The retail power center was sold to New Jersey-based investment firm, Arilex Tropicana Associates LLC. The 589,191-square-foot property, one of the largest and most prominent in Las Vegas, is located at 3035 to 3375 E. Tropicana Ave. in the Tropicana Centre. Joe Bonifatto and Frank Marretti of Colliers International-Las Vegas and Christopher Maling and David Maling of Colliers International-Los Angeles and represented the seller, Gregg Williams.
The Tropicana Centre had been in receivership since the height of the recession in 2009. After years of being passed around by multiple receivers, Gregg Williams of Trident Pacific Real Estate Group was assigned the property. Williams’ 12 years of experience in receivership lent itself to managing the distressed property. In handling the power center, Williams set the goal of preserving its highest possible value.
“The change in the receiver really made the difference in shifting the fortunes of this property. Unlike previous receivers, he was invested in the property and was extremely committed to the success of the center,” says Bonifatto vice president at Colliers International-Las Vegas. “Gregg was really aggressive in improving the property and extremely willing to work with the Colliers team in making the center an investor-worthy asset. Having a client that truly understands what it takes to sell a property and is prepared to take the advisement of their brokers is definitely an important factor in a successful listing.”
When Colliers received the listing in July of 2012, the property had seen a continuous exodus of tenants and its occupancy rate plunged to 40 percent over the course of five years. The challenge for the Colliers team became restoring tenant confidence, which entailed stemming the exodus of tenants, filling the empty spaces and determining why current tenants were so resistant to remaining at the center. Bonifatto and Marretti immediately commenced an aggressive leasing campaign, which began with negotiating lease renewals with two of the largest entities in the center, Walmart and Sam’s Club.
Bonifatto and Marretti negotiated with both Walmart and Sam’s Club to stabilize their leases for a longer term. This resulted in Walmart extending its lease for 15 years and Sam’s Club signing a 10-year lease extension. Once these contracts were finalized, tenants began extending their leases and filling vacant spaces became significantly easier. At the end of the campaign, occupancy jumped to more than 80 percent.
“The sale of the Tropicana Centre can really be attributed to the capabilities of our investment team in understanding the local market and executing the actions that will result in the best outcome for our clients,” said Mike Mixer, managing partner of Colliers International–Las Vegas. “Very few retailers drive consumer traffic to a power center like a Walmart or a Sam’s Club. Frank and Joe really understood this. By pursuing these contracts, they created value and succeeded in restoring tenant confidence by making this center a destination shopping facility once more, where consumers could shop for and purchase everything from groceries to name-brand merchandise in every retail category.”
In addition to Walmart and Sam’s Club, the center, which sits on almost 60 acres at the highly trafficked intersection of South Pecos Road and East Tropicana Avenue, boasts a broad range of national credit tenants, including a drive-thru McDonalds, Sprouts Fresh Market, GameStop, KFC, Dollar Tree, and Radio Shack, among a variety of others.
With the center back to nearly full occupancy, the Colliers International team strived to sell the Tropicana Centre out of receivership. Eighteen months prior to handling the listing, the retail center was valued at approximately $27,000,000. The receiver set aside a period of about 45 days for potential buyers to submit offers. The team received 24 offers, with Arilex Tropicana Associates LLC making the best offer and ultimately purchasing the retail center.
“Our team at Colliers really did a tremendous job of handling this property,” said Bonifatto. “Through Chris and Dave’s expertise in selling troubled assets coupled with Frank and my developer/owner hands-on view of assets, and the team’s vast understanding of investment properties we were able to restore the property’s value.”
Each member of the team played a significant role in qualifying buyers through a short, but extremely vigorous selection process, which ultimately led to the buyers doing their due diligence up front and entering into a purchase agreement with all contingencies being waived.
“This transaction is a perfect example of how Colliers’ national presence can draw upon its regional and local experts to get the most value for our clients,” said Executive Managing Director Hans Mumper, who leads the firm’s operations in Los Angeles. “After winning the assignment, our first decision was to assemble a team that could analyze local market conditions by asking the right questions and then determine the best path forward to reach the ultimate objective of selling this highly visible center at a price that reflected its true value.”
About Colliers International
Colliers International is a global leader in commercial real estate services, with over 13,500 professionals operating out of more than 482 offices in 62 countries. A subsidiary of FirstService Corporation, Colliers International delivers a full range of services to real estate users, owners and investors worldwide, including global corporate solutions, brokerage, property and asset management, hotel investment sales and consulting, valuation, consulting and appraisal services, mortgage banking and insightful research. The latest annual survey by the Lipsey Company ranked Colliers International as the second-most recognized commercial real estate firm in the world.