arnold Mill Road and Crabapple Road. The 106,559-square-foot property was completed in 1995 and is 94% leased to tenants including Kroger, Domino’s Pizza, Subway, The UPS Store, and Great Clips.

Saddlebrook Shopping Center is located on more than 13 acres at 10945 State Bridge Rd. The property offers 128,727 square feet and is 96% occupied by tenants including Kroger, Pizza Hut, Tuesday Morning and Goodyear.

“These were two of the better grocery-anchored centers to hit the market in Atlanta in a long time,” Hamilton says. “It checked the box for literally every pension fund advisor and institution. It was probably one of the most competitive offerings we’ve seen in years, even compared to the height of the market in 2006 and 2007.”

At the Saddlebrook location, Kroger just completed a major store renovation and the shopping center installed a fuel center in 2010. Kroger has 11 years left on the lease term at both properties, and each site has posted historically strong occupancy rates.

“In terms of pricing metrics, I can tell you that it was as aggressive if not more aggressive than metrics we saw at the height of the market in Atlanta in 2006 and 2007,” Hamilton says. “The Atlanta market is holding its own as one of the most sought after in the country, driven by barriers to entry and strong demographics.”