The Baltimore-based buyer took the shopping center at 1614 SW 74th St. from a private local investor as a value-add play. John Bessey, vice president of acquisitions with Phillips Edison, says the 63%-leased asset, situated in the city's southwestern sector, is a distressed property with good fundamentals to support a turnaround.
"If the property's fundamentals are there from a design, access, visibility and environmental point of view, we'll buy it, focus on hands-on management and turn it around," Bessey explains to GlobeSt.com. He says Phillips Edison does have a renovation plan in mind for Southern Hills, but declined to say how much would be invested. Current nationals include Dollar Tree Stores Inc., Starbucks Corp., Hancock Fabrics Inc., Golf USA Inc., Wendy's International Inc. and Joe's Crab Shack Holdings Inc.
The Southern Hills Shopping Center buy comes almost a year after Phillips Edison's first OKC acquisition, the 203,994-sf Windsor Hills Shopping Center at 4605 NW 23rd St. for $10.4 million. Bessey says renovations are under way.
"We're looking at a number of different opportunities in the area. Two of them are in Oklahoma City and some are in outlying areas," Bessey says. He adds that Oklahoma City isn't Phillips Edison's only target city, but it is particularly attractive because of its positioning as a secondary market. "We like the secondary and tertiary cities because public money isn't chasing it. Competition isn't as great. And, pricing in those markets is more attractive to us," he says. "These areas also have the fundamentals of a stable community."
Louis Almaraz and Michael Almaraz with Grubb & Ellis Co.'s Oklahoma City office represented the local seller. Phillips Edison was self-represented.
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