By JACK WEATHERLY
Birmingham-based Bayer Properties LLC, which, along with Wicker Park Capital Management of Savannah, recently bought Colony Crossing in Madison for $14.3 million, has no immediate plans for the 77,427-square-foot shopping center.
Given Bayer’s portfolio, there’s nothing to worry about. That plus a conversation with the developer indicates that, if anything, there will be upgrades in the future.
Bayer’s Jackson Ratliff said in an interview that it would be looking to bring in regional and/or national tenants as leases expire.
The investor can command higher prices from such tenants, according to Jim Turner, a director at Integra Realty Resources in Ridgeland.
Colony Crossing tenants currently include Georgia Blue, Massage Envy, Pizza Inn and Nagoya Japanese Restaurant, among others. Its “shadow anchors,” meaning they are close but not actually part of the property, are The Home Depot, Kroger and a Hilton Garden Inn.
Bayer and Wicker Park are buying into Madison as much as they are buying the shopping center.
“It’s a little competition for the local developers,” Turner said.
Another competitive move by Bayer is Madison at Town Square. The development – a new city hall and fire station, condominiums, retail and office space, a grocery – was announced by Mayor Mary Hawkins Butler in April, according to the Madison County Journal.
Calls to the mayor and Bayer this week to ascertain the status of the plan were not returned by press time.
It’s an oft-repeated truth that Madison is modeled after the upscale Germantown, Tenn., a Memphis satellite.
In fact, Bayer and Wicker Capital, closed out a similar deal in Germantown two years ago. Germantown Collection, a 55,373-square-foot center, was purchased for $13.1 million, or $237 per square foot compared with $184 per square foor for Colonial Crossing.
Turner said that it would not be fair to say that the two deals reflect the comparative commercial property values of the two towns. The centers may be of similar size, but tenant mix, for one thing, can make a significant difference in the market value of the property.
Turner said there was an oversupply of commercial property when Colony Crossing was opened in 2005, at a time when tax-free Gulf Opportunity Bonds, or GO Bonds, designed to provide capital for rebuilding in the wake of Hurricane Katrina, were still available.
Consequently, the commercial property market was oversupplied and tenants could negotiate much cheaper rent, he said.
That excess space would’ve been absorbed had it not been for the national recession that descended in 2008, Turner said.
Bayer’s Ratliff said that Colony Crossing was 94 percent occupied at the time of the purchase from Ergon Inc., a Jackson-based company whose operations include oil refining and marketing, asphalt and emulsions production, transportation and real estate.
Bayer is currently engaged in a $66 million redevelopment in downtown Birmingham.
Bayer’s flagship is The Summit in Birmingham, a 981,714-square-foot mall.
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