Long Island Center Sells Despite Debt
- Jan 29, 2009
Selling a retail property–or any property, for that matter–with a big debt attached is no simple feat in the current real estate climate, but Sperry Van Ness has managed to do just that. Acting on behalf of Stillwater Capital and partners, the real estate services firm closed the sale of the 131,900-square-foot Voice Road Plaza in Carle Place, N.Y., to a 1031 multi-family investor for just over $36.2 million, including the assumption of a $23 million mortgage.
Occupying 8.3 acres on Long Island, Voice Road Plaza was developed in 1951 and renovated in 1996. In December 2006, Stillwater, along with two operating partners, snapped up the property from First Allied Corp. for nearly $35.4 million, with plans for a short-term hold.
Vacancy at the property–anchored by Staples, Big Lots, Party City, Dress Barn and Bass–reached its current level of 98.8 percent. Then the tide turned. The seller had put the community shopping center up for sale through another broker before turning to Sperry Van Ness, which originally marketed the asset with a price tag of $41 million, before lowering it to $39 million.
“We had higher offers but we didn’t have the confidence that they had the ability and intention of closing at hat number,” Joseph French, national director of retail for Sperry Van Ness, told CPN. “We had a large pool of potential buyers, but the property had a $23 million loan in place and they had to come up with an additional $13 million in cash, so the pool of buyers kept shrinking and shrinking.”
After 10 months and 175 sale packages, Sperry Van Ness found a buyer represented by Double-Click Realty. Considering that Stillwater purchased Voice Road Plaza in the glory days of 2006, and sold during one of the lowest points in the real estate market in quite some time, the fact that the company walked away with a nearly $1 million profit is somewhat significant.
“It wasn’t what they hoped to make but it’s better than losing money–and believe me, there are people who are going to lose money,” French said. “Everything went as planned for the seller, except the market tanking. But they’re quite happy to get out with a profit.”