Inland Real Estate Buys University Heights Shopping Center
- Oct 22, 2013
Inland Real Estate Corp. has acquired a Cleveland-area shopping center in a joint venture with Dutch pension fund advisor PGGM. The purchase price was $24.9 million, excluding closing costs and adjustments. The joint venture also assumed an $18.4 million property-level loan with a two-year term, which it expects to pay off or refinance upon maturity.
Called Cedar Center South, the shopping center is located in the Cleveland suburb of University Heights, about eight miles east of downtown Cleveland. According to a press release by Inland Real Estate, the 139,000-square-foot property is currently 83 percent leased.
A 45,300-square-foot Whole Foods grocery store anchors Cedar Center South, together with a 12,100-square-foot CVS/pharmacy. Both stores have signed long-term leases, which, according to Inland, provide a stable, high-credit-quality income stream. The Whole Foods grocery store is one of only two such stores in the eastern Cleveland metro area. The center’s tenant roster also includes other national and local retailers.
Inland used proceeds from recent sales of non-core assets to pay for the shopping center. The real estate investment trust has an ownership interest in four other retail centers in the Greater Cleveland area. Together, the properties total more than 592,000 square feet of leasable space.
“We are executing on our strategy to enhance the long-term growth potential of our portfolio through the acquisition of retail assets with creditworthy tenancy, strong demographics and excellent market position,” said Scott Carr, chief investment officer for Inland, in a statement for the press. “The acquisition of Cedar Center South advances our goal of increasing the geographic and tenant diversity of our portfolio, and presents the opportunity to add value through asset improvement initiatives. Further, by acquiring the center through our PGGM joint venture, we are utilizing our capital efficiently and achieving an attractive return on investment.”
Marcus & Millichap reports that transaction velocity in multi-tenant properties in the Cleveland area has nearly doubled over the past four quarters as local investors became much more active in the market. Limited development is also expected to push down the vacancy rate to 10.7 percent, with rents expected to finish the year at $11.71 per square foot.Photo credits: Inland Real Estate Corp. Charts courtesy of Marcus & Millichap Real Estate Investment Services