Buchanan is a real estate investment bank. Hill Cos. is an owner owner and operator of commercial properties. The duo's total investment in the property is $36 million, including $500,000 budgeted for cosmetic improvements.
The shopping center is situated on 13 acres in Downtown Folsom, a prosperous trade market east of Sacramento. Tenants include Office Max, Blockbuster and Food Source. Wal-Mart is a shadow anchor.
Buchanan SVP Jim Ebert says the acquisition was an opportunity to acquire a well located retail center in a tight market for below replacement cost. As of the middle of the year, Folsom had some 3 million sf of retail space that was approximately 99% leased.
"The Folsom trade area is a place that retailers want to be: It has solid employment growth, strong household formation, and a high median income," he says. "We see a real opportunity to add value to this property by improving the property's tenant mix, making strategic physical renovation and leasing aggressively."
Ebert says plans are underway to reposition the property through re-tenanting and realizing market rates for the tenant space. "We will immediately implement a revitalization plan to upgrade the property," he says. "We feel that once the upgrades are complete there will be an even larger demand for retail space of this caliber."
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