Friday, November 24, 2006
More Investor Money Being "Parked" In The Midwest
The Ohio market is booming for multi-tenant retail, and analysts say a lot of money is being “parked in the Midwest” by baby boomers who have previously profited investing in west coast properties. Illustrating this point are sales of two suburban Cleveland power centers--City View Center and Highland Plaza--which are scheduled to close in mid-December. City View Center, a 491,341-sf property in Garfield Heights, is being sold to a New York investor for approximately $100 million, or $204 per sf. Meanwhile, a local buyer has agreed to pay $40 million, or $162 per sf, for Highland Plaza, a 247,000-sf property in Highland Heights. In fact, investors coming out of west coast deals, and getting only 2 or 3 cap rates, are gobbling up 4 and 5 cap properties coming to market in the Midwest. Previously regarded as marginal returns, compared to the 9 and 10 cap rate deals that can be found, the shortage of investment property is so acute that out-of-state investors are still bettering their position by grabbing 4 and 5 cap projects.