Philadelphia-based Lubert-Adler Partners has successfully exited an equity and debt investment through the sale of two suburban shopping centers – one just outside Atlanta, GA and one in Lexington, KY. The combined sales price for both centers was $336 million.
Forum Peachtree Parkway, a 500,000 square foot lifestyle center just outside Atlanta in Norcross, GA, was sold to AEW for $150 million. The majority of space at Hamburg Pavilion, a power/lifestyle center in Lexington, KY with over one million square feet of retail space, sold for $186 million to Starwood Capital. (The Target store at Hamburg Pavilion and several outparcels did not change hands.)
Both centers were developed by Thomas Enterprises of Newman, GA. Lubert-Adler made equity and debt investments in the centers during 2008, as the economic downturn led to retailer bankruptcies and resulting retail space vacancies. Lubert-Adler invested in a third center at that time, also developed by Thomas: the 265,000 SF Forum Carlsbad in Carlsbad, CA, which was acquired in 2011 by TIAA-CREF for approximately $180 million.
“Lubert-Adler provided timely equity and debt to re-lease and stabilize each property,” said Dean Adler, CEO and Co-Founder, Lubert-Adler Partners, a Philadelphia-based firm that invests on behalf of leading national university endowments and state retirement systems. “All three of these retail centers have made a comeback with the economic recovery, but they also have potential for the new owners, given the strong demand and relative lack of retail supply in their submarkets.”
“As with our investments in multifamily, mixed-use, and other property types, our retail strategy focuses on deploying capital to create strong cash-flowing rental assets with experienced operators who possess superior knowledge and local market expertise,” Adler continued.
Hamburg Pavilion, which opened in 2000, is located on 105 acres on Interstate 75 and is one of the state’s largest shopping destinations. Most of its space is leased to big-box format stores including Kohl’s, Marshalls, Dick’s Sporting Goods, PetSmart, DSW Big Lots, and Ross. Inline tenants, including nine restaurants, occupy the remaining space.
Forum at 5151 Peachtree Parkway is a regional open-air European-style shopping center that opened in 2002. It is fully leased to Trader Joe’s, HomeGoods, Ann Taylor, Barnes & Noble, J. Crew, Williams-Sonoma, Pottery Barn, Old Navy, Banana Republic, and a variety of restaurants and other tenants.
Lubert-Adler was co-founded in 1997 by Ira Lubert and Dean Adler, who collectively have over 50 years of experience in underwriting, acquiring, repositioning, refinancing, and disposing real estate assets. Today, the Philadelphia-based firm has grown to include more than 25 investment professionals and has invested $6.5 billion of equity into assets valued at over $16 billion.