Brick-and-mortar retail has felt the effects of e-commerce growth, but a sprawling shopping plaza in affluent Wellington appears immune.
The Shoppes at Isla Verde traded for $73.8 million and secured a new tenant, organic food-focused Sprouts Farmers Market, to fill the space left by a shuttered Sports Authority store to take it to 94 percent occupancy. The sale price breaks down to $356 per square foot.
MetLife Investment Management, New York-based MetLife Inc.’s institutional investment manager, bought the 207,030-square-foot plaza at 1020 S. State Road 7 from family-owned Pebb Enterprises and developer Pebb Capital on Nov. 16.
“You put things like the right tenant mix with the right tenants at the right location, and you are still going to have a long-term successful shopping center,” said Todd Rosenberg, Pebb Capital co-founder in Boca Raton.
With organic and healthy options increasingly sought by consumers, this is expected to be the first Sprouts Farmers Market location in Palm Beach County.
Other tenants include Ulta, Old Navy, Petco, Total Wine, Anthony’s Coal Fired Pizza, Chipotle, Verizon Wireless, HSBC, Panda Express, CVS and Best Buy.
Best Buy is “a great example of figuring out how to work hand-in-hand with mobile and still have extremely successful stores. It’s just what I consider to be a retailer who has figured it out,” Rosenberg said.
Fellow tenants also are strong, said Ian Weiner, president and CEO of Pebb Enterprises.
“We recently renewed some of these tenants. They have very healthy rents and are still performing well there,” he said.
The plaza was one of few remaining assets jointly owned by Pebb Enterprises and Pebb Capital. They are separate companies with different business strategies but grew from the same roots.
In 1972, the Rosenberg and Weiner families — Todd Rosenberg’s father Jeff, Ian Weiner’s father Bruce, and Paul Weiner — started Pebb Enteprises. Todd Rosenberg and Ian Weiner joined in the early 2000s.
Pebb Capital was spun off in 2014 and is led by Jeff and Todd Rosenberg and Ian Horowitz, Todd Rosenberg’s brother-in-law.
“The reason we split is because we wanted to diversify by asset class as well as geographically. We changed our model pretty drastically in order to accomplish that by partnering with operators in other asset classes as well as other geographies so we can further diversify our investments,” Todd Rosenberg said.
Pebb Capital, with 20 properties valued at $1 billion, is focusing on multifamily, student housing, hotels and lifestyle grocery-anchored retail. The company has expanded beyond South Florida to New York, Kansas and Georgia and is eyeing the U.K., he said.
“We are building a lot of what I would call millennial apartments near university and hospital systems where we can either provide student housing or more urban housing opportunities,” Rosenberg said. He noted Pebb Capital is considering investing some of its Wellington gains in an opportunity zone.
Pebb Enterprises traditionally focused on South Florida retail and office property and plans to use some of its gains for other regional investments, according to its website and a news release.
Pebb Enterprises is retrofitting Sports Authority’s old space for Sprouts and will manage and lease the property on behalf of MetLife.
The Shoppes at Isla Verde was developed jointly by Jeff Rosenberg and Bruce Weiner, who in 1998 began assembling 22 acres in four parcels for the shopping center.
“We had a good run with a great asset, and we felt that at this time it made sense for us to sell the asset to a very good buyer,” Todd Rosenberg said. “Ultimately, those proceeds will be allocated to each of our respective companies to continue building out our respective strategies.”
The Shoppes at Isla Verde is proof that things change in retail.
“When we put the Sports Authority in, we figured they were the powerhouse never going anywhere. Before you know it, the world changes on you,” Todd Rosenberg said. “This type of market is difficult as an investor to really pinpoint who is going to survive and why.”