Hunstville, AL Grocery-Anchored Retail Redevelopment
Prior to land acquisition, the Partnership executed a 20-year lease with Publix Super Market and had significant leasing demand for the to-be-developed 34K SF of shop space.
The development underwrote to a compelling 39% margin.
The Partnership elected to redevelop the entire retail site except for the existing 28K SF Staples store, which was leased at ~50% below market.
Seller-financing with accruing interest was used to maximize returns on the outparcels.
At completion, the total project cost was 3% under budget.
Original underwriting anticipated a sale in Year 3 upon stabilization however, the Property was ultimately sold via a 12-property marketed portfolio recapitalization to an institutional buyer upon completion, 15 months earlier than planned. The exit cap was 100bps better than underwriting.
Following the sale, the Partnership retained three outparcels and one under-construction shop building. Two of the outparcels and the shop building have since been sold.