Redding Hilltop Center, Redding, CA

Property Type
Retail, Single Tenant

Region
Pacific

Strategy
Develop-to-Core

Investment Structure
Joint Venture

Acquired
3Q 2016

Footage
3,800

Number of Tenants
1

Tenant Sector
Consumer Electronics

Type of Lease
Net Disposition Price
$2,950,000

 

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Redding, CA


Investment Summary
We acquired this asset through long term brokerage relationships and designed a site plan and building that overcame city and tenant challenges, when others could not. The asset was a .5 acre vacant pad to a shopping center. We constructed a new freestanding building that is a corporately operated store. Redding is the largest city in California north of Sacramento and is the center of trade and commerce for the upstate region. The asset is ideally located amongst an exceedingly dense concentration of national retailers such as Michael’s, Cost Plus World Market, Best Buy and one block from Mt. Shasta Mall, the area’s premier regional mall. Major drivers to the retail trade area include a Walmart Superstore, Target, Costco, Kohl’s, and Home Depot. We closed the acquisition with an executed lease, approved permits, a guaranteed-maximum construction contract, and financing in-place. We employed a Develop-to-Core asset investment strategy, thus we planned to sell the asset soon after the tenant opens.

Value Creation
Designed a building that optimized leasing and was approved by the city, when others could not. Subdivided and entitled the parcel. Relocated a quality tenant from a nearby center. Executed a new 10-year net lease with a creditworthy national tenant. Exceeded targeted sales price by 12%.

Performance
Going-in cap rate 8.2%
Loan to value 57%
Net IRR 26%
Disposition date 4Q 2017
Term held (quarters) 5