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InvenTrust Bags Kennesaw Marketplace for $64.3 Million

Chicagoland Investor Adds Whole Foods-Anchored Center to Portfolio
June 6, 2018
InvenTrust Properties Corp., an Illinois investor that focuses on acquiring grocery-anchored retail centers in growth markets, just added the Kennesaw Marketplace in Kennesaw, GA, to its portfolio, acquiring the center for $64.3 million, or approximately $566 per square foot, in a deal with Fuqua Development.

The 114,000-square-foot center at Barrett and Cobb parkways in suburban Cobb County is anchored by a Whole Foods grocery. Kennesaw Marketplace, built by Fuqua Development, represents the first Whole Foods-anchored center in the Atlanta market. InvenTrust also owns four Publix and four Kroger outlets in the metropolitan area.

Companies such as InvenTrust and its Atlanta-based rival New Market Properties, a subsidiary of Preferred Apartment Communities, continue to crave grocery-anchored centers. In April, New Market acquired two Publix-anchored centers, Governors Towne Square, also in Cobb County, and Greensboro Village in the Nashville suburb of Gallatin, TN.

But the lack of grocery-anchored centers for sale, combined with the fact new grocery openings fell 28.8 percent from 2016, could make it hard for sales of grocery-anchored centers to sell at a similar clip this year.

In 2017, investment in centers anchored by a grocery store increased 5.3 percent, while investments in other retail centers such as malls saw little or no growth, according to JLL's 2018 Grocery Tracker report.

"Grocery-anchored centers remain a safe bet for investors as overall transaction volumes for retail have been down," the report states. CoStar Research says demand for neighborhood centers typically anchored by grocers are especially healthy when compared with so-called shopping mall power centers.

InvenTrust said acquiring a center anchored by Amazon's Whole Foods provides an added bonus.

"This transaction advances InvenTrust's strategy, providing grocer diversification within the company's Atlanta portfolio," said Michael Podboy, an InvenTrust executive vice president who also serves as its chief financial officer and chief investment officer. ""Developed in 2017, the Marketplace requires minimal capital investment while providing significant upside for InvenTrust due to Whole Foods' extended drawing power and the region's favorable demographics."

In addition to Whole Foods, Kennesaw Marketplace tenants include Starbucks, MOD Pizza and PNC Bank. It is 99 percent leased, according to CoStar research.

For more information on this transaction, please see CoStar COMP #4281741.

Tony Wilbert, Atlanta Market Reporter  CoStar Group   
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