Scottsdale’s Promenade Trades for $110M, Marking One of Arizona’s Largest Shopping Center Deals
- Jul 15, 2011
July 15, 2011
By Barbra Murray, Contributing Editor
The Promenade, a 730,000 square-foot shopping center in one of the most prestigious neighborhoods in Scottsdale, Ariz., has come under new ownership in a transaction that marks one of the largest shopping center sales in Arizona’s history. Lucescu Realty orchestrated the disposition of The Promenade’s 433,500 square feet of owned space on behalf of a local private investor, ultimately closing a deal for Excel Trust Inc. to buy the premier asset for $110 million.
“This is a flagship property and there are not a lot of shopping centers in metropolitan Phoenix with 1 million square feet that are performing this well,” Mark Lucescu, president of Lucescu Realty, told Commercial Property Executive. “If there are a handful of properties like this to invest in Phoenix, this is the one you’d want to buy.”
The Promenade made its debut in 1999, featuring an architectural design that tips its hat to Frank Lloyd Wright and catches the eye of the affluent residents in an area that boasts the highest household income in metropolitan Phoenix. There is no shortage of offerings at the retail destination. The tenant roster for the segment involved in the sale lists such popular names as Nordstrom Rack, OfficeMax, PetSmart, Pier One Imports and Trader Joe’s. The entire property, including the anchors that were not part of the transaction, boasts a 100 percent occupancy level.
The price tag on The Promenade included an existing debt consisting of a $52.2 million securitized loan with a 4.8 percent interest rate and a maturity date in 2015. But the seller did not decide to wave good-bye to the asset due to any distress; there was none, as it was simply the right time. “The property was 100 percent leased, it was operating fine and it had plenty of equity,” Lucescu noted. “There has been a run-up in value for these types of Class A assets and the seller wanted to reallocate funds elsewhere. There was no pressure at all for the seller to sell or the buyer to buy.”
While the retail sector may be looking up, the big dollar sign attached to the Promenade deal was more indicative of the property’s quality and prominence than the market. “Excel was looking to invest on the West Coast and thought this was a unique opportunity to buy a well-located property,” he said. “They’re sharp and sophisticated people buying for the long haul and felt it was a good opportunity with good long-term value. You could wait 20 years to get a property of this quality in Phoenix again.”