A 162,000 square foot community center located in a prime location in Addison, Texas was acquired in December 2003. The property was acquired from a lender at a price of $12 million representing a cap rate of 9.5% on in-place NOI. The investment strategy included redeveloping the first floor retail space of a vacant Service Merchandise store, addition of an outparcel, increasing the quality and rental rates of small shop space, and attempting to acquire the underlying ground lease.
After almost 13 years of ownership, the above strategy was fully implemented. The property was sold in September 2016 for $37.65 million coterminous with the acquisition of the ground lease for $10 million. The sale represented a 6.0% cap on in-place NOI. The investment provided a greater than 33% IRR to investors along with an equity multiple exceeding five times the original equity invested.