Market at Lakecreek
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Listing Highlights
- •203,071 SF multi-tenant community retail center
- •Priced at $211 per SF
- •Anchored by Fitness Connection and Goodwill
- •Below Replacement Cost
Philip Levy
Levy Retail Group
Investment Highlights
- 100% occupied multi-tenant community retail center with 203,071 SF
- Anchored by strong tenants including Fitness Connection, Goodwill, and O'Reilly Auto Parts
- Diverse tenant mix with 27 tenants providing stable cash flow
- Located at high-traffic intersection (134,964 vehicles per day) in affluent Austin suburb
- Strong demographics with average household income of $130,355 within 5-mile radius
- Below replacement cost pricing at $211 per square foot
Risk Factors
- Weighted average lease term of 4.24 years indicates moderate rollover exposure
- Minor deferred maintenance may require capital investment
- Several tenants received COVID-related rent concessions, indicating potential sensitivity to economic downturns
- Limited parking ratio could impact future leasing efforts for certain tenant types
- Varied lease expirations may create short-term NOI volatility
Feature Tags
Underwriting Insights
The in-place NOI of $2,879,003 appears sustainable based on the center's stable occupancy history and rent roll composition. The center's current 100% occupancy suggests minimal vacancy loss in base case scenarios, though prudent underwriting should factor 3-5% stabilized vacancy for tenant turnover. Expense ratios align with industry standards for similar vintage community centers, running at approximately 30% of effective gross income. Most leases feature NNN structures with solid expense recovery provisions, providing inflation protection. The 6.73% cap rate on asking price represents fair market value given the property's stabilized nature, B-class positioning, and current interest rate environment, while still offering an attractive spread to alternative investments.
Analyst Notes
Market at Lakecreek represents a stable community retail center with consistent historical performance and defensive characteristics appropriate for yield-oriented investors. The Austin market's continued growth trajectory provides a supportive backdrop for sustainable retail fundamentals. The property's fully occupied status and diverse tenant mix minimize immediate risks, while the below replacement cost basis offers inherent value protection. The property's financial performance remained relatively stable despite COVID impacts, with most tenant concessions being temporary rather than permanent rent reductions. The manageable weighted average lease term warrants a focused leasing strategy to extend tenant commitments, particularly among the stronger performing smaller tenants. The three ground leases (P Terry's, Taco Bell, and Habitat for Humanity ReStore) provide stable income streams with fixed escalations that enhance the center's long-term value proposition. Capital expenditure planning should focus on incremental improvements rather than significant repositioning.