Prudent Growth Partners has acquired Somerset Shoppes, a 27,250-square-foot neighborhood retail center in Montgomery, Alabama, for $3.7 million. The acquisition expands the Chapel Hill, North Carolina-based private equity real estate firm’s portfolio of neighborhood retail properties and provides opportunities for additional value creation through leasing and rent growth.
Built in 2003, Somerset Shoppes is currently approximately 85% leased to nine tenants across dining, fitness, personal care, wellness, insurance, and other service-oriented categories.
Tenants include Martha’s Place, Latitudes Salon & Spa, Body Serene Nails & Spa, J&T Acupressure, and Southern Muscle & Fitness.
The service-heavy tenant mix provides recurring neighborhood traffic and reduces reliance on discretionary destination shopping.
The property is located along Atlanta Highway, one of Montgomery’s principal retail corridors, and receives visibility from approximately 22,436 vehicles per day.
Its surrounding retail area includes national chains such as Walmart, Aldi, and Dollar Tree.
Somerset Shoppes also serves the East Montgomery area, where more than 80,000 residents live within five miles of the center and average household incomes exceed $100,000.
Prudent Growth sees those demographics, combined with the property’s existing tenant base and location, as supporting long-term demand.
The firm also sees clear opportunities to increase income from the property.
Two vacant end-cap spaces totaling approximately 4,000 square feet provide potential leasing upside.
Prudent Growth additionally plans to pursue contractual rental increases and opportunities to move existing rents closer to current market levels.
Those initiatives could increase occupancy and net operating income while maintaining the cash flow provided by the existing tenant base.
Montgomery’s broader economy is supported by major employers including Maxwell-Gunter Air Force Base, Hyundai Motor Manufacturing Alabama, Baptist Health, and state government agencies.
The Montgomery metropolitan area generates more than $24 billion in GDP.
Prudent Growth specializes in commercial real estate that may receive less attention from larger institutional investors but provides opportunities to create value through active leasing, operations, and property management.
KEY QUOTES:
“Somerset Shoppes fits squarely within Prudent Growth’s strategy of acquiring well-located neighborhood retail properties with strong underlying fundamentals and identifiable opportunities for growth.”
“The property’s location within one of Montgomery’s strongest residential and retail submarkets, combined with its service-oriented tenant mix and leasing upside, creates an attractive opportunity to enhance long-term value through active management.”
Tom Hahn, President and CEO of Prudent Growth Partners
