10C — August 30 - September 12, 2013 — Shopping Centers — Mid Atlantic Real Estate Journal
www.marejournal.com
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he supply/demand im- balance for institution- al-quality retail real By Joseph Lowry, Levin Management Tight retail real estate investment market fuels advisory activity T ters as well as for off-market shopping center acquisition opportunities.
s/f, Whole Foods-anchored center in Pennsylvania is a great example. When this asset came on the market, demand was fierce and dozens of offers were received. The center ultimately traded far above the initial pricing expec- tations at a low five percent cap rate. When investors make the decision to “reach for a prop- erty” with very tight spreads, they need to be absolutely cer- tain as to the strength of the center and market trade area, as well as the strength of the tenants in the center. While institutions and fund manag- ers have their own talented in-house acquisitions teams, they are often acquiring many of the various property types, including office, multifamily, and industrial as well as niche property types. In addition, they may be responsible for covering very large geographic areas of the U.S. Because of these challenges, they will often seek a trusted retail ad- visor who is landlord-focused and knows the local markets on a granular level. Some retail real estate ser- vices firms have been serving that niche by helping inves- tors better understand mar- ket-specific retail fundamen- tals. Such advice may include providing market lease rates and other terms, demographic profiles for tenants, specific property nuances, including potential tenants at risk and property deficiencies, the center’s position in relation to competing and proposed shopping centers, capital and expense budgeting informa- tion, and other underwriting assumptions. In the case of the Whole Foods-anchored center mentioned previously, Levin, for example, received multiple inquiries from po- tential buyers looking for this type of guidance. The Market for Off-market To an even greater degree, a few real estate services companies have been getting more involved in sourcing off-market shopping center in- vestment opportunities. Many sophisticated owners may wish to avoid the open-mar- ket process. They know what their properties are worth and they know that in today’s cli- mate, they can get top dollar regardless of how the center is marketed. At Levin, sourc- ing off-market opportunities continued on page 12 C
estate in the No r t h e a s t continues to exist, with h u n d r e d s of millions o f d o l l a r s o f c a p i t a l chasing an e x t r eme l y
While their acquisition cri- teria and “sweet spots” vary somewhat, most institutional investors and fund manag- ers today are still looking for class A, dominant grocery- anchored shopping centers located in gateway markets. At the height of the com- mercial real estate market in 2007, these centers were trading at very low cap rates and we are seeing those pric- ing levels once again in 2013 for true institutional quality retail centers. The recent sale of a 100,000
Joseph Lowry
limited number of acquisi- tion opportunities. For land- lord-focused retail real estate services specialists, this is fueling a notable increase in advisory activity for both the broker-listed shopping cen-
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Lease: Old Bridge, NJ CHEESEQUAKE COMMONS; is a 35,000sf CVS anchored neighborhood strip center. We currently have three vacancies; 1,500sf. and 2,500sf in-line suites and a 3,700sf end-cap. Ciro Pizza Café’ recently leased a 4,755sf end cap and is open for business. The strip center is located ¼ mile from the Matawan Train Station, and exit # 120 of the Garden State Parkway. Ideal uses include; Fitness, medical, optical, dental, travel, electronics, office supplies, home improvements, florist, computer store, etc.
Lease: Flemington, NJ A free-standing 9,600sf store formerly
occupied by Rite Aid that features 1.38 acres, up to 69 car parking, a large pylon sign and located at car parking, a large pylon sign and located at the traffic light entrance to The Shoppes at Flemington lifestyle center. The site, which serves the communities of Flemington, Branchburg, East Amwell and White House is surrounded by such well known retailers as: Burlington Coat, Kohl’s, Michaels Arts & Crafts, Bed Bath & Beyond, Marshalls, Drees Barn,Talbots & Jos.A.Bank.
Remco recently doubled its office space and is actively seeking full time agents who are licensed in New Jersey & Pennsylvania to join our team in order to support our ever growing list of representation assignments. Please contact Peter Gallicchio at (732) 253-0888x11 or via email at pgallicchio@remcorealty.net for a confidential interview.
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