A joint venture sold a shopping plaza in Palm Beach County after completing its value-add strategy, which included a big bump in occupancy.
MMG Equity Partners, a Pinecrest-based commercial real estate investment company, and Global Fund Investments LLC, which focuses on retail asset investments in Florida and Texas, sold Whitworth Farms for $19.35 million to New York-based Juster Development Co. on Feb. 11, according to an MMG executive.
The 88,242-square-foot shopping plaza is at 12425 Hagen Ranch Road, an unincorporated area west of Boynton Beach and three miles from Florida’s Turnpike. It sold for $219 per square foot.
The retail industry has been evolving as some shoppers switch to e-commerce, in some cases skipping the supermarket visit and opting for grocery delivery services.
Whitworth Farms has survived and prospered despite growth in e-commerce in part by offering experiential retail, said Gabriel Navarro, managing partner at MMG.
The Publix-anchored plaza has restaurants, a dog groomer, gym, medical office and other businesses that offer services rather than goods that could be bought online.
“Whitworth Farms is a good example of a shopping center that is largely internet resistant,” Navarro said. “While there is a lot of press around grocery sales being done online through services like AmazonFresh and Whole Foods, the reality is that less than 5 percent of grocery sales originate online.
In the area around Whitworth Farms, where the population is a bit older, the online shopping rate is much smaller. Grocery-anchored shopping centers like Whitworth Farms, where many tenants are service oriented with fitness, medical, hair salon and restaurant options, will continue to do well in spite of the growth in e-commerce.
MMG Equity and Global Fund, led by managing partner Doron Valero, bought the shopping plaza through an affiliate in 2013 for $11.2 million in a lender short-sale.
The purchase included two outparcels, one of which was recently sold for $1.25 million to JPMorgan Chase. The second one was included in the recent sale.
Six years ago, the occupancy rate stood at 72 percent. The joint venture with Global Fund in charge of leasing and management increased that to 96 percent, Navarro said. Some of the tenants added are Dunkin’, Turbo Fitness, Falafel House and Woof Gang Bakery & Grooming.
“The partnership’s business plan at the time of acquiring the distressed asset was to sell the asset upon stabilization,” Navarro said. “We felt that the time was right to realize our gains.”