Proven Capabilities, Relationships Help RED Complete Timely Acquisitions
With strong access to both lending and capital partners, RED is an active acquirer of select retail and mixed-use properties in attractive markets. Building on its much-admired development history, RED now also deploys its well-honed set of property valuation, management and marketing skills to make strategic acquisitions that strengthen its portfolio. Three transactions completed in 2010 exemplify RED’s approach:
Woodbury Lakes – Woodbury, MN
Excellent retailer relationships, unmatched market knowledge and ready financing made RED the perfect choice to acquire Woodbury Lakes in 2010. This 300,000+ square foot, all-outdoor center was originally developed by RED and OPUS in 2005, and subsequently sold to a pension fund advisor the same year. When the new property owner faced foreclosure, RED developed the successful bid for the property and, importantly, was able to close the deal in 45 days.
With RED’s focused leasing abilities and on-target property management, occupancy rates have increased dramatically since RED’s acquisition: from 76% occupied in July 2010 to 88% in July 2011. Occupancy at Woodbury Lakes is projected to rise to 92% by the end of 2011. A key was bringing new-to-market retailers to the project including buy buy Baby and Charming Charlie.
“My firm represented the seller of Woodbury Lakes, and throughout the process, RED was an engaged and active buyer. RED’s team performed a thorough and exhaustive review of the property and the closing occurred as scheduled for the negotiated price. I enjoyed working with RED and would welcome the opportunity to do so again – this is a very good company!”
-Robert B. Pounds, SCSM, Senior Vice President, Investment Services, Colliers International
Aspen Place at The Sawmill – Flagstaff, AZ
Helping the City of Flagstaff avoid upcoming bond payments and charting a brighter course for a stalled retail development, RED was able to rescue a troubled public-private partnership and boost its own portfolio by acquiring a quality asset, Aspen Place at The Sawmill. Early in the process, the bank sought RED’s assistance to determine the project’s market value and next course of action. Intense negotiations were required for this complicated deal, which succeeded in large measure because the City of Flagstaff was confident in RED’s ability to deliver a complete, well-executed project.
In a little more than a year, leases for nearly 70% of the existing space at Aspen Place at The Sawmill have been executed – up from 45% – and negotiations are underway with a new anchor for the second phase, scheduled to begin construction in 2013. (Existing square footage at Aspen Place was 68,000, with a planned total of 150,000 on 14 acres.)
“In acquiring this property, RED was able to critically evaluate a situation and structure the transaction - in a way that achieved everyone’s objectives.”
-Kevin Cooney, Vice President, National Bank of Arizona
Shops at Prescott Gateway, Prescott, AZ
RED’s purchase of the 40,000 square foot Shops at Prescott Gateway was far from a simple, one-step transaction. When the bank approached RED about this opportunity – the property was going into foreclosure in 2010 – several issues were unresolved. These included securing city approvals and a potential agreement with a marquee retailer, Trader Joe’s.
With money in escrow, RED negotiated with the lender for additional time to finalize city approvals, as well as a land purchase and development agreement, and to obtain the key commitment from Trader Joe’s.
Not only did this acquisition build a robust municipal partnership, but it also extended a strong banking relationship: RED’s acquisition of this property in spring 2011 was the third successful transaction associated with a National Bank of Arizona non-performing loan.
“RED has been a terrific partner for the City of Prescott in The Shops at Prescott Gateway, from the complicated process of closing on the land all the way through to delivering a highly desired, first-to-market retailer – Trader Joe’s. From bringing in great retailers to generating sales tax dollars and more, this project is a win for the entire community.”
-Marlin Kuykendall, Mayor of Prescott, AZ