JACKSONVILLE, FL-Wells Fargo funded a $25 million, five-year, fixed rate loan to refinance two neighborhood malls here. Atlantic Kernan and Marsh Landing attracted the lender with market-defying occupancy rates.
The loan was originated by Scott Bois, director of originations for Wells Fargo Real Estate Capital Markets. Wells Fargo declined to disclose the interest rate.
“Both properties have consistently maintained a 90 percent occupancy rate or better over the past couple of years—and the rents have stayed strong,” Bois tells GlobeSt.com. “Both projects have good demographics-based markets and have good operators.”
Located on 18.08 acres at the southeast corner of Atlantic and Kernan Boulevards in Jacksonville, Atlantic Kernan is a 163,270-square foot shopping center anchored by BJ’s Wholesale. Atlantic Kernan has seen recent lease wins including T.J. Maxx and Shoe Carnival. Marsh Landing is a 59,586 square foot unanchored shopping center located on 5.73 acres at the southwest corner of Marsh Landing Parkway and South Beach Parkway in Jacksonville Beach. Both properties were built between 2001 and 2003.
“Atlantic Kernan is right in the middle of a big retail explosion,” Barry Goldstein, president of Goldstein Commercial Properties in Jacksonville, tells Globest.com. “This is a market that is doing well and has done well. There will continue to be more development as the market recovers.”
Jacksonville’s retail sector has been hindered by high unemployment. The Bureau of Labor Statistics reports an 11.2% unemployment rate there. More than 15,000 jobs were eliminated in 2009.
According to Marcus & Millichap’s 2010 National Retail Report, marketwide vacancy on retail properties will climb to the low 12% range even as effective rents fall to lows unseen since 2003. After a 5.9% decline in asking rents in 2009, the market will see another 3.4% decline in 2010 to $14.12 per square foot. Negative absorption will total 260,000 square feet.
“Everybody has suffered a little bit and has to pull back on rent and there is a little bit of vacancy occurring,” Goldstein says. “But that market seems to be withstanding the test of time and I think it is a vote of confidence from Wells Fargo to invest in this area of Jacksonville.”
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