The owner of a self-storage business in New York has spent $7.7 million on a recently-built strip center in Lake Mary that local builders say sets a new bar for the value of retail development in that affluent city.
Stephen DiSalvo reinvested proceeds from the sale of one of his storage facilities to buy a 1.2-acre-parcel fronting Lake Mary Boulevard (on 850 S. Sun Dr.) that contains a Starbucks, a Verizonand a Noodles & Co., about a mile east of Interstate 4 in the heart of the city's busy retail corridor.
The stores total 7,725 square feet, meaning DiSalvo spend $1,000 a square foot for the strip center. He said the Cap rate on the purchase was 5.25 percent.
"This sets a new standard for Lake Mary" in terms of retail pricing, land consultant Ron Semans told GrowthSpotter.
DiSalvo said he was comfortable with the price because the purchase was structured to fulfill a 1031 exchange, and with the tax savings and limited time involved to buy another property it was a worthwhile move.
Plus, "I could not find anything I liked better," he said.
The land was bought from an affiliate of Andrew Hupp, head of Hupp Realty, which developed the site last year, and Justin Basil, owner of Tampa-based Mosh Posh, a high-end consignment shop for women, property records show.
The Hupp-Basil affiliate paid $2.5 million for the site in early 2015, when it had a Chevron gas station on it, land records show.
The parcel appealed to DiSalvo because of Lake Mary's affluent population and the many businesses that call it home. "This was a money preservation move," because of its residents' existing incomes and the growing income the area is seeing, DiSalvo said.
Plus, Florida in general had tremendous appeal because of its lack of state income tax, he added.
When it comes to the price DiSalvo paid, local building consultants say it was driven by the stores' location in a well-trafficked part of Lake Mary, their strong retail reputations and the area's demographics.
Also, this is new construction, with the Verizon and Noodles & Co. opening in December, and Starbucks in January.
All three stores are already the strongest or close to the strongest performers among their franchises in Florida, said a New York-based retail consultant who requested anonymity, because of confidentiality agreements with the chains.
DiSalvo still owns another self-storage facility in New York and said he currently has no plans to dispose of it right now.
DiSalvo lives in Ormond Beach, about an hour from the center, and is acting as manager of the property. He's taking a very hands-on approach, spending most of his time at the site since the sale closed a couple of weeks ago. He even bought a broom and a sweeper to keep it looking its best.
The property has not changed hands very much over the last half century. It was owned by land baron and businessman Jeno Paulucci until the early 1990s.