GE dealing Florida shopping center

Real Estate Alert, July 7, 2004

A unit of General Electric is offering a grocery-anchored shopping center in Pembroke Pines, Fla., that's expected to fetch about $43 million.

The 257,000-square-foot Flamingo Pines was originally built as three separate retail properties. The 126,000-sf Flamingo Pines Plaza was constructed in 1987. The 88,000-sf Shoppes at Pembroke Pines was built two years later. And the 43,000-sf Home Depot Plaza was finished in 1997.

The buyer would have to assume a $28 million securitized mortgage,which cannot be prepaid before July 2008 without significant penalties. The loan carries a 7.45% rate. At the expected sales price, the buyer's initial annual yield on a leveraged basis would be about 8.7%. The yield on the cash investment would be 7%. The unidentified GE unit has given the listing to CB Richard Ellis.

Pembroke Pines is on the eastern coast of Florida, midway between Miami and Fort Lauderdale. The area within a square-mile radius of the shopping center has become a retail hub in recent years, attracting numerous national retail chains. The retail occupancy level in the submarket averages about 95%.

About 315,000 people reside within five miles of Flamingo Pines, with an average household income of more than $70,000. The center is located on a busy traffic intersection across from the 1.1 million-sf Pembroke Lakes Mall. That property, which is owned and managed by General Growth Properties, has in-line sales approaching $500/sf.

Tenants at Flamingo Pines include: Publix, which occupies 55,000 sf through 2018; General Cinema, which occupies 31,000 sf until 2009; and the U.S. Postal Service, which occupies 19,000 sf until 2006. Net operating income is projected to be $3.7 million next year and to increase to $4 million by 2009. The center has 1,560 parking spaces, giving it a ratio of six spaces for every 1,000 sf.

For more information, call CB's David Donnellan at 561-393-1606.