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Property managers are driving major value in retail assets—as long as they understand the businesses of their tenants. It’s become clear that successful retail tenants make successful retail properties, but there is more to it than simply finding a daily-needs anchor that promises Internet resistance. Case is point is a recent five-building automotive retail property that traded hands in Chula Vista for a 176% over the original investment. The property is located in a retail-zoned corridor—a rarity for automotive projects today, which made it an especially desirable opportunity. While the property was rare because of the zoning, the property management team was integral in driving value, turning the failing and mostly vacant asset into a profitable automotive center.

The most interesting aspect of this case is perhaps the owner’s decision not to change the use. The ownership could have gutted the property and built it out for a more traditional retail use—after all, the project is zoned for retail. Instead, The Heritage Group, the team behind the value-add project, chose to keep the automotive use. “We could have changed the use, but the property has never been anything other than automotive,” Mark Hoekstra, managing director for The Heritage Group, tells GlobeSt.com. “The way the buildings were designed, the slope of the floors, the drainage are all designed for an automotive use. We chose to keep the automotive tenants in the building, and to have no non-automotive tenants. However, you certainly could do it if you wanted to.”

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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