On condition of anonymity, one area retail broker tells GlobeSt.com it sold for about $210 million, and Spencer Yablon, regional manager in the Philadelphia office of Marcus & Millichap, suggests the price tag was north of $200 million. Regarding a price of between $555 per sf and $583 per sf, Yablon tells GlobeSt.com, "that's gigantic."
The price compares with a median sales price of $140 per sf for multi-tenant retail throughout the MSA, according to M&M's second-quarter retail report. "But this is in an irreplaceable location," Yablon says. "It's a one-of-a-kind center. There's nothing like it."
"It's well worth it," agrees Steve Gartner, president of Philadelphia-based Metro Commercial Real Estate. "A property like this is priceless, whether it's for current rents or rents in the future. It's the lifestyle center everybody wants to buy or build today, even though it's 80 years old," he says. "It's a location where density and affluence come together. Lots of places have money, and lots of places have bodies, but this has lots of rich bodies."
Built in 1928, Suburban Square is among the nation's first shopping centers and its art deco architecture and mix of buildings fit the criteria for what is now called a "lifestlye" retail venue. It occupies nearly 19 acres at Montgomery and Anderson avenues here, next to a Septa rail line in the heart of Lower Merion Twp., which is one of the most affluent suburbs on the Main Line and just 15 minutes from Center City.
It was completely renovated and expanded between 1978 and 1984 by a then-owner partnership that included Baltimore-based Williams Jackson Ewing, noted for the retail redevelopment of Grand Central Station in New York City and Union Station in Washington, DC. It was again expanded in 2004 for the relocation and extension of the Ardmore Farmer's Market and the addition of an 8,000-sf Trader Joe's. A similar size Urban Outfitters unit was added in 2006.
A year ago, Macy's replaced the 100,000-sf Strawbridge's anchor. Other tenants among the center's approximately 60 stores and restaurants are Banana Republic, Apple Computer, Williams-Sonoma, Ann Taylor, Gap, American Eagle Outfitters, Starbucks and Corner Bakery Café.
According to the Kimco website, just four units aggregating 6,173 sf are currently vacant. "Companies don't buy retail based on price per sf, but on return on investment," Yablon says. "I don't know if there are tenants lined up who'll pay huge rents. But some investors will do well with little current vacancy and no return for a couple of years, if they see a big upside ahead."
On condition of anonymity, a source tells GlobeSt.com that although rent rates vary among tenants, the Suburban Square rates are typically in a range of between $50 per sf and $60 per sf. That compares with an average of $19.50 per sf for retail properties throughout Greater Philadelphia, according to M&M data.
David Robinov, managing director of New York City-based Eastdil Secured, represented the seller in this transaction and procured the buyer.
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