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11/16/20
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Fry's Shops at Ellsworth, a 5.8k sf, four-unit multi-tenant retail center in Mesa, sold for $2.4 mil ($414/sf). The buyer was Stephen Burke, a private investor in a 1031 exchange.
The building, located at 439 South Ellsworth Rd, is 100% occupied by Subway, Little Caesars, Pink Nails and Lotus Garden Restaurant. The property is shadow anchored by a recently remodeled Fry's Marketplace grocery store.
Steve Julius, Jesse Goldsmith and Chase Dorsett with Newmark represented the developer and seller, Evergreen-Broadway & EllsworthLLC, an affiliated entity of Evergreen Devco Inc. The buyer was repped by Cushman & Wakefield.
“Shopping centers like Fry's Shops at Ellsworth are still in strong demand because of the draw from the neighboring grocery store, a daily visit, essential goods use,” said Julius. “This particular building is remodeled with good restaurant and service uses, each with fresh five-year lease terms. It will provide simple stability for years to the new investor.”
According to Newmark Research, Phoenix retail sales volume increased slightly in the third quarter of 2020 but is still below pre-COVID figures. The overall average cap rate remained at 7.1%, while overall vacancy increased 40 basis points from 7.3% in second-quarter 2020 to 7.7% in third-quarter 2020. The vacancy rate is more than 250 basis points above the national index and is considered relatively low for the Phoenix market due to past years of oversupply. The expansion of drive thrus, discount retailers and grocers will continue to drive interest for both national and local investors.
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