SCOTTSDALE, AZ-A Southern California investor found a use for 1031 exchange money from a local apartment sale. The proceeds have helped to fund the $7.6-million acquisition of the 29,970-sf Gainey Ranch Town Center.
Dobson Bay Club II LLC of Los Angeles put up cash and assumed a loan that's scheduled to expire in 2010. "We'd followed this property. We'd done business with the buyer before and knew he was in need of an exchange," Jan Fincham with Phoenix-based Lee & Associates Arizona, tells GlobeSt.com. "So, we approached the owner and struck a deal." He teamed with Lee & Associates' colleagues Kevin Kopp and Patrick Dempsey to broker an off-market transaction between the Los Angeles investor and the seller, Gainey Ranch LP from San Francisco.
Fincham says the seller had acquired the specialty shopping center at 7704 E. Doubletree Ranch Rd. in 2000 for $6.4 million. The sale made sense, he says, because the seller had improved the asset and was ready to redeploy its capital. The seller also owns a smaller center in West Phoenix. "They have no intentions of selling it right now," he adds.
Kopp says the buyer liked the 70%-occupied center because it offered a lease-up opportunity and an upside on rents. "They felt like rents were below market," he says. "Their goal is to improve occupancy and add value that way."
Kopp says the leases have staggered terms. Un Bacio, an Italian restaurant, is the lead tenant. The new owner plans to self-manage and lease the property.
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