7-Eleven purchased two local convenience stores last quarter, nearly doubling dollar volume of sales in the commercial retail segment.
As far as my kids were concerned, the big news in Frederick’s commercial retail segment last quarter was Sonic purchasing a 1-acre retail pad near Walmart on Guilford Drive for $790,000 and opening the county’s first Sonic restaurant. We have yet to try it because the line at the drive-through always seems to be wrapped around the building at lunch time on the weekends. Now that school is out, maybe we’ll have our chance.
Frederick’s retail segment was a mixed bag of results during the first quarter. Fewer square feet of retail space sold, but at a much higher dollar volume. The doubling of dollar volume sales was due to 7-Eleven Inc. purchasing two local convenience stores in Libertytown and Thurmont for $1,220,639 ($541.30/SF) and $1,245,808 ($562.70/SF), respectively. Convenience stores (particularly those with gas stations) tend to sell at a generous price per square foot, so these two purchases also bumped up the median price per square foot for the entire segment last quarter as compared to the first quarter of 2013.
Frederick’s retail leasing market had a lackluster first quarter in terms of the number of transactions and square footage leased, much like the same time period last year, and not unexpected given the first quarter contraction of the economy:
The good news in local retail leasing is that vacancy rates are holding below 5% on average. New retail pads near Wegmans and Francis Scott Key Mall have leased up fairly quickly, at rates between $30-35 per square foot before expenses. Prime retail spaces in the heart of Frederick’s downtown historic district are hard to come by, and if the past few lease deals are any indication, average retail lease rates in that area are creeping up into the mid teens to high teens per square foot, before expenses.
Note: Statistics provided for commercial property sales in this report are based on thorough research of every recorded commercial sales transaction listed in SDAT for the first quarter of 2014, and are deemed reliable. Lease transactions are not recorded with Frederick county government. Lease rates for this report were researched in CoStar. Lease rates, if reported at all, are usually estimated. Median lease rate calculations for the quarter are based upon available estimates and are meant to be used as a baseline trend versus hard data.
The author: Kathy Krach is a commercial sales and leasing agent with MacRo.