E-Commerce Threatening Shopping Plazas? Not in These Palm Beach County Markets
A Miami team from HFF has brokered the sale of three shopping plazas in Wellington and Royal Palm Beach for a combined $65 million since the beginning of the year.
February 26, 2019 at 02:40 PM
4 minute read
A Miami-based HFF team has brokered the sale of three Palm Beach County shopping plazas since the beginning of the year after years of talk about the e-commerce threat to brick-and-mortar retail.
In the latest transaction, Centre at Wellington Green Ltd. sold The Pointe at Wellington Green to Pointe at Wellington LLC for $43 million. The buyer financed the purchase with a $13.5 million loan, a deal HFF also brokered.
HFF senior managing director and retail group leader Daniel Finkle, managing director Luis Castillo and director Eric Williams represented the seller. HFF director Maxx Carney and associate Matt McCormack, also based in Miami, represented the buyer in securing the loan Feb. 14.
“The combination of having a great gym operator and having a high concentration of well-known and well-established restaurants drives a tremendous amount of traffic to this shopping center and all of its tenants benefit as a result,” Finkle said.
When consumers can easily order goods online, offering experiential retail such as restaurants and services is key for the survival of shopping plazas.
The 107,368-square-foot shopping center is anchored by an LA Fitness. Other tenants include Saito's Japanese Steakhouse, Five Guys, Jamba Juice, Olive Garden, Don Ramon Cuban Cuisine and Franco Italian Bistro and Sports Clips Haircuts. The Pointe at Wellington is 96 percent occupied.
But it's not just the dining and services that helped the plaza stay competitive and fetch $400 per square foot.
The plaza sits on 21.3 acres at 10100 Forest Hill Blvd. at the southwest corner of Forest Hill Boulevard and State Road 7 in Wellington.
That's a conspicuous location in an affluent community with about 100,000 cars driving through the intersection daily. The average household income within a three-mile radius is $117,014 per year, according to HFF.
More than 10 potential buyers made offers.
“It was a very strong response in line with our expectations for this type of property in a great submarket like Wellington,” Finkle said.
Principal Real Estate Investors, a real estate investment group in Iowa-based Principal Global Investors, issued the acquisition financing — a 13-year, fixed-rate loan at an undisclosed rate.
The same HFF team closed two other shopping plaza sales in January on behalf of the same seller.
The Plaza at Wellington Green at 2205 South State Road 7 just east of The Pointe at Wellington sold for $18 million.
Village Shoppes II on 441 at 10477 Southern Blvd. in Royal Palm Beach sold for $4 million.
The seller used different affiliates to own and dispose of each property. It used Centre at Wellington Green for The Pointe at Wellington, Centre II on 441 LLLP for Village Shoppes II on 441 and Plaza at Wellington Green Owners LLC for The Plaza at Wellington Green.
Finkle declined to disclose the name of the company behind the affiliates.
The sales speak of the health of the Wellington/Royal Palm Beach submarket. Rental rates stood at an average $20.01 per square foot triple net in the fourth quarter. That's more than West Palm Beach but behind Jupiter, Boynton Beach-Lantana and the Boca Raton North and West submarkets, according to a Colliers International report.
Still, both Wellington and Royal Palm Beach have been experiencing healthy retail transactions, including other sales in late 2018.
The 207,030-square-foot Shoppes at Isla Verde at 960 South State Road 7 in Wellington traded for $73.75 million, and the 305,611-square-foot Village Shoppes next to Village Shoppes II at 441 in Royal Palm Beach traded for $20.58 million.
“Investor interest and tenant performance varies by submarket, but on the whole South Florida tends to outperform,” Finkle said. “The Wellington submarket has seen great population growth, and retailers and restaurants there tend to perform particularly well.”
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