Tatum Point Shopping Center

Value Add

Purchased:
In 2011 for $30,000,000. Cash to existing loan of $10,800,000
Appraised Value when refinanced in 2014: $41,600,000

Project Equity:
Washington Capital and WVP private investors

Event:
Refinanced in 2014 upon stabilization and held for cash flow.

Location:
Phoenix, Arizona

Returns:
3 year Project IRR of 18.58%

Background:

· Larger 178,209 square foot center.

· Well located in Phoenix, West of Scottsdale and North of Paradise Valley.

· Wal Mart (NAP) property next door and planned to expand into grocery.

· Anchor tenant, Basha’s, declared bankruptcy and did not affirm lease in proceedings due to Wal Mart expanding into grocery at the location.

· Shop space still highly occupied despite extended anchor vacancy, proving a strong retail location.

· Existing loan had to be assumed due to large defeasance cost.

Strategy:

· Release the vacant anchor space.

· Build an outparcel to move Starbucks who desired a drive thru and increase leaseable area

· Update the image and look of the center through a mixture of stone, paint and façade work.

· Either refinance or sell upon stabilization and when original loan expired

Action Items:

· Leased the anchor space to two tenants: Big Lots and Sprinkler World.

· Designed and obtained approvals from the city to build outparcel.

· Constructed new parcel

· Moved Starbucks to new out parcel with drive through.

· Leased remainder of new space to Five Guys Hamburgers.

· Made significant cosmetic improvements including

o Wrapped columns with new stone

o Added new paint schemes

o Added new signage

o Improved ingress and egress

Result:

· Successful stabilization.

· Refinanced.

· Value of $41,600,000 on refinance date.

· Still owned and held for future cash flow.

Returns:

· 3 year Project Level IRR: 18.58%

Photographs:

BEFORE AFTER