DALLAS-Phillips Edison & Co. is laying the groundwork for an extensive overhaul of its newest asset in the metro, the 64,753-sf Buckingham Square Shopping Center. The Baltimore-based buyer has scooped up the value-add play at a below-replacement cost of $60 per sf.

Buckingham Square, situated on 6.2 acres at 1455 W. Buckingham Rd., was 51% vacant at sale time, primarily due to a 32,113-sf box formerly occupied by MJ Designs. The new owner was one of six chasing the deal, locking it down in a 99-day start to finish with its location as one of its chief selling points, according to Phillip Levy of Marcus & Millichap Real Estate Services. He and colleague Blake Burnett were selling the 19-year-old center for its developer, Peek Properties of Richardson.

“We could end up owning this forever,” John Bessey, vice president of acquisitions for Phillips Edison, tells GlobeSt.com. “It has the opportunity to be a class A center. It’s tired. It needs reinvigorating.”

Bessey says about two months will go into planning the overhaul of the class C center, with construction completion penciled for second quarter 2008. The plan will hold true to the company’s MO. “We re-skin, re-tenant, re-merchandise and reposition,” he says. “This is an unstable property. The typical turnaround time to stabilize a property is three years.” The renovation cost is still being tabulated, but Bessey says “it will be substantial.”

In the marketing run, the Marcus & Millichap team used the in-place below-market rents as added fuel for the value-add deal. Only Dollar General, which has two years left on its lease, is in the market-rate range of $14 per sf to !7 per sf, according to the memorandum. The new owner also has another vacant 12,000 sf for harvesting upside. Bessey says the preliminary plan calls for splitting the shuttered MJ Designs’ box into “two or three” spaces and re-leasing it.

Bessey says the 14-tenant Buckingham Square’s name will stay the same as the team digs into the repositioning plan for a center with a daily drive-by of 80,000 vehicles. “It’s on a strong corner and shadow-anchored by a Wal-Mart Neighborhood Market store,” he says. “The City of Richardson has interest in revitalizing that corner.” Across the street is another redeveloped shopping center and up the street is Indianapolis-based Simon Property Group’s Richardson Mall, which is earmarked for a $24-million overhaul.

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