MEMPHIS—Countryside Center, a retail center in a Memphis suburb, just sold for a 9% cap rate. Dollar General anchors the 35,500-square foot neighborhood shopping center. The sale price was not disclosed.
Gary Shanks, a broker at Shopping Center Group, represented the seller, a Midwest-based life insurance company. John Reed, a broker at Shopping Center Group, represented the buyer, a private California-based investor.
“Typically, neighborhood centers trade at higher cap rates as was the case with Countryside Center,” says Reed. The purchaser saw the long-term potential value of this asset and owns similar properties throughout the Southeast and Midwest, thus making the center an attractive buy.”
What's the upside? Countryside Center sits in an established retail corridor on Highway 64 in Shelby County. According to Shopping Center Group, this Memphis submarket reports a population of over 165,000 people and an average household income of over $70,000 within a five-mile radius.
The retail center is 75% leased with 8,900 square feet of available space and a one-acre outparcel. Tenants include Subway, Auto Radio, Math Made Simple, and Continental Tire.
Memphis's vacancy rate is 9.6%, according to CoStar. The firm reports net absorption was positive 54,168 square feet. What's more, CoStar says, vacant sublease space increased by 30,814 square feet. By way of comparison net absorption was positive 216,127 square feet in the fourth quarter of 2013.
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