By Drew Fleming, right, & Mark Joines, Carter Retail Investment Sales Team
(Atlanta) May 20, 2010 – Over the first quarter of 2010, the Carter Retail Investment Sales team successfully closed several deals, which we feel may be indicative of a larger trend.
In March, our team represented the seller in the sale of Liberty Square in Hinesville, a 108,000 square foot shopping center located near Fort Stewart. As recently as this month, we closed Colony Plaza in Augusta – a 216,000 square foot Food Lion-anchored center.
In the metro Atlanta area, Midtown Place was sold to Coro Realty Services LLC, marking it the largest real estate transaction of the year, according to Atlanta Business Chronicle.
What we are seeing is a convergence of corrective pricing in conjunction with the adjustment of seller expectations throughout the market. For some investors, after remaining on the sidelines for most of the downturn, the numbers are beginning to make sense again. Pricing appears to have stabilized and transaction volume has increased substantially over the last six months.
The number of offers we are receiving on our retail offerings has increased dramatically. Pricing and cap rates seem to have bottomed out and are no longer declining.
Still, a lot of uncertainty remains due to the fact that debt, especially the non-recourse variety, is still scarce. If the economy can show better fundamentals and the debt markets can begin to stabilize, we could definitely see some cap rate depression. A great amount of cash has been accumulated and is waiting to be invested in the retail sector.
We are optimistic about the future and expect to see the volume of transactions remain steady, if not increase, as seller expectations continue to align with the market and lenders begin to unload properties on which they have foreclosed.