wood village

Opportunistic Stabilized Case Study (active)

Wood Village Town Center

The Opportunity

• $26.55M acquisition of a 92% occupied, 139,831 SF institutional quality grocery shadow-anchored multi-tenant retail property with an additional two interior undeveloped pads located in the city of Wood Village, Oregon within the greater Portland MSA.

• Distressed/motivated seller - CIRE ultimately negotiated a purchase price $4.4M below initial broker guidance (representing an 8.40% cap rate on purchase price) due to a seller/ capital partner mandate to sell existing fund assets and sever the existing partnership.

• The property is 92% leased by a national tenant mix that includes a well-performing Kohl’s department store (S&P: BBB) and diversified mix of shop tenants with strong sales.

• The property is shadow anchored by strong performing national tenants Fred Meyer (Kroger grocer) and Lowe’s Home Improvement that enhance the long-term stability and high traffic draws of this location.

• High occupancy rate (92% at acquisition) with NOI growth potential and consistent income streams from a variety of national and regional credit retailers with attractive cash on cash yields to investors averaging approximately 7.50% per year.

RISK MITIGATION / VALUE-ADD STRATEGY

• Near-term basis/risk reduction strategy involves the potential disposition of four (4) stabilized outparcel pads totaling approximately 27,300 SF and two (2) undeveloped pads totaling 3.02 acres thereby producing near-term distributable proceeds that pay down existing debt balances, significantly reducing overall leverage and investor equity/risk exposure.

• Underwritten downside protection and upside potential includes CIRE’s successfully negotiated 12 month seller rent guarantee for the largest vacancy within the center, a 9,800 SF junior anchor suite located next to Kohls.

• Acquire a well-located, stabilized asset and aggressively apply asset management expertise to the property to maximize efficiencies, reduce costs, and enhance cash-flows. Stabilize the remaining 11,200 SF through a roll-out of an aggressive hands-on leasing strategy utilizing market tenant improvement packages and aligned leasing commission incentives.

Property Description

Property Type:
Multi-tenant Retail

Sub-Market:
Wood Village, Oregon

Number of Bldgs:
Five (5)

SF / Acres:
139,831 SF / 18.05 acres

Year Built:
2005

Current Occupancy:
92%