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SCOTTSDALE, AZ-With the $73-million purchase of the 143,409-sf Shops at Gainey now completed, Madison Marquette Retail Services LP will turn its focus to the tenant mix for new owner, Principal Life Insurance Co.

Madison Marquette plans to put together "the right tenant mix to make sure the center runs at its highest use," says Phil Lyons of Grubb & Ellis/BRE Commercial in San Diego. He and colleague Bruce Schiff helped to facilitate the transaction on behalf of the seller, Gainey Village 03 LLC, led by Gary Dragul of GDA Real Estate Services in Denver, and the Des Moines-based Principal. Grubb & Ellis/BRE in Phoenix also assisted with the sale of 8787 N. Scottsdale Rd., which fetched more than $500 per sf.

The five-building Shops at Gainey was built in 2000 by WestCor Partners of Phoenix at the gateway to the 560-acre Gainey Ranch, a mixed-use development featuring resort hotels and office developments. Lyons tells GlobeSt.com that GDA sold the property because it "typically bought more power centers and neighborhood shopping centers and that's where they're the strongest. This is a specialty center and it's a different type of center from a management point of view."

As a result, Lyons says, the off-market deal was a win-win situation for everyone. "This fits in perfectly with Madison Marquette's core assets," Lyons says. "The sellers were happy with the price and the buyers were happy with the property because they could see the long-term value in the center." The Washington, DC-based Madison Marquette advised Principal on the acquisition and then was seated to lease and manage it, he says.

The occupancy was close to 97%, but there were no pending leases or lease rolls at the time of closing. "Madison Marquette's expertise is in managing these types of specialty centers," Lyons says. "Now their efforts will involve trying to plug in to see what services the community is lacking and how to get the best use from the center."

Instant Insights /

JV Sizes Up Tenant Mix of $73M Off-Market Buy

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