Pine Tree Commercial Realty, partner buy South Pasadena Shopping Center

BUYER: W-PT South Pasadena VII LLC (W-PT Holdings VII LLC), Chicago
SELLER: VV Florida I LP
PROPERTY: 6818 Gulfport Blvd. S., South Pasadena
PRICE: $21.1 million
PREVIOUS PRICE: $10.38 million, November 1996
LAW FIRM ON DEED: Greenberg Traurig PA, Miami

PLANS, DESCRIPTION:
A joint venture of Northbrook-based Pine Tree Commercial Realty LLC and Chicago's Walton Street Capital purchased the 165,886-square-foot South Pasadena Shopping Center for $21.1 million.

The price equated to $127 per square foot. That figure is lower than the two-year average price per square foot for retail space ($138) in the Tampa Bay area, according to the CoStar Group.

Originally built in 1959, the shopping center was well occupied and stable for much of that history. But in 2009, the center's main anchor, Publix, closed its store in favor of another location. Since then, the center's occupancy has dropped considerably. Ultimately, it lost 10 of its 26 tenants.

That declined started turning around in April, when a new Walmart Neighborhood Market opened. The center is currently 67% occupied, but new leases signed with Pet Supermarket and a yoga studio would increase that to 73.5%. Another 16,000 square feet of leases are pending, which would bring the occupancy above 80%.

The center's current tenants include Beall's Outlet, Dollar Tree and a CVS pharmacy.

Jim Michalak, Mike Cvetetic and Nick Castellano of Plaza Advisors represented the seller, a German syndication named VV Florida I L.P.

Michalak says the value-add proposition of the center combined with its location with little if any current or future competition, made it attractive.

“It was in very good condition, considering its age,” he says. “They just renovated the parking lot. It's a very unique center, because there are a lot of barriers to entry.”

The purchase price equated to a payoff ratio based on income (capitalization rate) below 5%.

Jannie Delrio of Retail Solutions Advisors will manage leasing the center for the new owner.

The acquisition is Pine Tree Commercial Realty's 73rd and brings the company's current portfolio to 3.5 million square feet in 15 states.