The owners of six vacant Phoenix-area Albertson’s grocery stores were faced with a challenge in 2012. The partnership wanted to sell the assets at a time, and in a market, that was saturated with big boxes. Four of these buildings were in the southeast valley, which had been hardest hit by big box vacancy. Retail commercial real estate in the Phoenix area was going through one of the worst markets on record with vacancy rates over 13% and over 25 vacant grocery stores hitting the market from the Basha’s grocery chain restructure.

ACC Retail Associates, LLC, an entity controlled in a joint venture by Praedium Group out of New York and Scanlan Kemper Bard Companies out of Portland, Oregon had retained Velocity Retail Group since 2007 to lease their properties. When it was decided to sell the buildings, Velocity Retail Group was asked to complete the full-cycle. A marketing plan was created for each building with specifically targeted buyers. The plan achieved optimum results when the sixth and final building closed recently.

The six buildings totaled over 350,000-square-feet and closed escrow over the past several months. They were sold to investors, retailers, and one to a charter school. “In each case we were able to identify the unique purchaser and negotiate a sale that benefitted both the buyer and seller,” said Michael Clark, Vice President for Velocity Retail in Phoenix.

The sixth building was 50,394-square-feet ($46 PSF) on 5.5+/- acres sold for $2.3 million at 409 N. Litchfield Road in Goodyear, Arizona. “In a little over a year, we were able to successfully sell each of the six assets for the ownership group,” said Clark. “While each building was a unique transaction, the bottom line is that in a market with over 280 vacant big boxes we were able to sell these assets in a relatively short period of time, providing the seller the necessary equity return for their partners,” he added.

For the building at Ray and Alma School, Pruitt’s Furniture purchased the building for their Flagship east valley store. At Baseline and Power, a building occupied by 99 Cent Only and Goodwill of Central Arizona, a California investor purchased for the NNN income stream. At Ray and Cooper, LEAD Charter School purchased and will convert the building to a new campus. Main and Dobson was purchased by Ultimate Consignment for their east valley store. Cactus and 75th Avenue, leased by Lee Lee’s Oriental Market, was purchased by an investor for the NNN income stream.

The final building in the portfolio was the Goodyear building, Capital Pacific, LLC out of Lake Oswego, Oregon and Velocity Retail’s Michael Clark and Darren Pitts represented the Sellers. The buyer, J&M Properties, LP, dba Fallas Discount Stores, was represented by CBRE of Los Angeles’s broker, Richard Rizika, who is the master broker for the buyer, and Velocity Retail Group’s Dave Cheatham.

The building was subdivided in 2008 for Big Lots which has a lease for a 27,500-square-foot store. Fallas will operate their retail store in the remaining 22,894 square feet. The purchase included the lease for the existing Big Lots in the final sale price of $2.3 million.

“Being able to consult and provide the best real estate services to our client from the very beginning of their real estate purchase, through the leasing, and then finally as these buildings were sold is the ultimate in ‘hitting for the cycle’,” said Darren Pitts, Executive Vice President for Velocity Retail. “The results we are able to provide, coupled with the market intelligence our clients need, are key differentiators in the world of retail real estate,” he added.

For more information, Velocity Retail Group can be reached at (602) 682-8100.

The vacant former site of International School of Tucson (IST) located on the southeast and northeast corner of Lester Street and First Ave in Tucson sold for $832,500 ($100 PSF) for redevelopment. The buyer, Pinnacle Realty Investors LLC of Tucson (Jarrett Reidhead, managing member) is an experienced real estate investor and broker who sees the potential of the property for student housing.

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[mepr-show rules=”58038″]The property has 3,814 sq. ft. in two buildings (built 1953) on a 33,583 sq. ft. lot at the southeast corner, 711 & 715 E Lester Street, and two approximately 2,200 sq. ft. buildings (built 1972) on a 22,491 sq. ft. lot at the northeast corner, 1724 & 1730 N 1st Ave. The buyer expects to redevelop the property into multifamily rental units of some type.

The prior tenant, IST, is a private school offering language immersion programs from pre-school to grade 5 instruction in Chinese / English, French / English, German / English and Spanish / English for 110 students. IST got its start at this location occupying both sides of the street before IST was able to lease Jefferson Park School at 1701 E Seneca Street, from Tucson Unified School District (TUSD) in 2012, as a private and not a charter school.

The sellers were several investment groups all managed by Steven Denny, a local real estate investor and broker.

Reidhead with Tucson Integrity Realty of Tucson and Denny with Spring Mill Properties were both self-represented in the transaction.

Reidhead can be reached at (520) 331-8050 and Denny should be contacted at (520) 617-0510. [/mepr-show]

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[ismember] The transaction took place in four documents. On 7/1/2013, 3,814 SF on a 15,708 SF lot at 1724 & 1730 N 1st Ave sold for $257,500. On 8/12/2013 there were three other documents from 3 different selling LLCs: Hillcrest, LLC sold 2,340 SF on 11,250 SF lot at 715 E Lester Street for $180,000. Lookout Properties, LLC sold 2,147 SF on 11,241 SF lot at 711 E Lester Street for $165,000. Then Hillcrest and Lookout Properties jointly sold a 17,874 SF vacant lot being used as a parking lot at 720 & 726 E Lester Street for $230,000. The buyer reported that these transactions were all negotiated together and were purchased with a private loan with zero down.[/ismember]

Tucson Small School Project (TSSP) dba City High School purchased the historic building known as the Cele Peterson Building at 37-48 E Pennington Street in Downtown Tucson for $1.8 million ($66 PSF) from Four Peterson, LLC of Tucson (Eva Ann Peterson, Manager). TSSP was founded in 2002 with two primary goals: first, to launch and oversee a small, high quality charter high school in downtown Tucson; and second, to promote professional development and community dialogue in order to foster smaller and more equitable learning communities for all students in Arizona.

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[mepr-show rules=”58038″]The Arizona State Board for Charter Schools approved the TSSP charter application for City High School in March 2003 and the school opened for its first year of operation in September 2004 at 48 E Pennington Street. Tucson Small School Project is an Arizona nonprofit corporation with 501(c)3 status and is governed by a board of directors.

City High School then leased the property at 48 E Pennington Street from the Pederson Family, with 80 students in grades 9 and 10 enrolled. City High School now enrolls close to 200 students in grades 9-12 and has over 125 graduates pursuing a variety of college and career pathways in Arizona and beyond. The school expanded about six years ago, into 37 E Pennington Street, the property that was recipient of a Downtown Partnership grant from the City of Tucson and private donations for $35,000 in matching funds to the owners of historic buildings for $70,000 worth in restoration last year.

The property’s namesake, Cele Peterson’s Fashions, moved to 46-48 E Pennington in 1937. The Peterson family had to rebuild in 1958, after a fire. The building at 37 E Pennington Street (built 1941) first tenant was Howard & Stofft Stationers and was later occupied by Shoe City, before the Peterson family bought it in the 1980s. The business survived two World Wars and was once known as “Fashionable Pennington Street” due to the fashion powerhouse, Cele Peterson. The property is eligible for listing in the National Register of Historic Places.

City High School’s location and size allows teachers and students to engage in frequent field studies, using Tucson as a textbook, and engaging in real world learning. “We see Downtown as the cultural, political, and economic hub of the city,” said co-founder Carrie Brennan. “It’s central to our mission.”

The school participates in 2nd Saturdays Downtown and have hosted teas for former store employees reminiscent of the days when the store held teas for its sophisticated, affluent, and stylish customers.

For more information on City High School, contact (520) 623-7223. [/mepr-show]