CenterSquare Investment Management, a real estate investment firm headquartered in Philadelphia, paid $15.2 million for the Park Lane Place dining hub on International Parkway at Heathrow Lane in Lake Mary, according to a deed signed Feb. 15 and recorded last Tuesday in Seminole County.
The seller was 1101 Heathrow Investments LLC, an affiliate of Pelloni Development Corp., which built the three-building, 23,287-square-foot retail center.
Construction of Park Lane Place was completed last year and only one vacancy remains. Tenants include food and drink outlets Chicken Salad Snack, 1000 Degree Neapolitan Pizza, Nothing Bundt Cakes, Tutto Caffe, Poke Joint and Orange County Brewers.
The center, located in Lake Mary's prosperous Heathrow district, fits CenterSquare's strategy of buying retail centers in high-income, high-employment areas. The company also likes a tenant base which provides more experiences than retail goods, said Rob Holuba, the company's vice president of acquisitions.
"People are spending more on experiences than they are on things: going out to lunch or dinner, having a drink after work," Holuba said. "So, these centers are in line with changing consumer patterns."
Another advantage for investors in these types of commercial centers is they tend to be "internet proof," Holuba added.
"If you look at our tenant lineup, they provide goods and services that you can't get online," he said. "Restaurants, real estate brokers, nail salons -- you can't do any of that stuff online."
Another strength is Park Lane Place's close proximity to 3 million square feet of Class A office space, Holuba said. The center is adjacent to Verizon's 220,000-square-foot Finance Center and its 1,100 employees. The sale included an adjacent vacant lot that is being leased to Verizon for parking.
Deloitte Consulting, with about 1,000 employees, is just down the road at 901 International Parkway, and Central Parc at Heathrow, a mixed-use office and retail center, is also nearby.
"People could walk over to our center," Holuba said. "We anticipate strong morning and afternoon consumer traffic."
Pelloni Development executives came to the same conclusion when they first submitted plans for a retail/restaurant center at this location. At that time, Bart Pelloni said he had contemplated building a three-story office building at the 7-acre site. But when the Pellonis studied the surrounding area, they discovered retail space on the west side of Interstate 4 was nearly 100 percent occupied.
Bart Pelloni told GrowthSpotter on Monday his family's firm had not planned on selling Park Lane Place after building it and securing leases on almost all the spaces.
"Anything we set out to do, we usually tend to hold it," he said. "But it's dependent on what other deals we have pending.
"I think (the sale) was a fair deal," Pelloni added. "They (CenterSquare) are obviously a very large firm. They were all gentlemen. I could see us doing that again someday."
Sean Glickman of Colliers International brokered the transaction.
CenterSquare secured a mortgage for $9.3 million from TIAA Bank of Jacksonville. The firm has one other property in the area, the Heritage Estates apartment complex near the University of Central Florida.
"We're actively looking at new investment opportunities around all of the Orlando area," Holuba said.
CenterSquare is a global investment manager focused on actively managed real estate and infrastructure strategies. As of December 31, 2018, CenterSquare managed approximately $9 billion in assets on behalf of some of the world's most well-known institutional and private investors, according to the company website.