Convenience Center, Wareham, MA
Convenience Center, Wareham, Massachusetts
Turning a tenant liability into an opportunity.
The Challenge
The owner of the 71,000 SF neighborhood convenience center was looking for a buyer. However, the property’s NOI was being negatively-impacted by the anchor grocery tenant. The owner brought Capstone Properties on board to help.
The Assignment
To prepare an investment sales offering memorandum and marketing strategy that would unlock the value in this asset.
The Solution
Capstone’s Investment Sales Analysis determined that while the rental rate of the grocery tenant, which represented over 21% of the center, was significantly below market rate, the lease would expire in less than three years.
Capstone devised a marketing campaign that articulated the significant value of the anchor grocery opportunity and leveraged the upside opportunity of the grocery space.Capstone Properties used its extensive experience and contacts in the grocery industry to target grocery users, investors, and developers.
The Result
By focusing attention on the potential of stabilizing the center with a long-term grocery lease at market rates, rather than the low NOI of the current situation, Capstone was able to sell the property for $2.9 million, which represented an 8.9% capitalization rate.