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CHANDLER, AZ-SCI Real Estate Investments has beaten out 19 other prospective buyers to claim its first retail asset in the Valley. The TIC investment group, representing 25 1031 exchange buyers, paid $45.2 million for Casa Paloma, a 130,096-sf upscale lifestyle center.

The five-year-old center at 7131 W. Ray Rd. was sold by German-based investor, Sunbelt Management, which owned the center for three years. "This center is as upscale as you can get," says Marc Paul, founder and president of the Los Angeles-based SCI Real Estate Investments. "It's stunningly gorgeous and has every great lifestyle tenant." He says the SCI pool put down about $16.1 million and financed close to $29.1 million through Charlotte, NC-based Wachovia Bank.

Scott Derrick, SCI's vice president of acquisitions, says Casa Paloma was the most sought after retail asset in the Valley. He tells GlobeSt.com that five-year-old property received 20 offers from a wide pool of REITs, pension funds and private investment groups.

And, Derrick says, SCI Real Estate Investments was not the high bidder. "We came in second place, but our track record offered the seller a certainty of execution that the number one offer didn't have," he says.

Situated on 16.6 acres, Casa Paloma was developed by a partnership of New Hyde Park, NY-based Kimco Realty Corp. and Marty DeRito of Phoenix. The 98%-leased center is anchored by a 26,500-sf AJ's Fine Foods. The roster also includes Ann Taylor, Pei Wei Asian Diner, Gap, Sur La Table, Talbot's and Banana Republic.

According to Paul, about 8% of the leases roll each year until 2010 when 30% of the leases expire. The retail space starts at $18 per sf and goes as high as $40 per sf.

Gregory B. Valladao and Ryan Schubert with Grubb & Ellis Co.'s Phoenix office represented the seller. CB Richard Ellis Inc.'s Phoenix team has been awarded the property management contract.

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Retail