A Brazilian-led investment group has acquired a Kissimmee shopping center and 7-Eleven gas station at one of the most prominent corner intersections in the city.
Vine Street Plaza Investors LLC paid $8 million on Dec. 1 for the 4.3 acres at the northwest quadrant of Main and Vine streets, facing the "Welcome to Kissimmee" entrance sign.
Forness Properties President Drew Forness, who represented the buyers, told GrowthSpotter the sellers approached him for the off-market deal because he has a 10-year history with the shopping plaza, which is co-anchored by a 26,770-square-foot Staples and a 34,000-square-foot Salvation Army store.
"I put Salvation Army in there from a tenant standpoint," he said.
Forness, who also holds an ownership stake in the project, said he had always been intrigued by the property because he felt it had not been managed to its full potential. "We got a 10-cap rate, which is very hard to do in this market," he said.
This is the investment group's third retail property purchase in Central Florida in the last two years. The company, headed by Armondo Carmo Couri Filho and Luiz Alexandre Monteiro Pires, bought the Highland Lakes Center from Simon Properties in 2014 and earlier this year acquired another Orlando shopping center, Mariner's Village.
"They own property all over the world, and they wanted to expand their portfolio here," Forness said.
For this acquisition, they sourced a $5 million mortgage from Valley National Bank.
Lee Zerivitz, managing partner of CITY Commercial, represented the sellers, the Kalman Krause Family Limited Partnership based in California. The family trust had owned the property since 2001.
Forness said the 7-Eleven acquisition was key to the deal. The investors believe the shopping plaza has strong potential for redevelopment in the future. That will depend largely on how the other corners of the intersections and the Vine Street corridor develop.
For the near term, the investors are comfortable with the current tenant composition. "It's a good corner; we felt like the price is right," Forness said. "It's either going to be tweaked with existing leases or potentially redeveloped."
Salvation Army has another four years on its lease. "They do very well, they'd like to stay," he said. "With Staples the big question mark is how long they will stay there. They just signed a three-year extension, but their business model is changing rapidly."