CTO Realty Growth Buys Florida Retail Hub for $65.2 Million
The acquisition of Pompano Citi Centre expands the REIT's Sun Belt portfolio, capitalizing on the region's booming population and strong retail demand.
CTO Realty Growth (NYSE: CTO) has deepened its investment in the Florida market with the acquisition of Pompano Citi Centre, a sprawling retail-led property in Pompano Beach, for $65.2 million. The deal, announced Wednesday, represents a significant portfolio expansion for the real estate investment trust, equivalent to more than 11% of its roughly $584 million market capitalization.
Investors reacted favorably to the strategic purchase, with shares of CTO Realty Growth rising approximately 1.9% in morning trading following the announcement. The transaction underscores the company's ongoing strategy of acquiring income-producing properties in high-growth markets across the U.S. Sun Belt.
The property itself is a substantial asset. Pompano Citi Centre is a 35-acre, open-air shopping center encompassing over 509,000 square feet of leasable space. According to a company press release, the center is currently 92% occupied and marks CTO's entry into the robust Fort Lauderdale metropolitan area. The purchase also includes 62,000 square feet of unfinished space, presenting a clear path for future value creation through additional leasing.
This acquisition fits squarely within a broader trend of strength in Florida's commercial real estate sector. The state's retail market has been fueled by sustained population inflows and steady economic expansion. According to a recent market analysis, retail rents in Central Florida grew 4.4% year-over-year, far outpacing the 2.1% national average. Meanwhile, markets like Miami and Tampa boast exceptionally low retail vacancy rates, which have consistently remained below 5% and in Miami's case, as low as 2.7%.
The deal is the latest in a series of investments for CTO, bringing its year-to-date acquisition volume to nearly $150 million. Management has identified opportunities to enhance the property's value by adjusting rents to current market rates and leasing up the available shell space, which should provide an incremental boost to the property's net operating income.
CTO Realty Growth, a REIT known for its high dividend yield of approximately 8.5%, maintains a positive outlook from Wall Street. The company currently holds a consensus 'Buy' rating from six covering analysts, who have an average price target of $20.60 on the stock. This latest acquisition is likely to reinforce that confidence, as it positions the company to directly benefit from the powerful demographic and economic tailwinds driving growth in one of the nation's most dynamic regions.