Alexander & Baldwin Inc., a Hawaii real estate investment corporation, has acquired Carefree Court, a 85,000-sf neighborhood shopping center at the southeast corner of Tom Darlington and Carefree drives in Carefree, an upscale suburb north of Scottsdale. A Bashas' grocery store anchors the center, which brought nearly $128 per sf.
"It's a great opportunity for private investment groups to buy property," Jan Fincham, a principal and investment sales specialist with the Phoenix office of Lee & Associates, tells GlobeSt.com. "It's a buyers market right now."
The tightening of interest rates last year had frightened off most of the investors for retail property in the Valley, including just about all the institutional investors, he says. Sellers of Valley retail sites had been slow to drop prices in the face of rising interest rates, which had slowed sales even more, he says. But with interest rates back down, private investors are beginning to return and are looking for deals although the volume of sales is below levels seen in early 2000, he notess.
The nearly $128 per sf that Alexander & Baldwin has paid is a good value."That's a reasonable price," Fincham says. "You can't beat the site. There is so much traffic and it has the highest demographic in the Phoenix area." Last November, a 250,000-sf retail center at the corner of Frank Lloyd Wright Boulevard and Pima Road had fetched $41 million, or more than $164 per sf.
Homes in the Carefree area sell for, on average, $440,000. Tight restrictions by Carefree and Scottsdale prevent new retail centers from being developed. While some vacate retail space remains on the market, the increasing population and more than 30,000 new homes a year are keeping new retail space full, Fincham says. The 6% to 7% vacancy rate should remain steady through the year. "Everything is in balance unless we hit a major hiccup," Fincham says. "There is no spec money out there."
In 1999, Alexander & Baldwin acquired Mesa South, a retail center at the southwest corner of Southern Avenue and Gilbert Road in Mesa.
Fincham and Patrick Dempsey, also of Lee & Associates, represented the buyer. John Werstler of CB Richard Ellis' Phoenix office acted on behalf of the seller, Peery Arrillaga, a private real estate investment firm.
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