Pecan Promenade Shopping Center Sold for $19m

By: Paul Dionne | Vizzda 

CIRE Equity—a California-based private real estate investment company in the value-add and opportunistic investment space—has acquired the Target-anchored Pecan Promenade shopping center in South Phoenix. The $19m purchase price represents $135 per square foot and was financed with $15m in new purchase money debt with Prime Finance Partners. The sellers were James D Tate and J Kenneth Tate of Miami-based Tate Capital.

The 140,745 ft² neighborhood shopping center is located at the northeast corner of 99^th Avenue and Lower Buckeye Road in Phoenix. It is anchored by Target—which does not convey—and comprised of 118,908 ft² of inline space and 21,387 ft² of freestanding multi-tenant retail in three buildings. The shopping center totals roughly 336k ft² pm 35.44 acres when the anchor and several pads which do not convey are included and has a parking ratio or 5.15 per 1,000 ft².

Major tenants for property included in sale are:

• LA Fitness – 27,564 ft² of floor space for 16 years with three 5-year extensions commencing 2012
• Ross Dress For Less – 30,160 ft² of floor space for 10 years with four 5-year extensions commencing 2005

Major tenants for property not included in sale are:

• Target – 123k ft² owned by Target Corporation
• JPMorgan Chase – 4,194 ft² of floor space for 20 years with four 5-year extensions commencing 2005
• Taco Bell – 2,934 ft² of floor space for 20 years with four 5-year extensions commencing 2005  
• Jack in the Box – 2,652 ft² of floor space for 20 years with four 5-year extensions commencing 2005

The center was originally developed by Barclay Group, who acquired the 39.62 gross acres on which the project sits in January of 2005 for $5,149,644 or $2.98 per square foot. At that time, Barclay sold 16.53 acres to Target Corporation for $2,662,517 or $3.79 per square foot and encumbered the remainder under a $24.725m construction deed of trust with JP Morgan Chase. The property was noticed for trustee sale in 2010, at which point Tate Capital purchased the note and acquired the property deed-in-lieu. Tate sold three of the pad spaces for a combined $4.244m for a total payout on this deal of $23.244m, net of acquisition and operating costs.

To Contact the Author:

Paul Dionne – pdionne@vizzda.com