In one of the biggest retail property purchases in Chattanooga history, an Atlanta real estate firm has acquired the Overlook at Hamilton Place for $33.8 million - nearly twice the $17.1 million tax appraisal for the 213,095-square-foot shopping center on Gunbarrel Road.
New Market Properties LLC, a subsidiary of the Preferred Apartment Communities Inc., bought the 22-year-old complex in East Brainerd last week from another major real estate investment firm, the Beachwood, Ohio-based DDR Corp., which owned and upgraded the facility over the past 12 years.
The center near Hamilton Place - one of Tennessee's biggest shopping malls - is anchored by Fresh Market, Hobby Lobby, Best Buy and Petco.
The center is currently 99 percent leased.
The Overlook at Hamilton Place, a shopping center built in 1993 near Hamilton Place Mall on Gunbarrel, has been sold."We are very pleased to add this well-located grocery-anchored shopping center to our growing portfolio," said Joel T. Murphy, president and chief executive New Market Properties.
Hamilton County Assessor Bill Bennett said the current appraisal by the county on the property was done in 2013 when the facility was not as leased and the retail market was not nearly as favorable.
"We're seeing commercial property appreciate in value, especially in strong retail areas like around Hamilton Place Mall," Bennett said.
Four years ago, the owner of Hamilton Place Mall - CBL & Associates Properties - acquired the then struggling Northgate Mall for $11.5 million. Even though Northgate and its surrounding properties had nearly four times more space than Overlook at Hamilton Place, the Hixson mall sold for only a third of what Overlook fetched, due to its higher vacancy, lower sales per foot and less favorable location, experts said.
"The Overlook is located at the prime retail center in Chattanooga," said Henry Glascock, a Chattanooga real estate appraiser for John Dixon and Associates. "Power centers like this also are in favor now and are bringing higher prices."
Located on nearly 20 acres at 2288 Gunbarrel Road, the Overlook shopping center is located at the intersection of Gunbarrel Road and Shallowford Road.
Murphy said the purchase "is consistent with our strategy to acquire well positioned grocery-anchored shopping centers in Sunbelt markets."
The acquisition is being financed utilizing a 10-year, 4.19 percent first mortgage loan from Transamerica Life Insurance Company.
Contact Dave Flessner at dflessner@timesfreepres.com or 757-6340