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9/16/15
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Cincinnati, OH-based institutional investment firm Phillips Edison & Company recently sold two shopping centers totaling 250k sf in the Western US in transactions with a combined value of roughly $13 mil.
In Blaine, WA, the firm sold International shopping center, a 130.4k sf grocery-anchored retail center, to a private investment firm out of Texas. Built in 1992, the property is situated on 12.96 acres at 1733 H St. It is anchored by Cost Cutter, Ace Hardware and Dollar Tree. Other tenants include Little Caesar's, Subway, Shell Gas and Everyday Fitness.
Blaine International is the only shopping center in a five-mile area and it sits across from the Blaine Border Patrol Station and less than one half mile from the U.S-Canadian border crossing, the third busiest US-Canadian border crossing in the United States with over 10.5 mil annual crossings.
Both the buyer and the seller were repped in the deal by Hanley Investment Group's Executive Vice President Eric Wohl, President Edward Hanley, and Senior Vice President Kevin Fryman. The sale price could not be disclosed.
"This property had some challenges to overcome including the 30k sf Rite Aid that went dark at the start of our marketing process. Although Rite Aid will continue to pay rent for 2.5 years, it still created a challenge for some potential buyers, but the ultimate buyer saw it as an opportunity," said Wohl.
In the other transaction, a Texas-based private investor purchased Cedar South Shopping Center, a 118.3k sf retail property located on 9.56 acres at 889 South Main St in Cedar City, UT. Tenants in the shopping center include Marshalls, Bealls, Staples and Dollar Tree. IFA Country Store, which offers everything for lawn and garden, farm and ranch, pets and family, shadow co-anchors the project with a 54.4k sf store.
Built in 1981, the center was 69% occupied at the time of the sale. Hanley’s Wohl represented the buyer in the transaction. The sale price could not be disclosed.
"Hanley Investment Group sourced this opportunity through its strong relationships with Phillips Edison and the buyer," said Wohl. "With the property being located on the main retail thoroughfare in Cedar City and providing strong upside potential through lease-up, the buyer recognized a unique opportunity to increase cash flow." Cedar South Shopping Center was
Wohl noted that a 22k sf freestanding building was included in the offering that was previously occupied by Christensen's, a local department store, until July 2015. This turnover allows for additional upside potential for the new owner through leasing the space to a stronger tenant. "The buyer is excited to backfill the space with a stronger credit tenant that will help increase value," Wohl said.
Cedar City is the largest trade area between Provo and St. George, Utah with a population base of 43,000 and an average household income of $51,860 annually. Other major retailers in the immediate area include Smith's Food and Drug, Sports Authority, Jo-Ann Fabrics, Cal Ranch Store, Walmart and Home Depot. Southern Utah University, which has over 7,500 students and 400 faculty members, is two miles to the north.
"Investors continue to take advantage of the above market returns available when purchasing anchored shopping centers located in strong secondary and tertiary markets," said Wohl. "We see this trend continuing to grow stronger as cap rates for core retail continue to drop."
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