Helena Marketplace
2008 - present
Leasing and Property Management since 2008.
The average rent in 2008 was $13psf, today vacancies lease above $20psf.
- GLA: 79,756 SF
- Ownership: Family Office in California
- ROI: $7p sf increase
- Wins: Walmart Neighborhood Market, All Original Pizza, Great Clips, Urgent Care, Thai Basil, ThirsTea Café
The Story
Helena Marketplace faced the challenge of finding a replacement tenant after Winn Dixie’s closure in 2010. The ownership team secured a long-term lease with Walmart Neighborhood Grocery after two and a half years of negotiation. This resulted in approximately $1.2 million increase in overall property value, demonstrating the importance of identifying the highest and best use for a property and being patient in securing the right tenant. This case study serves as an example for commercial real estate owners looking to add value to their investment through tenant selection and negotiation.
"We continue our partnership with Retail Specialists because of their local market expertise and commitment to finding the best solutions for our property. Their team has consistently demonstrated a deep understanding of the market and a dedication to delivering results that align with our goals. They have been instrumental in securing high-quality tenants, such as Walmart Neighborhood Grocery, and have added significant value to our investment."
During the course of the leasing and management relationship, Retail Specialists has enhanced the overall quality of the tenants that now include:
- Walmart Neighborhood Grocery
- All Original Pizza
- Grandview Urgent Care
- ThirsTea Café
- Infinity Nails
- Great Clips
- Beauty Buzz
- Thai Basil
The Situation
Helena Marketplace in Helena, Alabama was faced with a significant challenge when Winn Dixie, the anchor tenant of the property, announced its closure. The ownership team had to work quickly to find a suitable replacement that would not only fill the void left by Winn Dixie but also add value to the property.
This case study highlights how the ownership team’s patience, diligence, and ability to identify the highest and best use for the property resulted in a long-term lease with Walmart Neighborhood Grocery, adding approximately $7 million in overall value to the center.
The average rent in 2008 was $13psf, today vacancies lease above $20psf.
Background
The ownership team of Helena Marketplace had a long list of prospective retailers that could potentially fill the void left by Winn Dixie. The list included local and regional grocers, discounters, and hard goods retailers.
The team provided the ownership with several different scenarios for each tenant, showing the immediate effects on the net operating income, capital expenditures, return on investment, and overall value of the property.
Despite several prospective retailers, the ownership team felt that Walmart Neighborhood Grocery was the best fit for the property.
While Walmart Neighborhood Grocery was the preferred tenant, securing a deal with them was not without its challenges.
The ownership team spent two and a half years courting Walmart, which included numerous twists and turns in the negotiation process. The initial offer from Walmart was to purchase the property at a discount, but the ownership team was able to leverage their negotiation skills to secure a long-term lease agreement instead.
The deal required a lot of patience, diligence, and trust in the team’s ability to secure the best outcome for their investors.
After two and a half years of negotiation, the ownership team secured a long-term lease with Walmart Neighborhood Grocery.
This was a significant win for the ownership team as they were able to secure a tenant with some of the best credit in the commercial real estate universe. The Walmart lease coupled with the buyout deal worked out with Winn Dixie added approximately $7 million in overall value to the center.
By identifying the highest and best use for the property and being patient in securing the right tenant, the ownership team was able to add significant value to their investment.
Outcome
The case of Helena Marketplace demonstrates the importance of identifying the highest and best use for a property and being patient in securing the right tenant. The ownership team’s ability to leverage their negotiation skills and secure a long-term lease agreement with Walmart Neighborhood Grocery resulted in a $7 million increase in overall property value.
This case study serves as an excellent example for commercial real estate owners looking to add value to their investment through tenant selection and negotiation.
