Success: Sale of Shopping Center to 1031 Buyer

Challenges
When tasked with a multi-tenant shopping center portfolio, Justin Langlois and the team at Stirling Investment Advisors (SIA) were asked to sell a shopping center in the rural town of Ville Platte, Louisiana.

Occupancy: The shopping center was only 76% occupied at the time of sale, posing a challenge in attracting potential buyers.

Market Competition: While the property enjoyed excellent visibility and was located in a heavily trafficked area next to Walmart, there were limitations on potential prospects for the investment offering.

Actions
Strategic Marketing: A comprehensive offering memorandum was created to showcase the potential of the shopping center, emphasizing its prime location, proximity to Walmart Supercenter, and a range of popular national retailers.

Lease Optimization: Efforts were made to highlight the existing leases, which provided renewal options with rental increases, showcasing the income-generating potential of the property.

Price Adjustment: To address the challenges of occupancy and market competition, the sales price was adjusted to attract potential buyers.

Results

  • Successful Sale: Despite the initial challenges, the Ville Platte Shopping Center was sold for a final sales price of $1,600,000.
  • Cap Rate: An aggressive cap rate of 7.37% was achieved in an investment climate where CRE investors are trying to achieve a minimum of 8.50% returns.
  • Increased Occupancy: The strategic marketing efforts and lease optimization contributed to attracting buyers, resulting in an increased occupancy rate. A new 5yr lease with Dollar Tree made the investment very attractive to the 1031 investor.
  • Satisfied Seller: The seller achieved its objective of selling the shopping center, and the final sales price exceeded the seller’s reserve.


Testimonial
"We are extremely satisfied with the outcome of the sale of Ville Platte Shopping Center. Despite the initial challenges of occupancy and market competition, Justin and his team implemented a strategic approach that helped us secure a buyer and achieve a favorable sales price. Their dedication, market knowledge, and negotiation skills were instrumental in navigating the complex process. We would highly recommend their services to anyone looking to sell their commercial property." - Tim Sopok - Rialto