Kentucky’s Springhurst Towne Center Sells for $78M

February 2, 2012
By Nicholas Ziegler, News Editor

In a sale arranged by real estate investment banking firm Savills, one of the firm’s institutional-investor clients picked up the Springhurst Towne Center, an 830,000-square-foot retail complex in Louisville, for $78 million. The seller, a partnership led by D. Talmadge Hocker of the Hocker Group, was represented by Savills.

Springhurst last changed hands in 2009, when Centro Properties took it off its books for $42 million – meaning the purchase price appreciated nearly 86 percent in two years. Market conditions for retail – specifically grocery-anchored retail. “As investors continue to seek out reliable investments, cap rates will continue to fall only for core properties, particularly urban retail, fortress malls and top-ranked grocery-anchored strip centers,” Margaret Caldwell, managing director of Jones Lang LaSalle retail, said. “Average cap rates for strip centers have hovered around 8 percent this year, while strips with grocery stores have been much lower, dropping 50 basis points over the last nine months or so.”

The Louisville area has been on the road to recovery throughout 2011 – albeit slowly. The unemployment rate, which peaked at 11.1 percent in January 2011, dropped to an estimated 8.5 percent by year’s end. According to a report by services firm Cushman & Wakefield Inc., the city will see a drop in retail vacancy overall, especially as space vacated by national tenants is reabsorbed and no new construction sits in the pipeline.

“Talmage Hocker’s performance with this asset was impressive,” John Williams, managing director with Savills, said. “Not only was he able to buy the property when credit markets were frozen, he succeeded in leasing more than 60,000 square feet to new tenants and significantly strengthened the tenant roster and cash flow. “

Springhurst is the area’s largest shopping complex, with sales in excess of $200 million per year. The venue is nearly 100 percent leased to retailers including Target, Dick’s Sporting Goods, Office Max and a Cinemark Cinema.