Property at U.S. 17 and Bowman Road bought for fraction of what previous owner paid in 2007

In a jarring example of the long skid in commercial real estate market values, an aging Mount Pleasant shopping center at a prominent corner location has been sold for a fraction of what the previous owner paid only four years ago.

The Kmart-anchored property at U.S. Highway 17 and Bowman Road and some nearby properties were sold to a partially local investment group on Friday for about $5.5 million, said J. Luzuriaga, a partner in the deal.

That's a roughly one-fourth of the price paid when previous owner, an affiliate of Transwestern Commercial Services of Chicago, bought the 130,000-square foot shopping center and several nearby parcels during 2007.

The new ownership is a venture between Daniel Island-based Grove Property Fund and several partners with Charleston-based J.L. Woode, a real estate investment firm.

Though technically over, the last recession took a big bite out of commercial property values around the country, as high unemployment and spending cutbacks have dramatically reduced demand for office space and shopping centers.

The buyers of the Kmart site said the 17-acre property is ripe for redevelopment given its location but they stressed that any changes could still be years away.

The key hurdle is that Kmart has the option to extend its lease eight times -- each for a period of five years.

"There's a limit to what we can do," said Ed Navarro, a principal of Grove Property Fund, which last year became a part owner in the 1,200-acre Carolina Park tract farther north on Highway 17.

Navarro said the Kmart ownership group isn't working on any redevelopment plans for that property.

Friday's transaction involved a large block of land near Bowman and Highway 17.

Transwestern Mount Pleasant LLC bought the Kmart-anchored center in early 2007 and then snapped up about eight smaller parcels along nearby Old Georgetown Road. At the time, the recession was getting under way.

In all, the investment firm spent $19 million on real estate in the area. Friday's sale included all of the property.

Navarro said the shopping center has "some empty spaces," but he did not know the exact vacancy rate. In addition to the town's only Kmart, tenants include a Dollar General discount store and Little Caesar's Pizza.

Among the larger vacancies is a health club that went dark in 2009.

Reach Katy Stech at 937-5549.