Promenade Place

1270 Promenade Pl, Eagan, MN 55121
Strategy: Current Yield
Status: Current
Purchase Price: $4,850,000
Acquisition Date: 7/12/2010
SqFt: 14,446
Off-Market, Repeat Broker

Promenade Place is south of St. Paul in the Eagan Promenade Shopping Center, an institutionally-owned, grocery-anchored power center with 278,000 SqFt. Promenade Place is the only small-shop retail building directly off Yankee Doodle Road at a signalized intersection.

Our firm identified this property while it was under construction because of its location. The previous owner leased the entire vacant property in the winter of 2009.

We put the property under contract at a 9.0% capitalization rate. In 2011 SITE Centers (Ticker: SITC) (formerly DDR Corp) sold the Eagan Promenade Shopping Center to Invesco at a sub 6.0% capitalization rate, making the risk/return profile of our purchase extremely attractive.

We declined an initial offer to acquire the property for $6.675M, which represented 37.6% in value creation. It was apparent that we could have countered and pushed the eventual sale price higher, but we opted to hold the asset given strong tenancy and its dominant positioning in one of the region’s best grocery-anchored shopping centers.