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Ask The Expert COVID-19 Trends

Ask the Expert: In Today’s Current COVID-19 Environment, Do You Hold or Do You Sell Your Retail Asset?

Ask the Expert: In today’s current COVID-19 environment, do you hold or do you sell your retail asset?

It depends on the retail asset class. Single Tenant (NNN) net lease asset cap rates will continue to hold and for certain tenants you could see further cap rate compression. If you have a credit tenant with several years left on the lease it may make sense to hold. All essential retail uses, (drug stores, dollar stores, convenience/gas) will be leading the way in the NNN lease arena. Compressed cap rates could mean better pricing for sellers but finding the next upleg trade property may prove to be difficult since they are in high demand. Uncertainty lies within the multi-tenant strip retail and larger big box (Power) centers. The net operating income (NOI) for the multi-tenant assets is a moving target today, so buyers will be looking for discounts in this space. Seller’s, however, have not adjusted yet to what will certainly be post-COVID-19 pricing. If there is additional tenant fallout or consolidation, over the next twelve months, which is likely, the market will start to see pricing shift and cap rates can be expected to continue to increase for this retail asset class. We have advised specific clients who own multi-tenant assets to take what pricing is on the table now versus waiting six to twelve months in hopes that the economy or pricing improves down the road.

John Tennant
Senior Director
John.Tennant@FranklinSt.com

404.832.1250
Ext. 0409

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Featured Deal

Franklin Street Brokers $5.088M Sale of Royal Village in Tampa, FL

Franklin Street has brokered the sale of Royal Village, a 68-unit apartment community located in the city of Tampa, Florida.

Franklin Street’s Tampa multifamily investment sales team, Avery Jordan, Kevin Kelleher, Zach Ames, Darron Kattan & Mark Savarese represented the seller, Villa Amor, LLC and the buyer, Dreamstone Investments, in the $5,088,000 transaction. The buyer paid $74,824 per unit and is planning a value-add strategy to significantly improve NOI.

“We sold at 96% of our list price during the COVID-19 pandemic,” said Avery Jordan, senior associate in Franklin Street’s Tampa office. “There is still plenty of investment capital earmarked for multifamily assets. With the acquisition of Royal Village, the buyer was able to leverage an existing portfolio to create operational efficiencies and create significant value through economies of scale.”

Royal Village is located at 13911 N 19th St in Tampa, Florida within the Innovation Alliance “Uptown” District.  Built in 1972, Royal Village is comprised of 49,688 SF of living space. The property is just minutes away from several of Tampa’s largest employers including Busch Gardens, James A. Haley Veteran’s Hospital, Moffitt Cancer Center & Advent Health Hospital.

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Uncategorized

Mixed-use Project to Rise Near Parramore

Excerpted from Orlando Business Journal

A new project featuring retail, residential and hotel uses may rise along Colonial Drive and west of Interstate 4 near downtown Orlando. 

Office, entertainment and residential developments in Parramore will spur more demand for retail in the area, said Terrence Hart, senior director at Franklin Street of Orlando, who handles retail leasing and is not involved with the deal.

For full story, visit:  https://www.bizjournals.com/orlando/news/2020/07/20/mixed-use-project-to-rise-near-parramore.html?

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Franklin Street Brokers $1.25M Sale of Park Place Apartments in Clearwater FL

Franklin Street Brokers $1.25 M Sale of Park Place Apartments in Clearwater FL

Tampa, FL (July 2, 2020) – Franklin Street has brokered the sale of Park Place Apartments, a 14-unit apartment community located in the city of Clearwater, Florida.

Franklin Street’s Tampa multifamily investment sales team, Avery JordanMark SavareseDarron Kattan and Zach Ames represented the seller, 600 Park Place, LLC and the buyer, Beatrice Properties, LLC in the $1,250,000 transaction.  The buyer paid $89,286 per unit.

“We were able to generate 13 property tours and 11 competitive offers in a two-week marketing period despite the current circumstances of the COVID-19 pandemic,” said Avery Jordan, senior associate in Franklin Street’s Tampa office. “We closed at 93.9% of our list price to an out-of-state 1031 exchange buyer. We anticipate 1031 exchanges from New York and California will continue to be a driving force for multifamily values in Florida. The property traded at a 5.60% cap rate based on tax-adjusted in-place income which is representative of the insatiable investor demand for value-add apartment properties.”  

Park Place Apartments is located at 600 Betty Lane in Clearwater, Florida.  Built in 1971, Park Place Apartments is comprised of 10,950 SF of living space on a well-kept 0.38 acre lot. Park Place Apartments is conveniently located 1 mile from Downtown Clearwater & 3.6 miles from Clearwater Beach – Voted the #1 beach in America (TripAdvisor, 2019).

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Franklin Street Arranges $12.4M Financing for Medical Facility

Franklin Street Arranges $12.4M Financing for Medical Facility in Baton Rouge

Excerpted from REBusiness Online

BATON ROUGE, LA. — Franklin Street has arranged the $12.4 million acquisition and renovation financing for Physicians Medical Center, a 76,370-square-foot medical office and hospital campus in Baton Rouge. The three-story facility features a hospital on the first floor and 44,984 square feet of leasable medical office space at the time of sale. The buyer, New Era Cos., plans to implement property renovations. Following the project, Oceans Healthcare Outpatient Services will anchor the property.

For full story, visit:  https://rebusinessonline.com/franklin-street-arranges-12-4m-sale-of-medical-facility-in-baton-rouge/?utm_source=rss&utm_medium=rss&utm_campaign=franklin-street-arranges-12-4m-sale-of-medical-facility-in-baton-rouge&oly_enc_id=2915F4554589C7W

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Franklin Street Signs Lease for First Aaron’s Gen5 Store of The Future

Franklin Street Signs Lease for Aaron’s Gen5 Store of The Future at Market Square Shopping Center in Douglasville, Georgia
First Aaron’s Gen5 Store of The Future to open in the state of Georgia

Atlanta, Ga. (July 21, 2020) –   Franklin Streetannounced that Aaron’s Gen5 Store of The Future will open its first Georgia location at Market Square Shopping Center in Douglasville, Georgia.

Franklin Street’s Retail Landlord Leasing team, Sam Kruger and Kaitlyn Theriot represented SITE Centers in the transaction. 

“We’re extremely proud to continue to drive NOI for our client through our ability to backfill big box spaces,” said Sam Krueger, Director, Franklin Street. “Aaron’s is a concept that we are extremely confident in and believe can thrive in the current economy.”

Aaron’s Gen5 Store of The Future will occupy 24,920 square feet at the shopping center. The concept includes new façade details, exterior finishes and interior sales areas. “This new store design is a great example of an omnichannel retailer adapting to shifts in consumer preferences,” said Kaitlyn Theriot, Senior Associate, Franklin Street. “It will feature software that gives customers the opportunity to custom-build their furniture, on-site quick approval processes to eliminate long lease-to-own wait times, the ability to order in-store and receive items from an off-site fulfillment service, and thus optimize the consumer experience.”

Located at 9503 Highway 5, Market Square Shopping Center is a 125,281 GLA shopping center in Douglasville, GA. The center has 21 units occupied by a diverse range of retailers, including: Hopebridge Autism Center, Super Sunny Beauty, Pet Supermarket, AT&T and YouFit Health Club.  The center sees over 1 million visitors per year and is in the 76th percentile of shopping centers within a 15-mile radius.