"Definitely, as far as retail goes, when you have a grocer included, it's the most sought after," Ryan Schubert, a senior associate with Grubb & Ellis Co.'s local office, tells GlobeSt.com. Schubert and Greg Valladao of Grubb & Ellis represented Horsch andShari Tucker with Sperry Van Ness in Phoenix negotiated for the buyer.
The 1985-built Park Lee Center sits on 5.8 acres on the southeast corner of 17th Avenue and Camelback Road in the Central Phoenix submarket. Anchored by a 50,000-sf Fry's grocery store, Park Lee is comprised of 13 tenants including Little Caesar's Pizza, PaylessShoe Source and Rent-a-Center. JW Rich plans standard facelift improvements and some re-tenanting.
Schubert notes the 8.2% cap rate served as one motivator behind the sale. Low retail vacancies was another--Central Phoenix currently boasts a 4.6% vacancy rate in that submarket. Rents at Park Lee range from $10 per sf to $18 per sf.
"A lot of investors are getting scared of outlying areas," says Tucker, a senior associate at Sperry Van Ness. "That was what attracted him to Park Lee. Your infill is there. It's always gong to be there. It has a history."
Tucker adds that it is not unusual for many retail strip centers to sell for up to $400 per sf. Park Lee came in well under $100 per sf, she says, adding that Fry's was included in the collateral helped to seal the deal. Another advantage the new owner will bank on is a light-rail stop scheduled to be built directly adjacent to the center.
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