Southgate USA

Maple Heights | Ohio

Offering Summary

  • Status: just listed
  • Price: $28,500,000
  • Cap Rate: 8.49%
  • Price Per SF: $40.27
  • Net Operating Income: $2,419,613
  • Price/SF: $40.27
  • Year(s) Built: 1955-1972
  • Lot Size (Acres): 73.61
  • Major Tenants: Home Depot, Forman Mills, Shoppers World, O'Reilly Auto Parts, Octapharma Plasma, Family Dollar, Dollar Tree, Aaron
  • Southgate USA – Dynamic 707K SF, 74-Acre Regional Shopping Center – Value-Add / Redevelopment / Parcelization Opportunities in Infill Cleveland Suburb
  • Offering Consists of 15 Separate-Parceled Multi-Tenant & Single Tenant Properties Comprising 711,758 SF on 73.6 Acres with 76.5% Occupancy
    • 7 Multi-Tenant Retail Centers – 533,183 SF Leased to 70% Occupancy, Contributing 54% of In-Place NOI
    • 8 Single-Tenant Propertites – 174,515 SF with 7 of 8 Buildings Leased, Contributing 46% of In-Place NOI
  • Strong In-Place Yield and Underlying Value Metrics
    • Pose Exceptional Opportunity for Long Runway & Low-Risk Speculation on Parcel Spin-Offs & Redevelopment
    • In-Place High-Yield Opportunity: 8.5% Cap Rate on $2.42M In-Place NOI
    • Priced Far Below Replacement Cost at $40/SF on Existing Building GLA
    • Covered Land-Play with Land Basis/Price of $387K/Acre; $232K/Acre for Four Specific Redevelopment-Conducive Tracts Totaling 43 Acres (4 – 25 Acres Each)
  • 73.6 Acres of Irreplaceable Real Estate that has Successfully Operated as a Shopping Destination Since the 1950’s
    • Just 0.5-Mile from Two I-480 Exits (I-480 = 160,830 VPD)
    • Immediate Vicinity to the I-480 & I-271 Interchange – Busiest Interchange on Cleveland’s East Side
    • Within One of Cleveland’s Most Dense Infill Suburbs: 12K within 1-Mi; 81K within 3-Mi
    • 55K+ VPD on Arterial Roadways – Two Major Intersections (Route 8 and Warrensville Center Road) Each See 25-30K VPD
  • Home Depot Anchored & Grocery Shadowed; Strong Community Draw with 3.7 Million Annual Customer Visits from Cleveland’s East Side Suburbs
    • Anchored by The Home Depot Ground Lease– Leased to NNN Terms thru January 2029; Separately-Parceled Freestanding Building
    • Shadow-Anchored by Giant Eagle Grocery Store (NAP) Drawing 800K Customer Visits to Southgate USA Annually
    • Co-Anchored by Shoppers World, Forman Mills, O’Reilly Auto, Dollar Tree, Family Dollar (x2), Octapharma Plasma
  • Strong Underlying Redevelopment Potential with Low Effective Prices Per Acre, Promoting Redevelopment Feasibility
    • Potential To Assemble Up to a 25.5-Acre Contiguous Site (2,200+ Feet of Corridor Frontage); Offered at $248K Per Acre
    • Three Additional Potential Redevelopment Sites with Low Offering Prices: 3.8 Acres ($432K/Acre), 5.39 Acres ($193K/Acre), and 8.11 Acres ($111/Acre), All with Potential to Further Subdivide
    • Substantial Industrial Demand in Area Indicated by Recent Nearby Developments – 855K Amazon Distribution (2018), 145K Amazon Distribution (2020), 302K SF Spec Industrial (2022), 145K Chick-fil-A Distribution (2022)
    • Wide Variety of Potential Redevelopment Demand – Healthcare, Industrial, Multi-Family Housing, Seniors Housing, Self-Storage, Single-Tenant Retail (QSR, Auto), etc.
  • Ability to Reduce Basis & Capitalize on Break-Up Value Arbitrage via Spin-Off Dispositions of Single-Tenant Properties & Multi-Tenant Strips:
    • All Properties Except Former Rite Aid are Separately Parceled (Allowing Immediate Spin-Off Disposition Opportunities)
    • Home Depot – $779K NOI (32% of Offering NOI) – Largest Opportunity to Reduce Basis & Largest Cap-Arbitrage $ Profit Potential
    • Chase Bank – Far Below-Market Rent at $34K Annually; Bite-Size Price, NNN, IG Credit, and No Options
    • KeyBank – 1.4-Acre Hard Corner (25K VPD) Parcel, Low $79K NOI ($14/SF); Nicer/Newer Building with Drive-Thru; IG Credit
    • Rally’s – Low $33K Annual Rent; Next to Brand-New Chipotle with $124K Annual Rent
    • Former Rite Aid – Prime 10,752 SF Recently Vacated All-Brick Building; Approx. 1.6-Acre (Not Separately Parceled) Prime Hard Corner Site with 30K VPD
    • Several Other STNL & Stabilized Shopping Strips Offer Opportunities for Spin-Off Dispos to Reduce Basis if Desired
  • Potential to Execute a Variety of Business Plans to Achieve Maximum Value-Add & Redevelopment Potential
    • Example 1: Retail Investor Acquires Property, Retains Key Retail Pieces Suitable for Investment/Hold Strategy, Sells Redevelopment Sites to Non-Retail Developers
    • Example 2: Non-Retail Developer/Operator Acquires Property, Re-Sells Stabilized Retail Investment Properties to Shopping Center & STNL Investors, Effectuates Large-Scale Non-Retail Development on Remaining Tracts
EXCLUSIVELY LISTED BY:

Scott Wiles

Senior Managing Director