VOLUME 31, NUMBER 08
©2015 Law Bulletin Publishing Co.
August 2015
What do investors love? Strip centers anchored by grocery stores … still
By Dan Rafter, Editor
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tability. That’s the word Joe Girardi uses when talking about the retail strip centers across the Midwest that are anchored by a Trader Joe’s, Whole Foods Market, Meijer or other grocery stores. These are the retail centers that investors most eagerly target, Girardi says. And he should know. Girardi, principal with Mid-America Real Estate Corporation, recently led the investment sales team that brokered the sale of Heritage Commons in Lakeville, Minnesota. Austin, Texas-based Epic Real Estate Partners purchased the 138,690-squarefoot grocery-anchored neighborhood center in the Minneapolis market earlier this year. Though the center includes tenants such as Subway, Papa Murphy’s
and Great Clips, the real star of the deal was the Cub Foods grocery store that anchors the center. Why? Investors know that grocery stores are one of the safest businesses in the United States. In bad economic times, consumers might pass on the take-out pizza or the expensive haircut. But they’ll always need to eat. They’ll always, then, need to shop at their local grocery store. “Grocery-anchored shopping centers have always had much more stability than your typical multi-tenanted shopping centers,” Girardi said. “The grocery stores tend to do better in economic recessions, and that is something that appeals to risk-averse investors.” The numbers back up Girardi. Real Capital Analytics says that about $12.8 billion worth of grocery-anchored retail centers were sold in 2014. That is a jump of 34.6 percent from 2013. Grocery to page 18
The Midwest rolls out the welcome mat: Hotel sales, development on the rise By Dan Rafter, Editor
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ow hot is the hotel industry across the Midwest? Just ask Ronn Thomas, senior director of brokerage services with Cushman & Wakefield|NorthMarq in Minneapolis. This CRE pro in the past 15 months has helped close six hotel transactions for his clients. These sales have stretched from Rochester, Min-
nesota, to New Richmond, Wisconsin. In 2015 alone, Thomas has closed three hotels transactions. And the market is showing no signs of slowing. Thomas already and has additional properties under contract as he works closely with clients including Kelly Inns, Titan Development & Investments, InterMountain Hotels and Marriott. Thomas says that there’s no secret to the increase in business. It’s all about the economy. “The economy is strong, so hotels will follow that,”
Thomas said. “People are traveling. Businesses are sending their employees out into the field again. People are taking family vacations. Because of this, the hotels are doing well.” Thomas points to his own market, Minneapolis/St. Paul. He says that a handful of new hotel projects are in the planning stage or under construction, with some ready to open in the next several months. Hotels to page 19