Chattanooga's first suburban shopping center has a new owner.
A Fayetteville, Arkansas-based real estate investment firm has acquired the 64-year-old Highland Plaza shopping center at Hixson Pike and Ashland Terrace as national investment groups continue to buy into the Chattanooga market.
The Fletcher Bright Co., which has owned and managed the Hixson shopping center since 1994, sold the 129,000-square-foot retail center last month for nearly $8.9 million, or nearly $69 per square foot.
The shopping center is anchored by a Walmart Neighborhood Center, which was previously sold by Fletcher Bright, and includes a Big Lots, Dollar Tree, Tuesday Morning and Farmer's Furniture along with a CHI Memorial medical clinic.
A real estate partnership created by Core Equity in Fayetteville bought the shopping center with an investment partnership that is known as Core Highland Plaza LLC to expand into what company officials see as a growing Chattanooga retail market.
"Chattanooga is a secondary market we have had on our radar for a while," Drew Angel, the managing partner at Core Equity Partners, said in an announcement of the property purchase. "We are thrilled to add this to our portfolio."
The Fletcher Bright Co. helped upgrade and fill most of the retail complex, which had a number of vacancies after the original tenants moved out. In 2015, a Walmart Neighborhood Market opened in an old Food Lion location. Then, two years ago, Farmers Home Furniture, one of the South's fastest growing retailers, opened a 27,000-square-foot store in Highland Plaza.
George Bright, president of Fletcher Bright Co., said it is an opportune time to sell with many outside investors interested in buying into Chattanooga and property values increasing.
"The market for commercial real estate right now is extraordinarily strong, and if you don't sell when the market is strong, when are you going to sell?" Bright said in a telephone interview Monday. "We've been able to attract some strong tenants and fill up Highland Plaza, so that also makes it an attractive property."
The original tenants of Highland Plaza when it opened in 1958 included Miller Brothers department store, J.C. Penney (which moved to Northgate Mall in 1972), Woolworth's, W.T. Grant Co., Miles Shoes, Gordon's Jewelers, Miller Jones Shoes and Kroger, according to Sam Hall, a local history buff who curates the ChattanoogaHistory.com website.
"Highland Plaza is one of those shopping centers that has been viable since the 1960s," Angel said. "Its staying power is a testament to the fundamentals and position within the market."
Highland Plaza is the third Chattanooga suburban shopping center sold this summer to investment groups eager to buy into more secondary retail markets like Chattanooga in the South.
In June, Fletcher Bright Co. also sold a Lookout Valley shopping center for $7 million to an international investment company, Alea Properties, which manages office, medical office, retail and industrial properties in a half dozen U.S. states and has foreign holdings in Australia and Africa. That center included nearly 10 acres and 49,000-square-foot of retail spaces near the Walmart superstore on Cummings Highway in Chattanooga.
Also in June, Chattanooga developer Bassam Issa sold the Issa Crossing shopping center on Highway 153 to an Ontario, Canada-based investment group for $10.75 million. The 117,000-square-foot retail center is home to a Gabe's discount store, Ollie's Bargain Outlet and Barton's Home Outlet. Issa had developed the retail center after buying a shuttered K-Mart store, which closed in 2016.