Evergreen Devco Sells Goodyear Centerpointe Improvements for $44.5m

By: Paul Dionne | Vizzda 

Alexander Haagen III of Haagen Co. paid $44.5m for the improvements in the Goodyear Centerpointe power center in a deal valuing the 324,068 ft² of built retail property at $137.32 per square foot. The seller was the original developer and ground lessee for Goodyear Centerpointe, Evergreen Development Company. Haagen tendered $15.6m in cash for the buildings and secured an additional $28.9m in financing with RGA Reinsurance which matures in August of 2034. Marketing materials provided by the seller indicate an 8.25% capitalization rate at the listed price of $44.75m, implying a capitalization rate for this deal of 8.296%.

The Goodyear Centerpointe power center is located at the northeast corner of I-10 and McDowell Road in Goodyear. The 303,391 net rentable square foot complex includes three single-tenant pads, three freestanding multi-tenant spaces, an anchor with attendant inline portion demised into nine spaces and two unbuilt outparcels. The improvements were completed in 2008 and sit on a 31.54 acre site that is master ground leased to Evergreen Development Company by Cardinal Capital for 99 years, commencing in 2006. Per the previously mentioned marketing materials, the power center is 98% occupied with a stable mix of credit tenants, including: 

• Toys R Us: 64k ft² for ten years with eight 5-year renewals commenced May 2007
•  BevMo: 15k ft² for ten years with two 5-year renewals commenced May 2007
• Texas Roadhouse: ten years with three 5-year renewals commencing January 2015
• Red Lobster: ten years with three 5-year renewals commenced September 2007 
• Olive Garden: ten years with three 5-year renewals commenced September 2007
• Conn’s Appliances: commenced June 2013 
• Sport Chalet: commenced January 2012
• Paradise Bakery: commenced October 2007 
• Party City: commenced March 2008

Evergreen entered into the ground lease with Cardinal Capital for the 31.54 acres that comprise Goodyear Centerpointe in two leases: the eastern 15.54 acres for 78 years and the western 16 acres for 77 years, both commencing January 9^th, 2002. In 2006, both ground leases were amended to extend the term to 99 years and Evergreen encumbered the property with $37.9m in new debt with Comerica Bank. In June of last year, Evergreen was loaned an additional $23,812,500 against the property by Compass Bank, increased by $3.1m to $26,912,500 in November of that year. There is a 10% escalation to the base rent on the ground lease in 2016 and an additional 10% increase every ten years thereafter for the remaining 89 years of term. 

To Contact the Author:

Paul Dionne - pdionne@vizzda.com