GlobeSt.com EXCLUSIVE: Merritt Island's Victoria Square Sold

MERRITT ISLAND-Shoppes of Victoria Square, a 14-year-old, 110,547-sf retail and office complex 60 miles southeast of Downtown Orlando is under new ownership today.

Victoria Square Partner LLC bought the 100%-leased property at 1450 N. Courtenay Parkway from Equity Investment Group Merritt Island LP for $5.98 million, or about $54.04 per sf. The deal took seven months to close due to environmental issues that had to be resolved on the 13.58-acre tract, Jim Michalak, a senior director in the Tampa office of Cushman & Wakefield of Florida Inc., tells GlobeSt.com.

“There was a nominal amount of dry cleaner contamination and we had to go through the process of getting insurance,” Michalak explains. “Each party had to hire their respective engineering firms, so the process was time consuming.”

“You would be shocked at the percentage of shopping centers, particularly those that are 10 years or older, that have contamination. I deal with this topic on a good portion of my sales,” he adds.

And sales this year for the senior C&W broker have been “very good,” he tells GlobeSt.com. He has completed five shopping center deals with an aggregate value of $50.23 million, totaling more than 600,000 sf. He has eight other centers under contract for $102.55 million, totaling more than 850,000 sf. The eight properties are scheduled to close by the end of October.

“Demand for anchored shopping centers continues to outpace supply,” Michalak says. “However, with the recent increase in interest rates, investors’ yields have been reduced.” He anticipates capitalization rates to “rise slightly and values to descend over the course of the next 12 months.”

Victoria Square is anchored by Walgreens and a Winn-Dixie supermarket. Michalak and colleague Patrick Berman negotiated for the seller.