Tim Giambrone, vice president of Investments at Marcus & Millichap in Atlanta, tells GlobeSt.com this sector of the retail market is seeing cap rate compression. A dwindling supply of strong credit net leased assets and the volatility in alternatives like the stock market are moving some of the larger players into the multitenant arena. They have a need to place capital or loose it in many cases.

“We are monitoring the movement of capital into these first tier grocery anchored deals, a trend we believe will continue,” Giambrone says. He points to several Publix deals that have closed this year with average cap rates in the low and upper 7% range. In fact, couple of stores in the Miami market were reported to have closed in the 6.20% range, he says, although in these cases the apparent location made them more valuable to the acquiring REIT. Giambrone says he has a long list of buyers reminding him on a regular basis of their severe appetite for these deals.

“The obvious risk for the buyer in this situation revolves around the in-line space; the less the better, in most cases,” Giambrone says. “This transaction in Suwanee had almost 50% of its total GLA outside the Publix space which reflects the element of risk to the buyer. Yet it is very likely this deal closed at a sub 8% cap, in spite of this fact.”

Village Shoppes at Windermere services the town of Suwanee, which has been recognized by Money Magazine as one of the country’s most desirable communities. Bruce Davis, a senior partner at Lee & Associates in Atlanta, tells GlobeSt.com the center represents one side of a chasm that has developed in the Atlanta retail market.

“The dollars that are conservative and want to be placed. Centers that have an anchor in tow can still attract the buyers that aren’t sitting back and waiting for the cut throat distress,” Davis says. “But there still remains a glut of all-new, unanchored centers in certain corridors that were darlings of the lending community but are still giving retail a black eye.”