AEW Capital-managed vehicle pays $72M+ for renovated Winter Park retail center

Bob Moser
GrowthSpotter

An investment vehicle managed by Boston-based AEW Capital Management paid $72.75 million on Thursday for one of Winter Park's newest shopping centers, marking its re-entry to the Greater Orlando market since a major office deal in 2014. 

Located at 501 N. Orlando Ave. just south of the Lee Road intersection, the 244,984-square-foot Center of Winter Park was extensively redeveloped in recent years, with former anchor tenant Kmart swapped out for market rate leases by Ross Dress for Less, HomeGoods, Marshalls and DSW. 

AEW provides real estate investment management services to private investors worldwide, and manages more than $73 billion of real estate assets and securities, according to its website. It bought the Winter Park asset on behalf of one of its separate account clients. 

The seller was an affiliate of Palm Beach-based Sterling Organization, a private equity real estate investment firm that paid nearly $27.98 million in 2013 for what was then a value-add redevelopment asset. 

HFF Orlando's investment advisory team of Brad Peterson, Whitaker Leonhardt and Michael Brewster represented the seller. 

"This is one of the most special assignments of my career," Peterson said. "The Center of Winter Park is located near my house, so I shop it weekly, drive past it daily for work and have had the privilege of witnessing one of the most successful shopping center developments in the U.S. over the past five years, right here in my own backyard." 

The property's small shop space was also upgraded in recent years and re-tenanted with national credit tenants. Sterling ultimately increased NOI at the property by approximately 103 percent during five years of ownership.

"When you're in a closed-end fund structure, the business plan is to buy properties, add value and sell or realize profits. That is what we did here, and it was the appropriate time to harvest the gains," Brian Kosoy, managing partner, president and CEO of Sterling, told GrowthSpotter. "I loved this property, we think it should be a long-term hold and I'm certain the buyer will do extremely well." 

Officials with AEW did not respond to requests for comment on Friday.

An affiliate of AEW's Core Property Trust real estate fund also owns a majority of the SouthPark Center office park along John Young Parkway, west of Orlando's tourism corridor. It acquired the 1.5 million-square-foot complex in 2014, which included 13 Class A buildings and 32 acres of developable land that would be owned in a joint venture with Flagler Development. 

GrowthSpotter reported last month that Sterling had closed its fourth fund with $495 million in capital, and would be pursuing value-add shopping centers with grocery anchors, street retail, power centers and mixed-use properties in major markets across the United States, including Orlando and Tampa. 

"We like to continue to play in markets where we've had success," Kosoy said Friday. "Across the country we have 15 markets we're very bullish on, and Orlando would be one of them." 

Have a tip about Central Florida development? Contact me at bmoser@growthspotter.com, (407) 420-5685 or @bobmoser333. Follow GrowthSpotter on Facebook, Twitter and LinkedIn.

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