Cap Rate Plays Into Raleigh Retail Trade

RALEIGH, NC—An h.h. gregg building across from Crossroads Plaza, one of the leading regional power centers in the Triangle area, has sold for $3.7 million. Meeting Street HHG LLC, a Wilmington, NC-based investor group purchased the retail asset.

Drew Logan and David Allen of The Shopping Center Group represented the buyer. Logan tells GlobeSt.com the trade area has strong retail sales that are above average for most of the boxes and the restaurants.

“H.h. gregg was paying an under market rent for the trade area,” Logan says. “Due to the current state of the electronics category, the cap rate was affected by the credit and the concern about the industry versus the real estate. Long term, this is a real estate play for the buyer as we believe the site will only improve. If the tenant decides to leave, backfilling it at higher rents will be easily achievable.”

H.h. gregg opened its doors at the 29,000-square-foot building in 2010 after Circuit City closed on a nearby 3.6-acre site in Cary's primary retail hub on Walnut street. The property offers visibility to more than 150,000 vehicles daily. There are 300,000 people within a seven-mile radius and the average household income is about $88,000.

“This was a quick deal that closed with no hiccups,” Logan says. “The low rent, quality of the real estate, condition of the building and the fact that the buyer owns other real estate in the trade area, including across the street from this h.h. gregg location.”