SCOTTSDALE, AZ-Stockbridge Capital Group LLC has made its first acquisition in the Phoenix metro area, paying $16.5 million for DC Ranch Crossing, a grocery-anchored center located within the prestigious master-planned community of DC Ranch. The San Francisco-based investor beat out 21 other potential buyers to gain control of the 68,113-square-foot, class A property, which also includes a vacant pad and an additional 2.35-acre parcel.
“Stockbridge Capital’s leadership is comprised of former RREEF principals, and Phoenix was a natural place for them to expand as they moved beyond the West Coast since RREEF has been active in the Phoenix marketplace for years,” says Glenn Smigiel in CBRE’s Phoenix office. “The firm is definitely looking at other acquisitions here.” He represented the seller in the deal, along with Bob Young, Steve Brabant and Rick Abraham, also located in CBRE’s Phoenix office.
DC Ranch Crossing, which was developed and sold by an affiliate of local developer, DMB Associates, is located on the southeast corner of Pima Road and Legacy Boulevard. “It’s the very first retail center that people see as they come off Loop 101 to go into North Scottsdale,” Smigiel says, adding that the average household income within a one-mile radius of the center is $171,000. “In the long-term, the location and the center are just going to get better and better.”
Smigiel tells GlobeSt.com that there’s a tremendous amount of investor interest in grocery-anchored centers in the Phoenix marketplace. “We were shocked at how many good quality offers DC Ranch Crossing received,” he says, noting that Stockbridge Capital paid cash for DC Ranch Crossing. The firm had a due diligence and closing period of roughly 35 days.
DC Ranch Crossing was 60% occupied at the time of sale to the anchor, A.J.’s Fine Foods, along with First American Title, Verizon and Calistro California Bistro. The vacant space is still in shell condition, Smigiel says.
Smigiel says investors were keen to take advantage of an acquisition that offered the opportunity to increase cash flow and value as space is leased. Moreover, he notes that the vacant pad and land will provide the new owner with additional development opportunities. “The first objective is to lease up the vacant space and then find a user for vacant pad and the development site,” he adds.
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