Opportunities
HOW WE MEET CHALLENGES:
While we are careful in our due diligence on all of our Phoenix commercial real estate projects, there are occasional challenges. The following are examples of ways in which we looked at these situations as opportunities to improve our outcome.
NWC 83rd and Thunderbird, Peoria AZ , a 17 acre retail project. We completed project design and obtained entitlements and the offsite and onsite improvements were built including traffic signals and utility repositioning. During this process we lost our anchor tenant. We created a new marketing strategy and eight pads were sold to users including McDonalds, Bank One, and CVS. The balance of 7 acres was sold to a buyer with an anchor providing a substantial return without the risk of leasing speculative space.
SWC 107th Ave and Thomas Rd. Avondale, AZ. Following acquisition of a 5 acre retail parcel, the market softened for shop space in that area. Again, we created a new marketing program targeting single tenant users/buyers. This resulted in a sale of Phoenix commercial real estate to Fresh and Easy, one of the largest grocery chains in the UK, at a substantial profit and less risk to the partnership.
SEC 107th and Indian School Rd. Goodyear, AZ. Our project was stalled as the neighborhood association was strongly against one of our larger tenants, a tire store. We retained an experienced land use consultant who joined us in meetings held with the neighbors and overcame their objections. These meeting also created goodwill with the neighborhood group which helped us throughout all phases of the project.
44th and Ray Rd Phoenix, AZ. On this ten acre Phoenix commercial real estate site, we entered into a purchase agreement to acquire the property having approximately 5 acres under an agreement to sell to a health club. During the escrow period we marketed the balance of the property resulting in Shell and CVS acquiring the rest of the site under separate purchase agreements. We then went back to the seller and negotiated with the owner several lengthy extensions on closing to meet the city’s demand for offsite improvements including a traffic signal. This cost was prorated between the various owners at the intersection. We then coordinated with the three buyers and the seller a simultaneous closing date and hour and closed on the property with no funds put into the project at closing. This was a home run for the partnership.
SWC 83RD and Thunderbird. Just as we were completing tenant improvements for a 100,000 sf anchor tenant, FOOD For LESS, they declared bankruptcy . Within a short period of time we split the space and leased it to two new tenants, Sprouts and 99 Cent Only. The rental income was better and both tenants were much stronger. We subsequently sold the project with an improved cap rate that would not have been possible with FOOD for LESS.
