CINCINNATI—Faris Lee Investments, an Irvine, CA-based firm, has just completed the portfolio sale of two fully-occupied retail centers in Kenwood, an suburb of Cincinnati, for a total of just over $32 million. The properties, which sit across the street from each other, include the 57,000-square-foot Kenwood Pavilion and the 27,000-square-foot Kenwood City Place. And company officials say the transaction illustrates the extraordinary level of demand for such properties, especially those in affluent areas.

The seller was a joint venture between Cincinnati-based Jeffrey R. Anderson Real Estate and Kentucky-based P&P RE, LLC. The buyer, Greenwood Village, CO-based GDA Real Estate Services, LLC was in a 1031 Exchange. Donald MacLellan, senior managing partner with Faris Lee, along with his colleagues Richard Chichester, Chris DePierro, and Tom Chichester, represented both parties.

“On a macro level there is so much capital seeking returns,” MacLellan tells GlobeSt.com. “Of course, the 24-hour cities always experience stronger demand, but it’s across the board,” and reaches even non-core metro areas like Cincinnati.

The number of solid offers Faris Lee received for the portfolio was in the “double-digits,” he adds, and all that interest “was really about the submarket in Kenwood. Fundamentally, it’s one of the stronger submarkets in the Cincinnati region.” It combines strong job growth, low unemployment and a population with high disposable incomes. Within a three-mile radius, the average household income is more than $90,000, and in addition to its roughly 150,000 permanent residents, Kenwood has a huge population of daytime employees.

Furthermore, many top firms, including Duke Realty, Phillips Edison and Blackstone, own property in the neighborhood. But what was perhaps most impressive for the prospective buyers, MacLellan says, was General Growth Properties’ Kenwood Towne Center, a 1.2 million-square-foot regional shopping center anchored by Nordstrom, Dillard’s and Macy’s, which he considers one of the crown jewels of its US mall portfolio.

"Obviously, having institutional owners nearby is always a plus,” he says. “It’s a barometer. If they’re there, it creates automatic credibility because they are pretty particular about what markets they go into.”

Although both of the purchased centers have relatively small footprints, the properties host a set of high-end, niche retailers and restaurants. Kenwood City Place, for example, has several successful restaurants including one of the nation’s most popular concepts, Coopers Hawk Winery and Restaurant. “They are only in very strong, very affluent areas,” says MacLellan.

Although this offering, which was marketed both as a combined portfolio and as separate properties, generated interest from a wide variety of investors, Faris Lee felt that GDA was the best fit due to their local experience. “They had a great deal of knowledge about and familiarity with the trade area and appreciate the economic fundamentals,” according to MacLellan. “They really like this submarket, and that gave us a higher certainty of their closing.”