Prudential Grabs Mixed-Use Center in Naples, Fla.
- May 12, 2015
Prudential Real Estate Investors has acquired the retail and office portion of Mercato, a mixed-use retail lifestyle center in Naples, Fla., from an ownership group consisting of Barron Collier Cos., the Lutgert Cos., and Madison Marquette, for a reported $240 million.
Completed in 2009, the Mercato consists of 13-buildings on 53 acres and consists of 321,000 square feet of retail space, 135,000 square feet of Class A office space and 92 separately owned residential condominiums.
“The prominent location, on-site amenities and high-quality tenant base in a market with a favorable economic outlook and strong demographics made Mercato an ideal income-producing investment to add to our clients’ portfolio,” Kevin Smith, head of Americas for PREI, said in a company statement. “We look forward to creating additional value at Mercato for the benefit of existing and prospective tenants, the Naples community and our clients.”
The project was designed by Angelo Carusi and constructed by Hoar Construction and was recognized by the The International Council of Shopping Centers in its annual design and development competition.
The center is close by multiple locations throughout Southwest Florida, including several luxury hotels, resorts and golfing communities.
Mercato’s retail portion is anchored by Whole Foods Markets, Nordstrom Rack, and a 12-screen cinema and features upscale dining options such as The Capital Grille and McCormick & Schmick’s. The office portion includes national tenants Wells Fargo, Bank of America, and Merrill Lynch, as well as regional law and financial services firms.
According to Florida Commercial Advisors’ 2015 Commercial Real Estate Forecast, Southwest Florida and Naples in particular has a certain cache that has fueled much investor demand.
The report shows that demand out-paced supply of income properties last year and is expected to see higher demand in 2015, with cap rates in Naples generally being at least 100 basis points lower than other comparable sized markets.
As for the Class A office market, the report shows Naples will reach a full level of occupancy (95 percent) in 2016, with rental rates already within 10 percent of the last market top. The retail segment, meanwhile, has seen occupancy rates rebounding into full capacity territory with rental rates hitting pre-recession levels. As it typically does, retail outperformed office in economic recoveries last year.
Madison Marquette will serve as property manager and leasing broker for the retail and office space.