Suburban Square sold to Kimco Realty

Suburban Square, the landmark shopping center in Ardmore, has been bought by Kimco Realty Corp., one of the country's largest real estate developers.

Kimco, of New Hyde Park, N.Y., yesterday confirmed its purchase of the 360,000-square-foot retail center, which has been offered for sale by owner DRA Advisors L.L.C, of New York, since last year.

Suburban Square, built in 1928, was among the nation's first shopping centers. Recently, it became a model for the trend of "lifestyle centers," or outdoor malls with sidewalks and open-air plazas.

Local retail brokers told GlobeSt.com, a real estate Web site, that the price paid for the property was about $210 million.

Edward Senenman, Kimco's director of acquisitions, would not confirm the price, and a call to a Kimco agent involved in the deal was not returned.

The shopping village, with 53 stores anchored by a Macy's, has long attracted national retail and office tenants and commanded the highest rents in the area because of the affluent neighborhoods surrounding it, real estate experts said.

"It is absolutely a trophy asset," said Timothy Mahoney, president of Mahoney Realty Group Inc., which manages office leasings at Suburban Square. "The demographics surrounding Suburban Square are certainly in the top 10 in the nation as far as the income levels."

Based on the reported selling price, the property fetched more than $500 a square foot. The surrounding retail area along Lancaster Avenue gets anywhere from $20 to $45 a square foot, Mahoney said. The median sale price for a multi-tenant retail property in the Philadelphia area is $140 a square foot, GlobeSt.com reported.

Experts in retail properties said yesterday that the deal also was noteworthy because of the low capitalization rate - or the rate of return Kimco expected to make in the short term on its investment.

The Suburban Square deal had a cap rate under 6 percent, said Brandon Famous, chief executive of Fameco Real Estate L.P., of Plymouth Meeting.

Average cap rates for retail-property sales in the Philadelphia area were 6.9 percent during the year ended March 31, down from about 8.8 percent four years ago, according to Real Capital Analytics, a New York company that tracks commercial real estate investment trends.

That rate reflects a bet in the long-term value of the property and the surrounding affluent area, said Steven Gartner, president of Metro Commercial Real Estate Inc., of Conshohocken.

Kimco, a real estate investment trust, operates shopping centers making up 175 million square feet in 45 states.

Kimco did not disclose its plans for the center. But local real estate experts predicted that Kimco's expertise in property development could signal a major shift in ownership philosophy. They said the new owner would not shy away from making changes among its retail tenants - including offering incentives to attract new stores, and having competing retailers at the center.

"Kimco's very savvy," Gartner said. "This is not a stagnant piece of real estate. There are opportunities here."

Built: 1928.

Renovated: 1978-1984; 2004.

Location: Anderson and Coulter Aves., Ardmore.

Stores: 53.

Anchor store: Macy's.

Other stores: Include Ardmore Farmers Market, Trader Joe's, Williams-Sonoma.

Size: 360,501 square feet.

SOURCES: GlobeSt.com, Suburban Square, Inquirer research

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