The Florida Grocery Anchored portfolio is a core, off-market acquisition of a 95% equity interest in a five asset grocery-anchored portfolio.
The 5 properties are located in Florida – with two properties located in the Tampa metro area, two properties located in the Orlando metro area, and one property located in the Miami metro area. All of these markets have favorable projected growth rates of both population and rent.
Importantly, all five of the properties are anchored by Publix, the dominant grocer in the market, which drives continuous heavy foot traffic to the centers. Historical property data shows that shopping centers anchored by a market’s dominant grocer has both lower vacancy and higher rent growth than national averages. The anchor tenant represents 45% of the portfolio’s rent roll, providing the portfolio with strong credit protection.
Although the GCREIT continues to be highly selective regarding retail sector investments, grocery-anchored centers have historically outperformed when compared to national retail averages, in terms of both rent growth and occupancy. For example, neighborhood centers and strip centers ended 2021 at all-time lows for vacancies, showing a clear bifurcation when compared to lower-performing malls. In addition, the portfolio’s rent roll is occupied by necessity and “daily needs” based categories including medical, food & beverage, and service oriented retail.
The retail sector continues to be a story of two asset classes: grocery-anchored retail and everything else. As such, the GCREIT is delighted to acquire five, off-market assets, all anchored by Florida’s dominant grocer, which positions the assets very well within their respective submarkets and provides a defensive opportunity to obtain a durable income stream.
The portfolio is located in Florida’s largest metro areas of Miami, Tampa, and Orlando. All three are target markets for investment due to favorable demographic trends. Retail values across all three metros have outperformed the broader U.S. throughout COVID-19. In 2021, retail values rebounded in Tampa by 42% vs. 28% for the U.S. In Orlando and Miami, retail values increased by 41% and 31%, respectively, vs. 28% nationally.
At time of acquisition, the centers have average population of over 100,000 and above-average household incomes within a three-mile radius, demonstrating the strength of each asset’s trade area.