How Retail Investors Are Maximizing Value

Champion Real Estate Co. has completed a value-add strategy on Grand & Alosta, a grocery-anchored shopping center in Glendora. The investor redeveloped the 85,615-square-foot retail center into a 70,811-square-foot property, reducing the square footage. Champion purchased the asset in 2016, and sold it with multiple offers and strong interest.

“Champion Real Estate Company’s plan was to take an 85,615 square foot single tenant building and redevelop it into a 70,500 square foot neighborhood center,” Chris Wilson, EVP and retail partner with Champion Real Estate Co., tells GlobeSt.com. “We replaced the demolished gross leasable area with two very desirable street front pads. We leased the project with daily needs tenants that would appeal to the community.”

The value-add strategy was executed quickly from acquisition to sale. Strong investor demand helped expedite the sale process, but Champion was able to get a jump-start on the strategy early on. “This was a unique situation in that we contacted the owner nearly three years prior to closing on the acquisition, which enabled us develop a strategy, secure entitlements and begin marketing the property while in escrow,” explains Wilson. “By the time we time we closed in 2016, we had entitlements and a signed anchor lease which helped to streamline and execute our plan more efficiently. We completed the project on time and within budget.”

The center is co-anchored by a Sprouts and a Marshalls, both of which are considered Internet-resistant tenants. “In today’s retail environment, centers that succeed and have long-term viability are ones with service and internet-resistant tenants,” says Wilson. “Champion Real Estate Company was able to create the perfect environment with co-anchors Sprouts and Marshalls along with smaller tenants to meet the needs of the community.”

Although the sale and strategy were successful, Champion is finding better opportunities in other asset classes, and it plans to use the proceeds from this sale to acquire a multifamily property. “Champion Real Estate Company is a commercial real estate investor and developer focused on retail, multifamily and student housing properties,” says Wilson. “Recently, we’ve had great recent success in value add multifamily and student housing. We felt our invested and sponsors’ equity would earn a higher return in those product types at this time.”