Shopping centers are changing hands, investors are in South Mississippi looking for deals and the owners of White Pillars restaurant are “in active negotiations with a chef/owner” to operate the Biloxi landmark.
Area commercial real estate agents say South Mississippi’s favorable capitalization rates — or more for the money — is what’s behind the commercial boom. Prices are on the rise in Baton Rouge, New Orleans and other areas, the real estate agents say, and investors are selling high there and putting their money into lower priced properties on the Coast.
The Shoppes at Beauvoir — which houses Firehouse Subs, AT&T and the UPS Store — is the latest shopping center in South Mississippi to be sold as the commercial real estate market continues to attract investors seeking more for their money.
The 6,300-square-foot strip shopping center sold for $1.85 million to an undisclosed Louisiana investment company represented by Christopher Dozier of Retail Specialists.
The former Blockbuster video store at the corner of Beauvoir and Pass roads was redeveloped in 2013.
“This redevelopment project was the vision of Doug Molyneaux, who actively negotiated the acquisition contract, negotiated the tenant leases and lease extensions and led the marketing effort in the sale,” said co-owner and developer Brooks Holstein of COMVEST Properties.
A loan with Community Bank Coast allowed the owners to update the exterior, which helped attract a mix of national franchise tenants.
COMVEST also is marketing White Pillars with a virtual tour to find a chef who wants to bring back the elegant dining for which the restaurant was known. The company also produced with The Focus Group a video giving potential investors an overview of the area’s casinos, restaurants, attractions, events and potential.
“People are knocking on the door, depending on the type of property it is,” said Brian Bolis, an agent at NAI Sawyer in Gulfport.
He recently sold the land south of the Markham Hotel in downtown Gulfport to the investors who bought the hotel, which has been empty for 11 years since Hurricane Katrina.
Multi-family housing is hot, he said: “There’s a lot of demand for it but not too much available supply for sale.” Single-tenant rental homes also are in demand, he said. But he noted South Mississippi still has a big vacancy rate in the small-office market, and land isn’t selling well.
“We’ve got just an abundant supply of it,” he said of empty land.
In the “gateway markets” such as New York, Boston, Los Angeles and Seattle, the demand and prices are just unbelievable, he said. An office building just sold in Manhattan for $1,700 per square foot.
In South Mississippi, the rate generally is between $50 and $100 a square foot.
Kenneth Jones, a commercial real estate agent for Coldwell Banker Alfonso Real Estate in Gulfport, recently sold the Elliott Homes office in Gulfport to an investor. He also has a strip shopping center on Courthouse Road in Gulfport under contract to another developer.
“The investment side of it is going crazy,” he said. He’s closing soon on the sale on a commercial property on Pass Road in Gulfport. The owner was trying to lease the building and Jones said, “Somebody came along and wanted to purchase it.”
While smaller investors are tired of earning little return on their bonds and CDs, he said, and are a little tentative about the stock market, “people do think the economy’s better. They’re willing to go out there and take a little more risk.”
Monte Luffey, a principal at Southeast Commercial in Gulfport, announced in the spring his company facilitated the sale of Edgewater Village Shopping Center in Biloxi and was awarded the exclusive management and leasing contract by the new owner.
This week, he said the Tuesday Morning retail store at Hardy Court in Gulfport will be moving to Edgewater Village and his company is working to get more stores to move to the location at U.S. 90 and Eisenhower Drive.
Southeast Commercial also has a joint development agreement with the owners of land immediately west of The Promenade in D’Iberville.
“We have got a tremendous amount of interest from national and regional restaurants and retailers,” Luffey said. They haven’t yet named the shopping center that will be built on 7 acres south and 17 acres north of Promenade Parkway.
Construction of a Mugshots restaurant has begun on the south side and Luffey said, “We’re in discussions on the north side with several different groups.”
“Most of the national retailers these days have brokers,” he said, and his company works with them to find a site.
To keep growing the market, South Mississippi needs more homeowners and a diversified economy.
“Retail follows residential,” he said, and to bring people in, the Coast needs more industry. “We can’t rely just on tourism.”