Will Interest Rates Push Cap Rates Upward? Are Prices Starting to Slip?


Interest rates, supply-demand drivers, and the economy will all play a key role in whether 2019 will be a year of growth or compression in retail properties. Experts believe that we are at a critical time in this market cycle. Utilizing this data will allow you to make the most out of your investments.


We have analyzed every shopping center transaction along Florida’s West Coast to better understand the market trends and how retail assets are positioned in 2019.

  • Investor appetite for retail investments remained strong in 2018, with transactional velocity that was slightly greater than 2017.

  • Cap rates have leveled out and prices have fallen slightly on a per square foot basis compared to 2017.

  • Buyers have continued to favor newer construction, paying a premium of almost $250 per square foot more for assets built after 2015 compared to those built prior to 2015.

  • Opportunistic investors have aggressively pursued value-add opportunities which remain scarce, causing the spread in price between value-add and stabilized assets to narrow.


Featured Transactions


Palms Plaza

South Tampa, FL

Price: $11,650,000

Cap Rate: 5.42%

Date Sold: 03/16/2018

PPF: $358


James Medefind of Medefind Retail represented the seller in the sale of Palms Plaza, a fully occupied shopping center in South Tampa. James Medefind and James Garner worked together with Cameron Barbas, an apartment specialist in Marcus & Millichap’s Tampa office, who brought a buyer that was looking to acquire a retail property to diversify his portfolio. The property ultimately sold for $358 per square foot, establishing a new record for stabilized shopping centers in the South Tampa submarket.


Baycare-Amscot

Saint Petersburg, FL

Price: $3,185,000

Cap Rate: 6.56%

Date Sold: 10/16/2018

PPF: $353


James Medefind represented the seller in the sale of Baycare-Amscot, a two-tenant retail property on 4th Street in St. Petersburg. James Garner represented the buyer who was in a 1031 Exchange and simultaneously purchased three other assets that were exclusively listed by Medefind Retail. The deal closed in less than 45 days at 96 percent of list price.



Serendipity Plaza

Clearwater, FL

Price: $5,450,000

Cap Rate: 7.65%

Date Sold: 07/18/2018

PPF: $153


Serendipity Plaza is a three-building shopping center with 900 feet of frontage on US-19, one of the busiest roadways in Pinellas County. James Garner and James Medefind represented the seller in the transaction. After extensively and thoroughly marketing the property and receiving multiple offers, James Garner and James Medefind cooperated with an outside broker who represented a group of international investors looking to invest in Florida real estate.

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