CBRE IM Buys Kentucky Retail Center

Talbots is one of Paddock Shops’ major tenants. Image courtesy of CBRE IM

CBRE Investment Management has acquired a shopping center in Louisville, Ky., through one of its largest value-add funds. The firm’s CBRE Strategic Partners U.S. Value 9 joined forces with Fairbourne Properties for the purchase of the 353,665-square-foot Paddock Shops. The previous owner was AEW Capital Management, according to CommercialEdge data, which had paid $111.5 million for the asset in 2013.

Completed in 2001, the grocery-anchored shopping center was 88 percent leased at the time of sale to a variety of tenants. The roster includes Pottery Barn, AT&T, Barnes & Noble, Ulta and Gap, as well as several other restaurant and clothing retailers. Located at 4055 Summit Plaza Drive in the Northeast submarket, the open-air property is 9 miles from downtown Louisville but close to the city’s suburbs.

According to a CBRE report for the Louisville retail market, the availability rate hit 3.4 percent in the third quarter of this year. In the Northeast submarket, the index was 40 basis points lower, at 3 percent.

A $2.3 billion fund

Paddock Shops represents the one of the most recent acquisition for U.S. Value 9, which initially closed at $2.3 billion in August 2021. The fund was the firm’s largest value-add fund at the time, exceeding its original target and totaling a purchase power of $5.6 billion.

U.S. Value 9’s portfolio includes more than just retail properties, spanning newly built logistics, residential and office assets in resilient markets. One of the fund’s acquisitions involved a 314,000-square-foot responsive office building in Charlotte, N.C.

Outside the fund, CBRE IM acquired a 425,000-square-foot grocery-anchored retail center in Irving, Texas in August. Anchored by Target, Kroger, Office Depot, TJ Maxx, Michaels, Ross and Ulta, the property has a diverse mix of lessees, including medical office and restaurant tenants.