VOL. 129 | NO. 86 | Friday, May 2, 2014
Eastgate Set for Possible Makeover
By Amos Maki
A venerable shopping center in East Memphis could be getting a significant makeover, according to a recent retail market report from CB Richard Ellis Memphis.
Eastgate Center LLC, the owner of Eastgate Shopping Center at Park Avenue and White Station Road in East Memphis, could make significant aesthetic improvements to the retail center beginning this year.
“In regards to activity in the East submarket, the owners of Eastgate are developing plans for refreshing the exterior of the iconic shopping center,” CBRE Memphis said in its first quarter retail report.
The retail center has been an East Memphis institution for decades. Belz Enterprises Inc. affiliates Belz Investco GP and Union Realty Co. GP. built the 445,907-square-foot shopping center in 1964.
Eastgate includes 91,366 square feet of office space and is anchored by Bed Bath & Beyond Inc., Stein Mart Inc., T.J. Maxx, Fresh Market and Burlington Coat Factory, among others.
In January 2010, Belz Enterprises Inc. sold Eastgate for $31.5 million to an affiliate of Dallas-based Arrow Retail. In 2012, Arrow Retail, an affiliate of Cypress Equities, rebranded itself as Cypress Equities Real Estate Investment Management.
Founded in 1995, Cypress focuses on the development and acquisition of retail centers and mixed-use developments. Cypress, which has five offices across the country, has developed and acquired more than 17 million square feet and is developing and managing a portfolio of more than 9.4 million square feet of retail, office, residential and automotive real estate.
Memphis International Airport Center in Southeast Memphis, which has recently experienced positive leasing activity, is back in the hands of a traditional landlord.
The still unidentified new ownership group acquired the portfolio for around $24 million, according to several real estate sources.
The new owner acquired the nine-building, 1.1 million-square-foot industrial portfolio from CSMC 2007-C1 Air Center LLC, an affiliate of the lender that acquired the property for $14.3 following foreclosure.
As reported in 2013 and 2014, MIAC has experienced strong activity since Cushman & Wakefield/Commercial Advisors was awarded leasing and management duties of the 1.1 million-square-foot portfolio in August 2012, when the park was below 50 percent occupancy.
In January, LeSaint Logistics announced it would expand its operations there. LeSaint entered the market last July when it leased an initial 57,285 square feet at 3300 Jet Cove inside MIAC. LeSaint is expanding its footprint by 34,015 square feet, a 60 percent increase to 91,300 square feet.
And late last year Lansing Building Products renewed its lease at MIAC and Mid-South Express Delivery Inc. signed a new lease.
Leco Realty Inc. is on the move. The company will relocate from 2240 Union Ave. to 3707 Macon on or before July 1.
Founded in 1982 by Bert Less, Leco Realty specializes in residential property management and investment sales, mostly single-family homes.
Less described the current environment for the sale of investment residential properties, which has been attracting large institutional investors, as “super competitive.”
“If there’s a house for sale, there’s going to be multiple offers on it,” Less said. “It’s a strong market.”
While large investors such as hedge funds have been pouring into the market, Less focuses on working with local investors instead of large, out-of-state institutional investors.
“I like local people, local investors who know the Memphis market,” Less said.
Glencore Grain, a leading exporter of Australian grain, has acquired two properties near Memphis International Airport.
Glencore, which originates, handles, stores, transports and markets wheat, barley, oilseeds, pulses, meals and cotton, has acquired two buildings totaling nearly 430,000 square feet for $1.5 million. Glencore acquired the 242,569-square-foot building at 1824 Castalia St. from Atkinson Realty for $980,000. Glencore also acquired the property at 2452 Frisco Ave. from Starr Storage Company LLC for $504,000.
Andy Cates and Preston Thomas of Colliers International represented Glencore in the transaction.
In other news, a development firm is inching closer to assembling the land it needs for a new Whole Foods store in Germantown.
Cypress Realty Holdings Co. has paid around $2.8 million for five residential parcels in Germantown where it intends to build the Memphis area’s second Whole Foods store.
Cypress Realty Holdings Co.’s acquisitions include two parcels fronting Poplar Avenue, 7811 U.S. 72 and 7837 U.S. 72. It paid another $650,000 for two adjacent parcels along Pete Mitchell Road. The company acquired part of the 7772 Dogwood Road property from Kenneth B. Norwood and Paul A. Norwood, co-trustees of the Norwood 2002 Family Trust. The company filed a $7 million construction deed of trust through Financial Federal Bank.
The Germantown Board of Mayor and Aldermen in January approved several zoning exemptions for the proposed 41,000-square-foot, freestanding Whole Foods store, which will be built at the southeast corner of the intersection of Poplar Avenue and Pete Mitchell Road, on the eastern edge of Germantown’s Central Business District.
Whole Foods, founded in 1980 in Austin, Texas, has been active in the Memphis area lately. In addition to the planned Germantown store, the specialty grocer recently opened a $3.1 million expansion of its East Memphis location. Whole Foods relocated the existing 25,000-square-foot store at 5022 Poplar into the space next door formerly occupied by Office Depot.