These South Florida shopping centers traded for the highest prices this year
Shopping plazas in South Florida brought steep prices in 2019.
The Pinecrest-based commercial real estate agency MMG Equity Partners listed this year’s top 25 transactions of commercial centers across South Florida based on sales volume. Low interest rates meant buyers were willing to pay higher-than-average prices, said Marcos Puente, the director of acquisitions at MMG Equity Partners. With low interest rates expected to continue in 2020, he said, shopping centers will continue to sell at similar prices.
“The current low interest rate environment has compressed going-in yields significantly lower than they have been over the past 30 to 40 years,” Puente wrote by email. “Prices and yields have an inverse relationship, so as yields drop, prices rise.”
The top three transactions in Miami-Dade County were the Doral Plaza Shopping Center at 9701-9785 NW 41st St., Homestead Pavilion at 2400 NE 10th Ct. and the commercial building at 509 Collins Ave. that houses a Walgreens.
The 113,594-square-foot Doral Plaza Shopping Center sold for $70 million, or $616 per square foot. “Publix purchased it to continue operating as a shopping center where they are the anchor,” explained Puente.
The 295,702-square-foot Homestead Pavilion sold for $62.25 million or $211 per square foot. “It was purchased at a relatively low price per foot, because rents within the center are modest when compared to similar centers throughout South Florida,” Puente said. “Despite the low rents, tenants’ sales are very strong, and the past and future double-digit residential growth in the trade area will further boost tenant sales and tenant demand within this center.”
A 22,875-square-foot commercial building housing a Walgreens in Miami Beach sold for $33.05 million, or $1,445 per square foot.
“Couple the above-market rent on these properties with a low interest rate and yield environment,” Puente said, “and it will make for some eye-popping numbers on a price per foot basis for these type of sales, given the relatively low cap rates they trade for.”
The top three transactions in Broward were the Quay at 1515 SE 17th St., the Riverbend Marketplace at 2400 West Broward Blvd. and Pembroke Place at 10101 Pines Blvd.
The 72,946-square-foot Quay sold for $43 million, or $589 per square foot. The marketplace sold at a higher price per square foot than comparable sales because, Puente said, it “was sold as ‘covered land,’ as it has significant future development potential.”
The 80,331-square-foot Riverbend Marketplace sold for $38.5 million, or $479 per square foot. “The Riverbend Marketplace was a newly built, newly leased Class A center, that offers the buyer the stability of newer construction and longer-term, credit leases,” Puente said. “Given the build-to-suit nature of many of the newer leases, the property sold at a relatively higher price per square foot than the competitive set.”
Transactions show a healthy and balanced retail environment in South Florida, Puente said. “South Florida is land-constrained and, as a result, there remains a relatively supply-constrained market for retail. This activity makes for a good investment arena, as there is plenty of liquidity in the market, and a supply constrained market will always benefit from a stronger demand for space, and thus should experience higher rent growth than other markets.”
Sales activity in 2020 will look similar to 2019, Puente said. “Given that the Fed decided to keep current interest rates the same, and South Florida is still a healthy, supply constrained retail market, I see activity within the space continuing as it has been over the course of 2019.”
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The top 24 retail shopping center transactions by total dollars for 2019 were:
1. $96.75 million: Southern Palm Crossing Shopping Center in West Palm Beach: $277 per square foot for 349,044 square feet
2. $70 million: Doral Plaza Shopping Center in Doral: $616 per square foot for 113,594 square feet
3. $62.25 million: Homestead Pavilion in Homestead: $211 per square foot for 295,702 square feet
4. $50 million: Boynton Commons in Boynton Beach: $238 per square foot for 210,489 square feet
5. $43 million: Quay in Fort Lauderdale: $589 per square foot for 72,946 square feet
6. $43 million: Pointe at Wellington Green in Wellington: $400 per square foot for 107,368 square feet
7. $38.5 million: Riverbend Marketplace in Fort Lauderdale: $479 per square foot for 80,331 square feet
8. $37.525 million: Pembroke Place in Pembroke Pines: $237 per square foot for 158,512 square feet
9. $33.05 million: Walgreens in Miami Beach: $1,445 per square foot for 22,875 square feet
10. $26.125 million: Wellington Green Square in Wellington: $285 per square foot for 91,568 square feet
11. $25.9 million: Bluffs Square Shoppes in Jupiter: $209 per square foot for 123,917 square feet
12. $25 million: Former Toys “R” Us in Dadeland: $595 per square foot for 42,000 square feet
13. $23.55 million: Southern Palms in West Palm Beach: $117 per square foot for 200,889 square feet
14. $22.25 million: Commercial center with Best Buy, Bed Bath & Beyond, Party Center in Pembroke Pines: $237 per square foot for 93,791 square feet
15. $20.5 million: 318-338 Lincoln Road in Miami Beach: $900 per square foot for 22,774 square feet
16. $20.5 million: Polo Grounds in West Palm Beach: $158 per square foot for 129,895 square feet
17. $20.475 million: Palm Square in Hollywood: $264 per square foot for 77,621 square feet
18. $19.6 million: Shoppes of Forest Hill in West Palm Beach: $174 per square foot for 112,364 square feet
19. $19.35 million: Whitworth Farms in Delray: $219 per square foot for 88,424 square feet
20. $18.32 million: CVS pharmacy and store in Miami Beach: $1,472 per square foot for 12,443 square feet
21. $18 million: Plaza at Wellington Green in Wellington: $315 per square foot for 57,221 square feet
22. $16.5 million: Trail Plaza in Wellington: $187 per square foot for 88,066 square feet
23. $16.5 million: Palm Beach Gardens Plaza in Palm Beach Gardens: $158 per square foot for 104,481 square feet
24. $16 million: Centre at Cutler Bay in Cutler Bay: $152 per square foot for 105,091 square feet
