Miami-basedOrion Real Estate Grouppaid $3.6 million on Wednesday to expand its commercial footprint in Orlando, buying a triple-net restaurant property on N. International Drive.
Located at 6877 S. Kirkman Road, on the northeast corner of the intersection with I-Drive, the Sweet Tomatoes-leased outparcel is considered the best performing retailer within the larger "International Festival" shopping center that dominates that corner, where much of the space is vacant.
"We love Orlando as an investment area," Senior Vice President Norman Buhrmaster told GrowthSpotter. "This was an attractive transaction because obviously we like the I-Drive location ... and we've owned a Sweet Tomatoes property up in Atlanta in the past."
The property comes with a corporate guarantee from Sweet Tomatoes' parent company, and eight years remaining on a lease with two 10-year options to follow.
The location stands to benefit from new I-4 Ultimate ramps at Kirkman Road and Grand National Drive, and Universal Orlando's two Endless Summer hotels under construction roughly a quarter mile to the west.
The seller was TRJ Orlando, LLC, an investment vehicle for California-based investor Terrance Johnson, who previously paid $4.17 million for the property in 2004 through a family trust.
Garden Fresh Restaurant Corp. built the Sweet Tomatoes there in 1999, then sold the asset in early 2004 to a fund managed by CNL.
John Krzyminski, managing director for the retail team at Cite Partners, served as listing agent. He approached the former owner with buyers in mind, earned the listing and had Orion in negotiations within the first week.
"It was a quick 30 days of due diligence and 15-day close, no issues arose," Krzyminski said. "The seller, who is out of California, is not expected to reinvest the proceeds in (real estate). I think he's going to enjoy retirement."
The buyer sourced a $2.2 million mortgage from First National Bank of South Miami to help close the deal.
This is Orion's second retail asset buy in or near Orlando's tourism corridor in the past four months. The company paid $9.6 million in early February for the ground-floor retail segment of a prominent apartment building in Dr. Phillips.
Orion owns and/or manages more than 300 properties across the United States, of which seven are in Greater Orlando.
The company's most recent repositioning project in Orlando was a closed Winn Dixie building and property it bought in mid-2016. It demolished the store, subdivided the 2.34 acres into three parcels, and brought in O'Reilly Auto Parts, Wawa and Crunch Fitness for lot sales or leases last year.
Orion is actively pursuing more in this market in 2018, Buhrmaster said. Orion favors value-add, multi-tenant retail and office properties where it can increase occupancy, or position raw land through permitting for new development. It has also bought large portfolios in the past year of single-tenant, NNN-leased retail assets in the southeast.