New Owner Plans to Resume Work on Kenwood Towne Place
- Aug 03, 2012
Phillips Edison Strategic Investment Fund II L.L.C. recently announced it has agreed to buy Kenwood Towne Place from a lending group led by Bank of America. The deal represents the third acquisition for Strategic Investment Fund II. Phillips Edison established the fund to focus on buying and improving large distressed real estate opportunities.
Phillips Edison lost with a $27.3 million bid to buy the troubled property at a foreclosure auction held last month; Bank of America was the winning bidder with $27.5 million. The price of the latest transaction was not disclosed. Phillips Edison expects the sale to be approved by a Hamilton County judge this month.
The $175 million development was one of Greater Cincinnati’s largest mixed-use projects, with 200,000 square feet of Class A office space and 300,000 square feet of upscale retail. Kenwood Towne Place is located along Interstate 71. Construction started in April 2007 but stopped at the end of 2008 due to the project’s financial problems. Just a few months later, in May 2009, Bank of America filed an $81 million foreclosure suit against the developer.
For the past three years, the partially finished shopping center in Sycamore Township has been an eyesore and a symbol of the economic downturn. Now, Phillips Edison plans to invest about $100 million to finish the development and add new tenants.
Messer Construction will serve as general contractor. Phillips Edison won’t make many changes to the initial plans by PDT Architects. The project was designed with an eight-story office tower above ground-level retail. Current retail tenants include Crate & Barrel, Mitchell’s Salon & Day Spa, The Container Store and LA Fitness. After the project is finished, another 150,000 square feet of retail space will be available.
Phillips Edison hopes to start work this fall. New tenants could move in by the end of next year.
David Birdsall, senior vice president & manager of the Strategic Investment Funds, considers the property an ideal candidate for the fund’s portfolio because it “is at the epicenter for Cincinnati commercial real estate … the dominant regional draw for retail in Southern Ohio and Northern Kentucky, (in) the healthiest office market in greater Cincinnati with one of the lowest office vacancy rates in the seven-county MSA.”
Image courtesy of Brinkmanjg.