Walter explains that selling the center presented "a long list of potential obstacles," including parking and environmental issues. The property, at 119-201 Lincoln Blvd., was built in 1965 and is 100% occupied by Sav-on, Big Lots, 99 Cent Store and Foot Locker.
Los Angeles-based Combined Properties bought the center from the Deutsche Family Trust, also based in L.A. Walter and Jeff Conover of Faris Lee Investments represented the seller, with Donald MacLellan of Faris Lee representing the buyer.
Walter notes that the parking lot was on a ground lease with reappraisal not due until 2007. The environmental issues included dry cleaner contamination and gas leaking from a corner gas station.
Selling the center called for locating a buyer with the vision to see the upside of the deal and with a history of successful retail center repositioning, according to Walter, who says that with low market rents and leases set to expire starting in 2006 to 2008, the center offered value-added upside.
Although the buyer will realize a low return for the first several years, the shopping center offered "a long-term play with a significant potential upside one to three years down the road," Walter says. A number of prospective buyers were interested in the property, with the ultimate buyer winning the deal by being willing to commit quickly.
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