Apta is acquiring Target Adjacent Retail Center, a 40,617 SF community retail center located at 27 South Gateway Drive in Fredericksburg, Virginia. Built in 2007 on a 3.92-acre site, the property is shadow-anchored by a recently renovated Super Target that generates 647,500 annual visits and serves a trade area with a median household income of $95,000 within one mile and $129,000 within the zip code.
Anchored by PetSmart, one of the highest-volume stores in the mid-Atlantic region, with an 18-year operating history at this site and two successive renewal options exercised. Together with Polaris Dance, Anytime Fitness, Dr. Zaiber DDS, Paris Nails, Al Yemen Market, and Marib Restaurant, the property is 100% leased at acquisition.
Acquired at $217 per square foot against an estimated replacement cost of $300 per square foot. With 38% of gross leasable area rolling within the next five years and current rents running 18 to 22% below market, the property is positioned to reset toward market on each rollover. Year 1 Net Operating Income is $745,459 on the $8,800,000 purchase price, equating to an 8.47% going-in cap rate.
The property sits at the number-one retail interchange in the Fredericksburg market, with direct I-95 visibility at 167,000 vehicles per day, dual pylon signage, and a signalized corner at Route 17. Physicians who own commercial real estate understand what irreplaceable location and tenant commitment to a site actually means. That is the thesis here.