AEW Capital buys Orlando shopping mall from Sterling for $72.75 mln

Sterling Organization, a private equity real estate firm, has sold Orlando, Florida-based shopping mall Center of Winter Park to AEW Capital Management. The price of the transaction was $72.75 million.


PALM BEACH, Fla., Aug. 2, 2018 /PRNewswire/ — Sterling Organization, a vertically integrated private equity real estate investment firm, has announced the sale of Center of Winter Park in Winter Park (Orlando), FL, for $72.75 million. The 244,977-square-foot shopping center was originally acquired by the firm’s value-add institutional fund, Sterling Value Add Partners, LP (“SVAP”), in February 2013 for $27.65 million. HFF marketed the deal on behalf of Sterling Organization. AEW Capital Management was the buyer.

Located at the southwest corner of Orlando Avenue and Lee Road just 4.5 miles from downtown Orlando, Center of Winter Park underwent a facelift and re-tenanting under Sterling’s watch after Kmart closed its store in 2014. Sterling backfilled the Kmart box with new anchor tenants including a Marshalls/HomeGoods combination store, Ross Dress for Less, and DSW. An adjacent Office Depot store was downsized to its smaller prototype and teen discount retailer Five Below opened in what was Kmart’s garden center.

Sterling Organization also upgraded the entire property’s façades, lighting, parking lot, signage and landscaping. New leases with Petco, Zoës Kitchen, Blaze Pizza, Tropical Smoothie Café, Great Clips, MetroPCS, Stretch Zone and others were executed by the firm, and lease extensions were negotiated during Sterling’s ownership with existing anchors LA Fitness and Michaels. Occupancy at the shopping center was 97% at the time of the sale.

“During our five years of ownership, our team was able to execute a textbook repositioning of Center of Winter Park, increasing the quality of the tenancy and more than doubling the net operating income at the property,” said Brian Kosoy, Managing Principal, President and CEO of Sterling Organization. “Credit goes to everyone on our team who worked on the asset. As a result of their efforts, the deal materially outperformed our target returns.”

Sterling’s SVAP fund has been fully allocated and the vehicle currently owns a portfolio of six assets. Sterling is actively investing on behalf of two, newer vintage funds: SVAP III, which focuses on value-add real estate assets where the primary value is retail; and Sterling United Properties I (“SUP I”), which focuses on core/stabilized grocery-anchored shopping centers. In total, Sterling Organization owns more than 10 million square feet of retail real estate across the U.S. approaching $1.5 billion in value.