Part of a major Lexington shopping center has sold again. And the price dropped
A portion of one of Lexington’s biggest shopping centers recently changed hands again. And the sale could mean more changes are coming.
Hamburg Pavilion, the 106-acre development along I-75 and Man o’ War Boulevard that was the main original piece of the shopping center on the eastern edge of Lexington, sold for $135 million, according to property records online.
The sale, finalized in late October 2024, was for about $50.7 million less than the last time the same property sold.
Fairbourne Properties in Chicago purchased the store buildings late last year from HAP Investment, which bought Hamburg in 2014 for a record $185.7 million for two parcels. Fairbourne did not immediately respond to a request for comment.
Fayette County PVA David O’Neill said in 2014 it appeared to be the largest land transaction in Fayette County history.
O’Neill confirmed the recent sale and price, saying he isn’t surprised at the reduced price.
“It was a big purchase price in 2014. And since then they have struggled with vacancies and interest rates are higher,” he said via text. “Brick and mortar retail has shifted more to online. ... I did not think the 2014 purchase price made sense from a cash flow perspective. I would have expected the most recent purchase price to be even lower but for a zoning change that happened since the 2014 sale.”
That zoning change has significantly reduced parking requirements for large-scale shopping centers, he said. “So I imagine the latest investors see some of those parking lots as redevelopment opportunities.”
According to Fairbourne’s web site, Hamburg Pavilion has 73 retailers at the moment, including Marshalls, Ulta, Dick’s Sporting Goods, DSW, Best Buy, Kohl’s, Ross, PetSmart, Michael’s, Burlington. Target, which sits at the end of the main row of stores, is separately owned.
Other key tenants include At Home, Regal Cinemas, Marshall’s, PetSmart, Bob’s Discount Furniture, Barnes & Noble and Old Navy.
Restaurants include Big City Pizza, Crumbl cookies, Honey Baked Ham, Local Taco, Logan’s Roadhouse, Old Chicago, Subway, Ted’s Montana Grill and Tekka.
History of Hamburg Pavilion stores
The property was developed beginning in the 1990s. Preston and Anita Madden sold part of their horse farm, Hamburg Place, in 1997 to developer Stan Thomas of Georgia. Thomas Land and Development, now known as Fourth Quarter Properties, sold the land in 2014 to a subsidiary of Starwood called HAP Property.
Fourth Quarter Properties filed for Chapter 11 bankruptcy protection in Atlanta in 2010, with outstanding taxes owed in several states. A reorganization plan was approved in 2011; much of the outstanding debt had been acquired by Starwood Capital.
At the time of the 2014 purchase, Starwood said the property was 99% leased. “Hamburg Pavilion is an established market leader that benefits from strong tenants, convenient access, stable demand drivers and a growing trade area,” said Ethan Bing, vice president of Starwood Capital Group, at the time. “We are pleased to acquire a high-quality asset and provide our investors with an attractive combination of in-place cash flow and upside in a trending market with significant barriers to new supply.”
HAP/Starwood did not respond to a request for comment on the October 2024 sale.
Another portion of the original Madden farm was bought for Meijer for its grocery store; much of the rest is controlled by Patrick Madden.
Madden said that the lower price is not an indication of a soft retail market in Lexington.
“The retail market’s the strongest it’s ever been,” Madden said. “I have zero vacancies (in the rest of Hamburg), I’m doing deals in Nicholasville, Frankfort, Louisville ... we’ve got more new tenants in the market than we’ve ever had.”
This story was originally published February 7, 2025 at 11:14 AM.
