(For more retail coverage, click GlobeSt.com/RETAIL.)
PALATINE, IL-Intercontinental Real Estate Corp., based in Boston, has purchased Park Place as its first acquisition for the corporation's US Real Estate Investment Fund. Intercontinental purchased Park Place, a 230,000-sf shopping center, for about $24 million from GE Asset Management Inc., based in Stamford, CT. CB Richard Ellis brokered the deal.
Intercontinental purchased the property, in part, because the center is "an extremely well located property," says Paul Nasser, chief financial officer and chief operating officer with Intercontinental. "It is at the crossroads of two major arteries and it has visibility on both sides with multiple access points," Nasser says. In addition, "It has a nice roster of national tenants with good credit."
The center, at the intersection of Rand and Dundee roads, is anchored by TJ Maxx with 53,000 sf, Whole Foods with 50,000 sf and Office Max with 25,256 sf. A 141,616-sf Walmart at the shopping center and a bank were not included in the sale. The Whole Foods has a lease that expires in 2008 and is having a new building constructed elsewhere. Depending on how construction progresses, Whole Foods will leave the shopping center in 2008 or 2009. Nasser says Intercontinental should be able to lease the space at a rate higher than what Whole Foods is currently paying.
Park Place is currently 85% leased with average lease rates from $8 to $20 per sf triple net, Nasser tells GlobeSt.com. Intercontinental has letters of intent from at least three businesses that would bring the occupancy rate to 92%.
Intercontinental started raising funds for the fund three months ago and currently has about $130 million with another $100 million expected and a target of $1 billion. The fund will have 80% of its acquisitions properties that are "good quality assets also in major markets." The other 20% will be for "ground-up construction or total asset repositioning," he says. "We had been searching for a strategy that stretches across different economic cycles," he says. Nasser tells GlobeSt.com they are seeking acquisitions from all types of property with "a 6% to 8% current yield over the life of the investment with a 10% total return."
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