Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
Issue link: https://sct.epubxp.com/i/390025
T H E B O T T O M L I N E $12.5 million Donahue Schriber Realty Group sold the 77,600-square- foot Marley Park Plaza, in Surprise, Ariz., to IMAN Enterprises LLC, of Surrey, British Columbia. The sale included an adjacent 2.5-acre developable parcel $14.6 million Retail Centers of America bought the 139,500-square- foot Stirling Slidell (La.) Centre, outside New Orleans, from LaSalle Investment Management. Tenants include Ross Dress for Less and PetSmart $22.7 million Northeast Capital Group and BHN Associates bought Greenwich Center, a 182,600-square- foot center in Phillipsburg, N.J., from Retail Properties of America. Tenants include Best Buy and Staples $26 million Barco Real Estate Management sold the 166,200-square- foot Plaza Del Sol, in Burbank, Calif., to San Diego– based Tourmaline Capital. Tenants include Powerhouse Gym and Vallarta Supermarkets $27.2 million Slate Properties, a Toronto-based REIT, bought Waterbury (Conn.) Plaza, a 141,400-square- foot, Stop & Shop– anchored shopping center, from Kimco Realty Corp. $128.3 million Ramco-Gershenson Properties Trust acquired the 810,000-square- foot Front Range Village, in Fort Collins, Colo., from Birmingham, Ala.–based Bayer Properties $1.4 billion Cominar Real Estate Investment Trust, of Québec, bought a portfolio of 10 shop- ping centers in Québec and one in Mississauga, Ontario, from Montréal-based Ivanhoé Cambridge DEAL OF THE MONTH Deal Barometer W H O I S P A Y I N G H O W M U C H F O R W H A T Retail REITs One-year total returns SOURCE: thE bOUldER gROUp SOURCE: SNl FINANCIAl Will dollar brawl faze investors? The Dollar Tree and Dollar General brawl over who will get to buy Family Dollar has not yet dampened investor interest in the net-leased drugstore sector. But it could, if the battle drags out much longer, according to the North- brook, Ill.–based Boulder Group, which examined free- standing stores leased to the three retailers. "The immediate effect of the potential acquisition is unknown in the marketplace," said John Feeney, a Boulder vice president. "In the meantime, some investors will stay on the sidelines waiting for the effect of the potential trans- action, including possible store-closure announcements, credit rating changes, et cetera, to play out." Cap rates within the segment compressed from the third quarter of 2013 to the second quarter of 2014 by 75 basis points, to 7 percent, Boulder says. Dollar General stores represented the lowest median cap rates in the sector — 6.75 percent — owing to the abundance of newly constructed stores. Additionally, typical Dollar General leases are 15-year and triple-net, as opposed to the ten-year, double-net leases customary for Family Dollar or the seven- or ten-year double-net leases of Dollar Tree, says Feeney. U.S. retail chains have about $70 billion in lease obligations set to expire over the next four years. This opens up opportunities for landlords to move in more-profitable tenants and for retailers to adjust their portfolios, according to Moody's Investors Service. Moody's studied 62 public chains and found that the $203 billion in lease obligations on their balance sheets would drop to $133 billion by 2018 as leases expire. Office-supply chains have the fastest rate of lease expirations coming up relative to other sectors, while drug- stores have the fewest, according to the report. Sears Holdings' minimum lease obliga- tions will fall by 58 percent to $2.3 billion in 2018, from $5.5 billion this year. $70 billion in leases set to expire 82 S C T / O c t O B e r 2 0 1 4 REIT equity REIT retail Russell 3000 –5 0 5 10 15 20 25% 7/14 5/14 3/14 1/14 11/13 9/13 Dollar-store properties Median asking cap rates 3Q '13% 2Q '14% Basis-point change Dollar General 7.26 6.75 –51 Family Dollar 8.00 7.50 –50 Dollar tree 7.75 7.00 –75 Median asking price Price Price per foot Dollar General $1,138,462 $125 Family Dollar $1,250,000 $139 Dollar tree $1,556,110 $154