Investors buy bank-owned Lehigh Acres retail center

BUYER: BA & BA Investments LLC (principal: Richard Applegate), Boca Raton

SELLER: RB Lee LLC

PROPERTY: 5705 Lee Blvd., Lehigh Acres

PRICE: $1.65 million

PREVIOUS PRICE: $1.75 million, January 2006

LAW FIRM ON DEED: Roetzel & Andress LPA, Fort Myers

PLANS, DESCRIPTION: A group of private investors managed by Richard Applegate of Boca Raton purchased the 29,812-square-foot Lee West Center retail and office development for $1.65 million.

The price equated to $55 per square foot.

The center was 38% occupied at the time of the sale, but even so the existing income equated to a purchase price pay off ratio (capitalization rate) of more than 8%. It is anchored by a 6,433-square-foot DaVita Dialysis Center.

A large portion of the vacant tenant space was unfinished grey space.

Lender Reliance Bank FSB took back the 3-year-old property in late 2009, and chose to focus on selling the property rather than spending the money needed to complete and lease out the vacant space.

Stephen Cunningham of LandQwest Commercial represented the seller and Christopher Leonard of Colliers International's Tampa office represented the buyer.

“This was one of the most attractive assets I've found as far as a well-rounded asset,” Leonard says. “The vacancy level did not reflect the market, which is closer to 10%. Some of the smaller spaces can be delivered as vanillas shells [to tenants] in 30 days ... We expect to be able to get the occupancy there up to the 80% to 90% range.”

Leonard says the buyer was an investor group that paid cash and was able to buy and close with a quick due diligence.