SWC 40th and Chandler Investors LLC, a newly formed purchasing entity of A&C Properties, initially bought the entire center for $19.5 million from an pension-fund controlled entity represented by California-based SSR Realty Advisors, which then sold the 112,513-sf Fry's Supermarket for $13.2 million to Smith's Food & Drug in an all-cash deal. The carving lets A&C with 29,750 sf of inline space.
"A&C now has an anchor tenant who just spent $13 million to acquire their store. That's a good indication that they're going to be there for awhile," Don Burnes, a senior vice president with Johnson Capital Partners of Arizona, tells GlobeSt.com.
Burnes arranged an acquisition loan for A&C Properties with a 10-year term for slightly more than $5 million through Toronto-based Canadian Imperial Bank of Commerce. The loan, with an 80% loan to value, carries a 5.69% interest. Smith's, a subsidiary of Cincinnati-based Kroger, purchased the Fry's Supermarket in an all-cash transaction.
Built in 1995, the fully leased Lakeside Plaza includes tenants like Hallmark, Serranos Mexican restaurant, a dentist and dry cleaner. Rents range from $17.23 per sf to $22.50 per sf.
"It's a modern, very well-designed, attractive center in a solid demographic in Phoenix. Fry's is the number-one market share grocer," Burnes says.
With Kroger's penchant for owning all its grocery stores, Burnes adds the deal was a good opportunity for A&C Properties to team with a well-performing, long-term anchor tenant. CB Richard Ellis Inc.'s Phoenix office negotiated the purchase on behalf of SSR Realty Advisors while A&C Properties was self-represented.
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