(For more retail coverage, click GlobeSt.com/RETAIL.)
PHOENIX-Highland Development Co., the San Mateo, CA-based wholly owned subsidiary of Marcus & Millichap Real Estate Investment Brokerage Co., has bought 28 acres of partially developed retail land surrounding the Metrocenter regional mall. The deal closed with a short-term loan for $30 million.
Chicago-based Wrightwood Capital cleared a two-year loan with a pair of six-month extension options. The floating rate loan is based on the 30-day Libor. Charles Garcia with the San Francisco-based Newmark Realty Capital Inc.'s Irvine, CA office arranged the financing to buy, lease and subdivide the property, which was bought from Scanlan Kemper Bard Cos. of Portland, OR.
A broad mix of regional and national tenants, including restaurants and a hotel, sits on the land. In all, Highland bought 121,803 sf of retail space and 836,000 sf on ground-leased land.
According to Cheri Grossman, Wrightwood Capital's central regional director, the buyers plan to further subdivide the parcels, increase overall occupancy by filling existing space, renewing leases and then selling the components. "They'll either sell it as an entire portfolio or as parcels, whichever will best maximize value," she tells GlobeSt.com. "There is vacancy among the retail space, which will provide opportunity to stabilize the overall income stream." She says the new owners also plan to renovate some structures as part of the value-add plan.
Key to the acquisition is its proximity to the 1.4-million-sf Metrocenter, which was taken over by Santa Monica, CA-based Macerich Co. earlier this year and is now undergoing renovation for a repositioning. Work on the regional mall's exterior will be done by year's end and the interior retooled in 2006.
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