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South Florida investor pays $7.2M for Kissimmee shopping center

Frost Point Capital paid nearly $7.3 million for the Shoppes at Kissimmee this week.
Frost Point Capital paid nearly $7.3 million for the Shoppes at Kissimmee this week. (Colliers International)

A fledgling West Palm Beach real estate firm has made its first major investment in Central Florida, paying $7.27 million this week a neighborhood retail center south of downtown Kissimmee.

Frost Point Capital was founded less than a year ago with the goal of acquisition, management, and repositioning of commercial assets throughout the Southeastern United States.

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President Taylor Gerhardt told GrowthSpotter the all cash deal took a few months to pull across the finish line. He was sold on the location at the intersection of S. John Young Parkway and Pleasant Hill Road because of its strong traffic counts and new residential development on the way.

“During the pandemic, a lot of investors got nervous,” he said. “But if you go to these neighborhood centers that focus on people’s everyday needs, they’re doing well.”

Buyer Taylor Gerhardt said he had a vision for the future renovations at Shoppes of Kissimmee. He plans to start by refreshing the parking lot, lighting and landscaping, followed by facade improvements, as shown in the conceptual rendering.
Buyer Taylor Gerhardt said he had a vision for the future renovations at Shoppes of Kissimmee. He plans to start by refreshing the parking lot, lighting and landscaping, followed by facade improvements, as shown in the conceptual rendering. (D.Z.A. Associates)

The Shoppes at Kissimmee was built in 1988. The 74,520-square-foot shopping center is anchored by Bealls Outlet, Ross Dress for Less and Dollar Tree. The center was 96% leased at the time of the sale, with just two 1,600-square-foot spaces available for lease.

Gerhardt said he has decades of experience managing shopping centers all over Florida. “That’s what led me to Kissimmee,” he said. He plans to make immediate improvements to the parking lot, lighting and landscaping, followed by facade improvements in the third quarter.

“We were looking at this property back in the fall,” he said. “I don’t pursue anything I don’t have an immediate vision for. If you sit in the parking lot for a few hours, the traffic is unbelievable. It just needs a little imagination.”

The seller, an affiliate of IMC Equity Group, was represented by the Milano-Glickman Retail Investment Team at Colliers International, led by Sean Glickman, Chris Smith and Brandon Rapone.

Glickman said he has a decade-long relationship with the seller. The team had the Kissimmee listing for over a year and quickly brought it under contract in early 2020 at close to full asking price.

The seller netted a $5 million profit in just three years on the shopping center it bought before the Tupperware SunRail station opened.

“But then COVID hit and the buyer bailed out,” he said. “So we just relaunched it. We lost a tenant in the process, but we reduced the price accordingly, and after the relaunch we immediately put it under contract again. We got the maximum value we could have reached, even though it was during COVID, and everybody is thrilled with the transaction — the seller and the buyer.”

Glickman said this was the first post-COVID deal his team closed, but he already sees business picking up in 2021. “In the last couple of months, we’ve seen a huge uptick since the election. We’ll see a lot of buyers coming back — everybody realized the world is not coming to an end,” he said.

The Kissimmee property brought multiple offers. “The interest rates are very, very low, so everybody wants to lock in a good loans, good properties, and they realize it’s not going to get much worse from here, so it’s time to jump back in the water. So everybody did, and we have a lot more buyers than we have sellers, and we’re getting top notch pricing on almost everything.”

Gerhardt said his firm has access to capital and is still in the market for another three or four deals in Central and North Florida in the $2 million to $20 million range. Frost Point Capital is looking to buy grocery-anchored neighborhood centers, discount centers or non-anchored multi-tenant centers with minimum occupancy of 75%.

Have a tip about Central Florida development? Contact me at lkinsler@GrowthSpotter.com or (407) 420-6261, or tweet me at @byLauraKinsler. Follow GrowthSpotter on FacebookTwitter and LinkedIn.

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