Velocity Retail Group Sells Six Former Albertson’s Grocery Stores

Aerial view of Litchfield Road location.

Aerial view of Litchfield Road location.

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. 

Velocity Retail Group had worked with the ownership group since 2007 to lease these buildings and bring back a revenue stream for the owners, ACC Retail Associates, LLC, an entity controlled in a joint venture by Praedium Group out of New York and ScanlanKemperBard Companies out of Portland, Oregon.  When it was decided to sell the buildings, Velocity Retail Group was retained to complete the full-cycle. A marketing plan was created for each building with specifically targeted buyers.  The plan achieved optimum results.

The sixth and final building recently closed escrow and was 50,394 square feet on 5.5+/- acres 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 Michael Clark, Vice President for Velocity Retail.  “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.

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,” added Clark. 

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 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 was J&M Properties, LP, dba Fallas Discount Stores and was represented by CBRE 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.  The final sale price was $2.3 million. 

Velocity Retail Group is the dominant brokerage company in leasing and selling big boxes and is ranked as a top company according to the CoStar Group. Velocity has leased over 2 million square feet of big box retail in the past three years. 

“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.

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