Century Center
Location
Modesto, California
Property Type
Retail
Square Footage
214,772 square feet
Century Center is a retail center located on the major corridor of east Modesto (Oakdale Road) in a high-income neighborhood. Graceada Partners acquired this retail property for a cost basis of $12.25 million ($57 per square foot), representing an 11.7% cap rate on in-place NOI. This cost basis is a 66% discount to the property’s 2006 appraised value of $39 million.
Target Return
35%
Hold Period
7 months
Exit Cap Rate
5.3%
IRR
126%
Purchase Price
$12,250,000
Invested Equity
$4,700,000
Sale Price
$24,500,000
Equity Multiple
2.69
Century Center
Business plan
Due to its location and size, Century Center was a regional draw for retail until losing its two anchor tenants a decade ago
The center was poorly managed
The property sits in a protected trade area and benefits from a strong brand. Leasing strategy focused on lifestyle and restaurant/experiential retail as well as medical uses
Acquired at 66% below replacement cost
Renovation included new façade color scheme, parking lot, lighting, and monument signage
Added 64,000 sf of new and renewed leases, focusing on medical (particularly the surrounding aging population) and restaurant tenants, as these are “Amazon proof”
Attained parcel split allowing us to sell corner parcel to the tenant (Chase Bank) and remainder to investor
ESG initiatives included LED exterior and parking lighting as well as focus on the aging population surrounding the center and bringing health services to serve them
The property was sold for $24.5 million (exceeded pro forma)
$2,177,838 exit rent vs $1,472,392 at acquisition
