VOL. 130 | NO. 140 | Tuesday, July 21, 2015
Memphis Real Estate Recap
Ikea Buys Cordova Acreage For Planned Memphis Store
Daily News & Chandler Reports Staff
41 Acres for
Future Ikea Store
Sale Amount: $5.7 million
Sale Date: July 10, 2015
Buyer: IKEA Property Inc.
Seller: Music City Investments LLC
Details: Ikea continues to take steps toward construction of its massive Cordova store.
According to documents filed July 10, IKEA Property Inc. purchased about 41 acres of land from Music City Investments LLC for $5.7 million.
The three parcels located on Germantown Parkway near Interstate 40 are valued at $5.4 million and have been renamed Ikea Way, according to the Shelby County Assessor of Property.
Earlier this month the Swedish furniture retailer applied for a $16 million building permit for the 269,000-square-foot store expected to open in fall 2016.
It is projected that the store will generate $15 million in new local tax revenue and employ 175 people.
4552 Poplar Ave., 4570 Poplar Ave.
2800 N. Germantown Parkway
Sale Amount: $17.6 million
Sale Date: July 7, 2015
Buyer: Seritage Growth Properties
Seller: Sears Holdings Inc.
Details: In part of a major transaction to increase cash flow and make their retail spaces more productive, Sears Holdings Corp. sold four Memphis properties to its newly formed public real estate investment trust, Seritage Growth Properties, for a combined $17.6 million.
Seritage Growth Properties, trading on the New York Stock Exchange under the symbol SRG, was formed by Sears in June. On July 7, Sears Holdings announced that it closed its rights offering and sale-leaseback transaction with Seritage for the sale of approximately 235 Sears and Kmart retail stores resulting in aggregate gross proceeds of $2.7 billion.
“We expect the creation of Seritage to enable us to accelerate many of the activities that we have been pursuing over the past several years to transform Sears Holdings into a leading integrated retail membership-focused company,” said Edward S. Lampert, Sears Holdings’ chairman and CEO, in a statement. “By separating a portion of Sears Holdings’ real estate portfolio into a new, publicly traded company, and leasing back the space, we are substantially enhancing Sears Holdings’ financial flexibility and significantly transforming our capital structure toward one that is more flexible, long-term oriented and less dependent on inventory and receivables.”
Lampert said Sears plans to continue operating most of its retail stores in each of the Seritage-owned locations while leasing the properties back from the REIT.
The properties that house the retail shopping centers on Poplar Avenue in East Memphis and at Wolfchase Galleria in Cordova sold in conjunction with two properties that Sears leases to On the Border and Avis Car Rental. The Sears at Southland Mall in Whitehaven was not included in the transaction.
Lease agreements between Sears and Seritage were filed at the time of sale.
The four properties have a combined tax appraisal value of $15.6 million, according to the Shelby County Assessor of Property.
4155 Quest Way
Memphis, TN 38115
Permit Cost: $2.2 million
Project Cost: $6.7 million
Application Date: July 2015
Owner/Tenant: Cummins Inc.
Contractor: Dan Walker Associates Inc.
Details: Cummins Inc. is retooling its current distribution center in Memphis as it prepares for a planned expansion.
Dan Walker Associates Inc. has applied for a nearly $2.2 million building permit to renovate the existing Cummins distribution center at 4155 Quest Way in southeast Memphis.
The renovation of the existing distribution center comes as Cummins prepares for a $6.7 million expansion that will see the Indiana-based company take over a 400,000-square-foot building at 5800 Challenge Drive, just across the street from the existing Cummins distribution facility on Quest Way.
Cummins and the state confirmed the expansion in May.
The board of the city-county Economic Development Growth Engine in February granted Cummins a 15-year payment-in-lieu-of-taxes incentive to retain 897 local jobs and create 70 new jobs. The PILOT would save the company $12.9 million while producing a local tax benefit of $59.6 million.
The company received the PILOT after saying it was exploring relocating operations across the state line to Mississippi.
Cummins – a global power company that designs, manufactures, distributes and services diesel and natural gas engines and related technologies – has multiple operations in Memphis and has been involved with the Memphis community for more than 30 years.
1433 Union Ave.
Memphis, TN 38104
Permit Cost: $2.2 million
Application Date: July 2015
Owner: Union Group LLC
Contractor: Archer Custom Builders
Details: The owner of the Nineteenth Century Club is prepared to launch a renovation of the historic building on Union Avenue.
Union Group LLC has applied for a $2.2 million building permit with the city-county Office of Construction Code Enforcement to proceed with renovations to turn the home at 1433 Union Ave. into a restaurant. Archer Custom Builders is listed as the contractor on the permit.
In late June, the building’s owners secured a $2.4 million construction loan. Union Group, Liang Lin and Xiao Dan Chen secured the construction loan from Bank of Bartlett, according to a June 26 deed of trust.
The 15,813-square-foot house was built in 1907. The Nineteenth Century Club, a philanthropic women’s organization, purchased the property in 1926 and held onto it for more than 80 years before growing maintenance costs prompted the club to put it on the market in 2012.