By Nicholas Ziegler, News Editor
In two separate transactions, Inland Real Estate Corp. has spent an aggregate $109.4 million on Ohio shopping centers. The first deal, closed on the last day of February, saw the company pick up the Cincinnati-area Stone Creek Towne Center for $36 million and, earlier this week, Inland spent $73.4 million on Westgate Shopping Center in Fairview Park, near Cleveland.
Scott Carr, executive vice president and chief investment officer for Inland Real Estate Corporation, called the purchases “a way to facilitate operational and leasing efficiencies.” He went on to note that the area’s demographics, coupled with the properties’ positioning, were “acquired at prices that deliver strong returns.”
Research by Marcus & Millichap Real Estate Investment Services supports Carr’s assertions. The Cincinnati market, the firm noted, is starting to see increased activity as “retailers will migrate to dark in-line space … giving operators leverage to lift rents.” And that increase will also be seen outside the urban core, which should drive vacancy rates “to a three-year low by the close of 2012.”
Cleveland, similarly, is forecasted to see an increase in deal activity. “Multi-tenant deal flow will pick up this year as banks release troubled assets from their books,” M&M wrote.
Westgate is the dominant grocery-anchored power center in a densely populated trade area. Formerly an enclosed mall, Westgate was recently redeveloped and now features approximately 474,000 square feet of gross leasable area, including a 119,700-square-foot Lowe’s Home Improvement store on a ground lease. In addition to Lowe’s, anchor tenants at the center include a 94,500-square-foot Kohl’s and regional specialty grocer, Earth Fare. A balanced variety of national and local tenants fill out the tenant roster contributing to its 94 percent occupancy rate. Inland simultaneously closed a 10-year interest-only, 4.9 percent fixed-rate mortgage loan of $40.4 million on the property.
Stone Creek Towne Center is a recently developed regional power center located in that features approximately 142,800 square feet of leasable space and is anchored by Bed, Bath & Beyond, Old Navy and Best Buy. Other national tenants include Rue 21, Lane Bryant, Five Guys Burgers, The Men’s Warehouse and Starbucks. The center is shadow-anchored by separately-owned Meijer, JC Penney and Toys “R” Us stores. The center is approximately 98 percent leased. The venture secured a 10-year, 5.0 percent fixed rate mortgage loan of $19.8 million, which closed simultaneously with the property.