JACKSONVILLE, FL—Four months ago, Showcase Plaza was mostly vacant. But the Jacksonville retail real estate owner turned it around in dramatic fashion and sold the asset to an out-of-market investor willing to bet on its future.
Located in Southwest Jacksonville, the once-distressed Showcase Plaza just sold for $960,000. The buyer bought the property in a 1031 exchange for $58.80 per square foot.
Carrie Smith and Adam Foret of Franklin Street Real Estate Services represented the seller, a privately-held company with commercial real estate holdings of more than 8 million square feet across 23 states. The seller purchased the retail asset a little over a year ago and invested more than $150,000 in renovations to address deferred maintenance and renovate the façade.
“At the time we took over the listing, the property was 49% occupied,” says Smith. “Our leasing team was able to bring it up to 73% and then sell it in only four months, turning it into one of the nicer sites on Lane Avenue.”
By leasing the commercial real estate space, Franklin Street was able to reach a net operating income to obtain a capitalization rate of 9.72%. According to Foret, an unanchored strip center with all local tenants trading for a single-digit CAP rate is rare in this specific Jacksonville retail market.
“This shows that buyers are still looking for value-add opportunities,” Foret says. “Owners that are acquiring distressed properties and are willing to put the time and money into them are seeing the increased value by placing more desirable, cash-flowing properties on the market.”
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