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Tatum Point Shopping Center

Tatum Point Shopping Center

Value Add

Purchased:
In 2011 for $30,000,000. Cash to existing loan of $10,800,000
Appraised Value when refinanced in 2014:  $41,600,000

Project Equity: 
Washington Capital and WVP private investors 

Event:
Refinanced in 2014 upon stabilization and held for cash flow.

Location:
Phoenix, Arizona

Returns:
3 year Project IRR of 18.58%

Background:                 

·       Larger 178,209 square foot center.

·       Well located in Phoenix, West of Scottsdale and North of Paradise Valley.

·       Wal Mart (NAP) property next door and planned to expand into grocery.

·       Anchor tenant, Basha’s, declared bankruptcy and did not affirm lease in proceedings due to Wal Mart expanding into grocery at the location.

·       Shop space still highly occupied despite extended anchor vacancy, proving a strong retail location.

·       Existing loan had to be assumed due to large defeasance cost.


Strategy:                 

·       Release the vacant anchor space.

·       Build an outparcel to move Starbucks who desired a drive thru and increase leaseable area

·       Update the image and look of the center through a mixture of stone, paint and façade work.

·       Either refinance or sell upon stabilization and when original loan expired

Action Items:                 

·       Leased the anchor space to two tenants:  Big Lots and Sprinkler World.

·       Designed and obtained approvals from the city to build outparcel.

·       Constructed new parcel

·       Moved Starbucks to new out parcel with drive through.

·       Leased remainder of new space to Five Guys Hamburgers.

·       Made significant cosmetic improvements including

               o   Wrapped columns with new stone

               o   Added new paint schemes

               o   Added new signage

               o   Improved ingress and egress

Result

·       Successful stabilization.

·       Refinanced.

·       Value of $41,600,000 on refinance date.

·       Still owned and held for future cash flow.

Returns:

·       3 year Project Level IRR:  18.58%

Photographs:

                       BEFORE                                                                                                           AFTER

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