Q2 2012 Atlanta, Georgia Retail Property Sales Analysis

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Q2 2012 Atlanta, Georgia Retail Property Sales Analysis

Metro Volume and Pricing

Strong activity in the middle quarters of 2011 was followed by a slowdown.* The 16 transactions meeting Reis’ criteria that closed through the first half of 2012 fetched a combined total of only $73.2 million, less than one-sixth of the dollar volume counted for all of 2011. The average selling price was $140 psf, a near repeat of the 2011 average. The total for second quarter alone for eight deals was $30.6 million at a mean selling price of $182 psf. In the quarter’s largest sale, LACSVGA LLC paid Academy Ltd. $8 million ($141 psf) for the 56,604-square-foot Academy Sports + Outdoors 100.0%-occupied freestanding building in Snellville. The sale closed in April at a 7.6% cap rate.

Top Submarkets

Among metro area submarkets, Sandy Springs/North Fulton led in property volume sold over the last four quarters at 804,255 square feet. The dollar volume was $125 million. In second place were the 530,066 square feet exchanged for a total of just $23 million in Forest Park/Clayton. Among submarkets with substantial sales volumes, the 390,366 square feet that sold during the period for $82 million in Northeast/East Atlanta earned the highest average price at $209 psf.

Cap Rate Comparisons and Forecasts

Measured by the quarter and reflecting the low sales numbers, average cap rates have been somewhat erratic, ranging from 6.1% to 12.2% since first quarter 2010. The average for the latest quarter’s eight deals was 10.7%, up from first quarter’s 7.7%. The 12-month rolling cap rate has been a somewhat more reliable trend indicator. That rate ended the latest quarter at 8.3%, up from 7.3% and 7.0% a quarter and four quarters earlier. Second quarter 12-month rolling caps for retail investment transactions in the South Atlantic region and the U.S. as a whole were 8.2% and 7.8%, up and down from 8.1% and 7.9% a quarter earlier.