CUYAHOGA FALLS, Ohio, June 18, 2020 – Institutional Property Advisors (IPA), a division of Marcus & Millichap (NYSE: MMI), announced today the sale of The Plaza at Chapel Hill, a 458,935-square-foot Giant Eagle, Burlington, and Dicks-anchored regional power center in Cuyahoga Falls, Ohio. The property sold for $46 million to a partnership formed by three private equity groups: Baltimore-based America’s Realty LLC, New York-based Borough Equities, and Miami-based Dragonfly Investments, who together have acquired over $150 million of shopping centers including this acquisition.
The sale was brokered by a team of IPA agents who had the exclusive agreement to market the property on behalf of the seller, a New York City-based private real estate investment trust. Leading the sales team were Scott Wiles, Erin Patton, and Craig Fuller, IPA senior managing directors, along with Joseph French, Jr., IPA senior director, and CJ Jackson, senior associate. Michael Glass, senior vice president and division manager is Marcus & Millichap’s broker of record in Ohio.
“Ninety percent occupied by 26 tenants at the time of sale, The Plaza at Chapel Hill is one of the largest shopping center assets in Northeast Ohio,” said Wiles. “The offering was a unique opportunity for the buyer to acquire a dominant, dual grocery-anchored asset below replacement cost with a strong in-place rent roll. Notably, Giant Eagle, Burlington, Marc’s, and T.J. Maxx are four of the five largest tenants—comprising 58 percent of the occupied gross leasable area—and are all original occupants with leases extending back to 1985/1986. To see nearly 35 years of longevity from multiple big-box and junior-box tenants in light of the myriad economic cycles and demographic shifts over the past three decades is a testament to the strength of the property and the submarket.” Rounding out the roster of major tenants is Ross Dress for Less, Shoe Carnival, and Citi Trends. “Ross entered the Northeast Ohio market in 2019, selecting The Plaza at Chapel Hill as the site for their first store in the Akron/Canton area,” Wiles added. “We executed a thorough marketing strategy and registered over 60 unique buyers through our deep pool of active private equity groups and IPA’s comprehensive institutional platform.” The buyer was procured by the IPA team and, after a brief extension of escrow due to the COVID-19 crisis, financing was provided through Chris Nevin, senior vice president at First National Bank.
“The purchase agreement was executed prior to the COVID-19 pandemic, and the buyer was performing due diligence as the broad business shutdowns and operating restrictions took effect across Ohio,” commented French. “We were fortunate to have a well-qualified buyer under agreement who was committed to completing the acquisition from day one and continued to work with us and the seller every step of the way.”
“The buyer saw this as an ideal opportunity to further bolster their portfolio of discount retailer-oriented shopping centers in blue-collar Middle America,” noted Patton. “America’s Realty LLC is a family-run real estate company founded 30 years ago after president and CEO Carl Verstandig was introduced to shopping center ownership through his successful 35-unit grocery chain and convenience store business. Today, Carl runs the company with the same group of investors they started with 30 years ago and have amassed a portfolio valued at more than $1 billion.”
“Carl has been on an acquisition spree throughout the economic expansion of the past decade, buying dozens of community shopping centers and neighborhood strips throughout the Midwest, Mid-Atlantic, and Southeast,” added Fuller. “We look forward to their long-term success with The Plaza at Chapel Hill.”
Built in several phases on 48 acres between 1985 and 2013, the property is located along Howe Avenue just off the Ohio Route 8 exit ramps. Ninety-seven percent of the center’s occupied gross leasable area is leased to national and regional retailers, with 96% of existing tenants signed to triple-net leases. Other notable tenants occupying small-shop space include new tenants Dollar Tree and America’s Best, along with Skecher’s, Third Federal, Quest Diagnostics, Ideal Image, Sally Beauty Supply, and Great Clips. Additionally, Arby’s recently commenced a new 20-year ground lease on an outparcel near Giant Eagle.