MIAMI—Are there still value-added opportunities in Miami retail? Underperforming assets aren't exactly low hanging fruit but the firms willing to go out on a limb are finding commercial real estate profits.
Miami-based private investment firm Continental Properties Acquisition Corporation (CPAC) is one of them. The firm has a steady track record of successfully repositioning underperforming assets across Florida.
Palm Johnson Plaza, a 90,000 square foot retail center at 701 Northwest 99th Avenue in Pembroke Pines, FL, is the latest example. CPAC sold the property to Bar Invest, a Miami-based private investment group, for $8.45 million just three years after acquiring the asset for $3.15 million.
“With Florida among the most desirable markets for many of the country's top retailers, we are pursuing underperforming assets like Palm Johnson, where we can utilize our in-house management, leasing and construction capabilities to carry out an aggressive repositioning strategy,” says CPAC Principal David Moret. All told, the transactions have been valued at $51 million over the past nine months throughout Florida
Here's the backstory on Palm Johnson Plaza: A CPAC-controlled entity purchased the note on the retail asset in March 2012 and obtained the title in July 2012. CPAC moved to renew a 31,000-square-foot lease with anchor tenant Winn-Dixie supermarket.
With that anchor in place, CPAC finalized a new 16,401-square-foot lease with junior anchor Planet Fitness and completed about 13,000 square feet of additional leasing. These leases increased occupancy from 54% to 86% in a two year span. CREC was responsible for leasing and property management at Palm Johnson.
At the same time, ownership embarked on an aggressive repositioning program and invested in a series of capital improvements on the retail property. Improvements included an upgraded parking lot, landscaping, and new tenant build outs.
The sale of Palm Johnson is the latest in a string of opportunistic transactions by CPAC's acquisitions team. These include the $4.15 million sale of Hancock Village Shopping Center in Clermont, FL; the $26 million acquisition of Royal University Plaza in Coral Springs, FL; and the $12.15 million sale of Pembroke Pines Professional Center in Pembroke Pines, FL.
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