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AVONDALE, AZ-As part of its aggressive expansion in the Valley, Inland Western Retail Real Estate Trust Inc. has paid $68.8 million for 318,410 sf of the 620,000-sf Gateway Pavilion. The Oak Brook, IL-based REIT has the option to purchase the remaining portion upon completion later in 2005.
A partnership between Phoenix-based Kitchell Development Co. and Williamsville, NY-based Eastbourne Investments Ltd. developed and sold Gateway Pavilion after negotiations with Inland began in May, says Lou Quilici, SVP of acquisitions for Inland. The center traded for $216 per sf.
Quilici tells GlobeSt.com Gateway Pavilion is "one of a handful of [local] trophy properties" due to its architecture, location and tenant base. Situated onroughly 75 acres, the center is at the northwest corner of 99th Avenue and McDowell Road near Interstate 10 and Loop 101. "Avondale is a growth area, and all the new homes that are being built lead right to Gateway," he says.
Gateway Pavilion is flanked by an 18-plex Harkins Theatres on one end and Costco on the other. It is 92% leased to national retailers such as Circuit City, the Sports Authority, Mattress Outlet and T-Mobile. "Every tenant you want to have, we have in this center," Quilici says.
As part of the transaction, Inland also gains control over two pad sites that will be developed over the next couple of years, Quilici notes. The REIT paid cash for the property, but will probably put debt financing on it in the future, according to SEC documents. So far this year, The Inland Group and its REITs have invested more than $100 in the Valley.
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