Hanley Investment Group has closed 13 Phillips Edison properties in 12 months totaling 1.5M square feet
CORONA DEL MAR, CALIF. – Hanley Investment Group, a nationally-recognized real estate brokerage and advisory firm specializing in retail property sales, announced today that in separate transactions the company negotiated the sale of two shopping centers owned by Cincinnati, Ohio-based institutional investment firm Phillips Edison & Company. The retail properties, which were located in tertiary markets in the western United States, sold for a combined value of $13 million and totaled nearly 250,000 square feet. Hanley Investment Group has completed the sale of 13 Phillips Edison properties in 12 months totaling 1.5 million square feet.
Hanley Investment Group’s Executive Vice President Eric Wohl, President Edward Hanley, and Senior Vice President Kevin Fryman represented the seller, Phillips Edison, in the purchase of Blaine International shopping center, a 130,448-square-foot grocery-anchored retail center located at 1733 H Street in Blaine, Washington. Built in 1992, Blaine International sits on 12.96 acres and is anchored by Cost Cutter, Ace Hardware and Dollar Tree. Other tenants include Little Caesar’s, Subway, Shell Gas and Everyday Fitness. The buyer was a private investment company based in Texas, also represented by Hanley Investment Group. The sale price could not be disclosed.
“This property had some challenges to overcome including the 30,000-square-foot 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.
“The buyer recognized the upside potential through the lease-up of the 39% vacancy,” said Wohl. “With a strong grocery-anchor draw, the buyer is confident they can execute their leasing plan and create significant value.”
Wohl added that 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 million annual crossings.
In another transaction, Wohl negotiated the sale of Cedar South Shopping Center located on 9.56 acres at 889 South Main Street in Cedar City, Utah. Tenants in the 118,319-square-foot 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 54,358-square-foot store. Wohl represented the buyer, a private investment company based in Texas. The sale price could not be disclosed.
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.
“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 built in 1981 and was 69% occupied at the time of the sale.
Wohl noted that a 22,000-square-foot 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.
“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.”
About Hanley Investment Group
Hanley Investment Group Real Estate Advisors is a retail investment advisory firm with a $5 billion transaction track record nationwide, who works closely with individual investors, lending institutions, developers, and institutional property owners in every facet of the transaction to ensure that the highest value is achieved. For more information, visit www.hanleyinvestment.com.