Indianapolis-based real estate investment trust Kite Realty Group has announced the acquisition of Cool Springs Market in Franklin, Tennessee. The full service REIT purchased the 224,000-square-foot shopping center for $37.5 million—this figure, however, does not include closing costs.
Cool Springs Market, located at the intersection of I-65 and Cool Springs Blvd, draws its customer base from a five-mile trade area with a population of 85,200 boasting average household incomes of $124,000 which is in compliance with the buyer’s declared focus on the development, construction, acquisition, ownership and operation of high quality neighborhood and community shopping centers in selected US growth markets. “Nashville is a new market for us that we are very excited to be entering as it aligns directly with our geographic strategy of growth cities in the Southeast, Midwest, and Texas,” said Kite Realty Group Trust Chairman and Chief Executive Officer John A. Kite.
According to a recent Nashville Market Outlook 2013 report released by CBRE, Music City’s retail market will continue its upward climb throughout 2013 due to the city’s multifaceted and resilient economy. Coupled with its investment rates proving more agreeable than those of first tier markets, Nashville’s retail market is poised to see pricing pick up throughout the year, especially in the case of well performing grocery-anchored properties, as well as attractively located power and community centers. Cool Springs Market’s appealing location, as well as the presence of a non-owned Kroger at the site, makes the acquisition one that guarantees healthy returns. CBRE’s evaluation of the market shows cap rates for Class A grocery-anchored properties moving between 7-7.5 percent with an expect tilt below the seven percent mark.
Cool Springs Market’s 5 percent vacancy rate is also above metro Nashville’s 7.8 percent year-end vacancy rate. Tenants include Dick’s Sporting Goods, Marshall’s, Staples and JoAnn Fabrics.
Its $39.5 million purchase price would also place it in the top three purchases of 2012.
Image courtesy of Dwight Burdette via Wikimedia Commons
Chart courtesy of CBRE