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FARMINGTON HILLS, MI-About $400 million is being invested in building and buying retail centers in Michigan, Kentucky and Texas by a joint venture between locally-based Grand Sakwa Properties Inc. and Lormax Stern Development Co., dubbed the Equity Alliance Fund. The venture, formed in April 2006, is set for $1 billion in spending in three to five years, but is ahead of schedule.

Daniel Stern with Lormax says that the acquired and developed shopping centers are exceeding revenue projections and new projects are coming online ahead of schedule. The alliance has invested in 3.5 million sf of new and existing space since its launch, he says, and is now working on buying more retail properties in Tennessee, Kentucky, Florida, the Carolinas, Texas and other states, he says.

He tells GlobeSt.com that it has been easier to buy existing centers than build new ones. “It takes an average of three years to build a new retail property, but with an existing center, you’re looking at owning in less than 90 days,” he says. “It’s still a very good market for sellers, but it’s been good for our venture, as we’re looking at individual properties. Many of the large players are now only looking at buying portfolios.” His company isn’t a stranger to new developments; prior to establishing the venture Lormax helped build Green Oak Village Place in Green Oak Township, which just opened its second phase with a JC Penney store.

The venture is building five new projects in Michigan, including:· Crossroads Village in Canton Township, a 320,000-sf center on 38 acres at Michigan Avenue and Beck Road, which will have two major department stores (likely Kohls and Target) and more than 20 retailers, with a spring 2008 opening. This property is already 96% pre-leased;· A 65,000-sf shopping center at Five Mile and Sheldon roads in Northville Township, to include a CVS drugstore and Huntington Bank, opening in 2008. This center is 60% pre-leased;· A proposed 300,000-sf, Super Wal-Mart-anchored center in Hartland Township, which could open in 2008 if approved. This property is 85% pre-leased;· Construction is underway on a retail project at U.S. 131 and Phoenix Road in South Haven, anchored by a Dunham’s Sporting Goods store. This project is 85% pre-leased;· A multi-phase center in Macomb Township at 23 Mile and Hayes roads, a 300,000-sf project anchored by two department stores.

Also, the venture purchased the 97-percent occupied Woodhill Circle, a 343,000-sf center that includes a Stein Mart and Office Depot in Lexington, KY. In Texas, the venture purchased the 350,000-sf, 65% occupied Eastchase Marketplace in Fort Worth, and is purchasing a 20-acre adjacent parcel for future expansion, as well as a nearby 180,000-sf center that’s now in due diligence.

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