Editor’s note: This story has been updated since its original publication to reflect that California-based Marcus & Millichap represented both parties in the deal. The previous story was incorrect. Daily Report regrets this error.
A group of Canadian investors has acquired the building on South Acadian Thruway near Interstate 10 that is home to the recently opened Saltgrass Steak House.
NADG-NNN Acquisition Inc. acquired the 8,500-square-foot building from Lafayette-based Bitt Investments LLC for nearly $3.8 million, or $445.5 per square foot, according to Chris Shaheen, a broker at Marcus & Millichap, which represented both parties in the deal.
The price of the sale, which closed in July, is more than 13% lower than the original $4.4 million asking price.
Still, Shaheen believes both sides got a good deal in the transaction, which will not impact the restaurant. On the contrary, Saltgrass Steak House’s 10-year lease on the building—which is expected to generate a net operating income of $255,420 per year—was one of the selling points that made the building appealing to the Canadian buyers.
“Both the tenants and the cap rate made it an attractive property,” Shaheen says.
The cap rate, which is the rate of return based on the income the property is expected to generate, is 6.8%.
Shaheen says Marcus & Millichap, a national brokerage based in California with a growing Baton Rouge presence, has seen rising interest from national investors in southern states because the cap rates here are so much higher than in other parts of the country.
“Cap rates in California, which has some of the highest property values in the country, will average between 4% and 5%, while similar properties in Louisiana will have a cap rate of 6% or 7%,” Shaheen says.
“Marcus & MIllichap invested $2 billion from California investors last year and $550 million of that was in the southeastern U.S.,” he says. “We get a lot of money from California, and also from the northeast and New York area—and they all tend to like the southeast.”
Shaheen says demand from out-of-state investors is particularly high for southern multifamily complexes.
“They feel the south, with the strength of the petrochemical industry, is a good place to invest,” he says. “But it’s mostly because the cap rates are so attractive.”
—Stephanie Riegel
