Located off Interstate 95, the 104,000-square-foot Shaw’s Plaza in Sharon has been purchased by Worthe Real Estate from Condyne LLC for $10.4 million.
This weekend’s two-day sales tax holiday was meant to spark consumer spending in Massachusetts, but it appears no such incentives are required among real estate investors pursuing retail properties, as evidenced by a pair of just-completed transactions in Quincy and Sharon.
“The money is everywhere,” acknowledged Cushman & Wakefield Senior Director Geoff Millerd, who brokered the two deals, headlined by the $15 million purchase of the North Quincy Plaza by an affiliate of Kimco Realty. The grocery-anchored, 82,000-square-foot property at 475 Hancock St. was divested by North Quincy Center LLC, a Chicago-based firm that has owned the complex for the past five years.
“It is quality retail,” said Millerd, citing demographics such as 150,000 wallets within a three-mile radius, as well as a tenant roster that includes a Brooks pharmacy and Blockbuster Video. A Victory supermarket is currently located in the property, but that chain was recently taken over by Hannaford Bros. The store was completely renovated in 1999.
A member of Cushman & Wakefield’s Financial Services Group, Millerd also negotiated the sale of another grocery-anchored center in Sharon. Located at Exit 8 off Interstate 95, the 104,000-square-foot asset traded for $10.4 million. Featuring a Shaw’s supermarket, Brooks pharmacy and Dunkin’ Donuts, the center was purchased by Worthe Real Estate from Condyne LLC.
Institutional players were prevalent in the chase for both retail properties, said Millerd, with pension funds and other domestic sources increasingly pursuing retail, a class traditionally dominated by private capital. As exemplified in the Quincy deal, real estate investment trusts are particularly active, and CBRE/Whittier Partners broker Christopher T. Angelone said that segment is interested in local opportunities.
“Boston is one of the top places they want to be,” said Angelone, citing the perceived lack of land for future retail construction and other fundamentals helping keep rents strong and vacancy rates low despite the region’s economic difficulties. Nationally, retail assets continue to fare well, underscored by a new survey by the Real Estate Research Corp. in which institutional investors ranked conditions for that product type higher than any other property class. Retail accounted for 18 percent of the $62 billion in commercial real estate sales through midyear 2005, added the report, which was compiled in conjunction with the Certified Commercial Investment Member (CCIM) organization.
Active August
The two recent sales continue a hectic year for Cushman & Wakefield’s retail group, so much so that Millerd said it appears the typical summer slowdown is not in the cards. “In the past, August has been a dead month, but not this year,” said Millerd, whose firm handled the blockbuster $64 million sale of the Assembly Square Mall in Somerville earlier this spring and has an extensive pipeline of New England retail buildings his firm is marketing. Just last week, for example, a call for offers was made for a 210,000-square-foot center in Enfield, Conn., that Cushman & Wakefield is peddling.
“The competition is unbelievable,” Millerd said of that asset, also a grocery-anchored property that attracted both institutional and private bidders. The prospects appear good for a quick sale, said Millerd, but he declined to provide details or say who made final offers on the property, known as Brookside Plaza.
Other local retail specialists also remain strapped for time this year, with both Spaulding & Slye Colliers and CBRE/Whittier Partners enjoying bountiful assignments to sell strip centers and other retail properties. Already, Angelone and Moylan have brokered 22 sales totaling $594 million in value. Most of the deals have been located in New England, although the largest was a 13-asset portfolio that featured retail space in California, Florida and Ohio. That $340 million sale to Inland Real Estate Group was negotiated by CBRE’s Northeast Retail Team on behalf of Starwood Wasserman LLC, and included Cross Roads Plaza in North Attleboro.
A sizeable portion – about $130 million – of CBRE/Whittier’s 2005 retail sales volume has been in Connecticut, and Angelone said the team has another $200 million it expects to bring to the market after Labor Day, most of that also in New England. Other retail owners are also eyeing the hyperactive sales market, but Angelone said he believes most will not stray from their long-range strategy simply to take advantage of the current conditions.
Even if that is the case, however, most observers concurred that the retail arena is seeing one of its best periods ever on the valuation front, and Angelone said there is little to indicate a slowdown is imminent. While the situation will have to ease eventually, Angelone predicted it will be well into 2006 before any such backsliding would be noticed.
“I do think you will see significant transaction volume in the fourth quarter,” said Angelone, who would not identify the prospects he and Moylan are currently targeting. Whatever the future holds, Angelone and other specialists agreed that the current activity has been impressive. “The capital just continues to come in,” said Millerd.
