Despite the pandemic hit to many retail centers, a Hixson shopping center where Aldi recently completed a $1.5 million upgrade has been sold for $8 million to a New Jersey real estate company eager to expand in Tennessee.
First National Realty Partners, a Red Bank, New Jersey firm that owns and operates 28 other retail centers across the country, bought the Gadd Crossing earlier this month from another investment group, Keith Corp., in Charlotte, North Carolina.
Located at the corner of Highway 153 and Gadd Road, the 75,382-square-foot facility was originally built in 1989 and includes an Aldi grocery store, Gold’s Gym, Moe’s Southwest Grill, State Farm office and a half dozen other retail and restaurant tenants.
“Entering the Tennessee market has been a company goal of ours so we are very excited to be acquiring this landmark asset in the Chattanooga market,” said Matt Annibale, director of acquisitions for First National Realty Partners. “The center is well located in what we see as a growing market in Chattanooga and there is a strong lineup of internet-resistant, daily needs tenants, which is a key attribute of the center.”
According to city traffic counts, 43,779 vehicles a day, on average, drive past Gadd’s Crossing on Highway 153, which is only a mile north of Northgate Mall.
The COVID-19 pandemic helped spur more than 12,000 store closings last year – a record high – according to the commercial real estate firm CoStar Group. Vacancy rates have risen at many shopping centers as a result and the largest shopping center development company in Chattanooga, CBL & Associates Properties Inc., filed for bankruptcy last November.
But grocery-anchored strip centers have fared better due to shoppers boosting purchases from supermarkets in the past year as they eat more at home more and go to restaurants less frequently.
Knox Campbell, a partner with the Keith Corp., which previously owned Gadd Crossing, said the complex is currently 94% occupied with both Aldi and Gold’s Gym recently signing 10-year leases.
“Grocery-anchored strip centers are staying strong,” Campbell said.
Annibale said debt markets also have been loosening up this year as the pandemic eases, leading First National Realty to close on two grocery-anchored shopping center purchases so far in 2021 and putting under contract another five retail centers.
“We’ve been extraordinarily busy this year,” he said. “We like the Tennessee market and hope to do more deals there.”
Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.