Devonshire REIT Inc. earlier this week announced the addition of a new grocery-anchored power center to its 44-property portfolio. The real estate investment trust paid $35 million to acquire the Pavilion Shopping Center, located in the Cleveland suburb of Beachwood. Huntington Bank provided financing for the transaction.
The Pavilion Shopping Center is located on Chagrin Boulevard, just minutes from I-271. It is a 249,873-square-foot power center anchored by Giant Eagle, one of the largest privately owned and family-operated companies in the nation, and sub-anchored by Big Lots, Marshalls, Michael’s and Stein Mart. In a news release, Devonshire said the center was 97 percent occupied at the time of the sale and that it is currently negotiating with a tenant for the remaining vacant space. The Pavilion Shopping Center is also home to Petco, Lane Bryant, Quiznos, Bruegger’s Bagels, Sally Beauty Supply, GNC, Verizon Wireless, Ruby Tuesday and Huntington Bank.
“The Pavilion is a perfect example of Devonshire’s acquisition philosophy — grocery-anchored, value-oriented, national tenants, high cash flow with upside and in an attractive sub-market. We also see it as a great opportunity to establish relationships with national tenants, like Stein Mart and Petco, who don’t currently have stores in any of our other properties,” Mike Denman, president of real estate operations, said in a statement for the press.
Marcus & Millichap reports that investor demand for multi-tenant assets has accelerated in the Cleveland metro area. Sales activity surged by 60 percent during the past 12 months, compared to the previous year-long period, and the average sales price rose by 5 percent, to $114 per square foot.
The brokerage firm also said that multi-tenant vacancy has remained steady at 11 percent during the past year. However, available asking rents in the multi-tenant sector increased by 4.8 percent, to $11.10 per square foot.Charts courtesy of Marcus & Millichap. Photo credit: Devonshire REIT