Federal Realty Investment Trust is jumping on the South Florida shopping center bandwagon, acquiring a Pembroke Pines retail plaza for $180.5 million.
An affiliate of the Rockville, Maryland-based real estate investment trust bought Shops at Pembroke Gardens at 527 Southwest 145th Terrace at a $7.5 million discount from the previous sale price seven years ago, records show. The price breaks down to $460 a square foot. The open-air plaza is on a 41-acre site near I-75.
Eastdil Secured brokered the deal, according to a press release.
The seller, an entity managed by Cincinnati-based Jeffrey A. Anderson Real Estate, paid $188 million for the 392,000-square-foot shopping center in 2015, records show. Completed in 2008, Shops at Pembroke Gardens’ tenant roster includes Nike, Sephora, Old Navy, DSW and Barnes & Noble.
Federal Realty, led by CEO Donald Wood, said it sees an opportunity to increase the value of its Pembroke Pines acquisition over time through remerchandising, raising rents and making incremental capital investment, according to the firm’s second quarter earnings report.
The purchase of Shops at Pembroke Gardens comes more than a year after Federal Realty and its partners, Grass River Property and the Comras Company, offloaded The Shops at Sunset Place in South Miami for $65.5 million to Alex Vadia’s Midtown Opportunities. The Federal Realty joint venture paid $110.2 million for the shopping center in 2015, records show.
In South Florida, cap rates for shopping center deals have remained steady, and the sale price per square foot rose slightly in the second quarter due to investor optimism, according to a recent Lee & Associates report.
Even with inflation dimming the national retail outlook, the South Florida market continues to outpace the rest of the country in rent growth and positive net absorption, the report states. In the second quarter, South Florida’s retail market had a vacancy rate of 3.4 percent, compared to 4.3 percent during the same period of last year. The average asking rent grew to $33.81 a square foot from $29.90 a square foot, according to Lee & Associates.
Since last year, investor appetite for shopping centers and retail plazas in South Florida has been on the rise. Recently, Seritage Growth Properties made more than $6 million in a single day by buying and then flipping a Hialeah shopping center to Sunny Isles Beach-based RK Centers for $28 million.
In the largest deal this year so far, New York-based RPT Realty paid $216 million last month for Shops at Mary Brickell Village, an outdoor center in Miami’s Brickell neighborhood. Also in July, Miami Beach investor Jimmy Resnick bought a shopping center in Kendall for $32 million.