At a glance
- Sunbelt Stores sold the property, which totals about 505,000 square feet of land and nearly 120,000 square feet of existing buildings, in a transaction first reported by Connect CRE and brokered on the buy side by Edward Beeh of SRS Real Estate Partners.
- The existing buildings are not empty: At Home, Angry Crab Shack, and Pei Wei Asian Kitchen occupy them, so the purchase buys an occupied retail asset rather than a vacant pad.
- Spread over the full 505,000 square feet of land, the $18 million price comes to roughly $35.65 a square foot; applied to only the nearly 120,000 square feet of buildings, it works out to about $150 a square foot.
WinCo Foods has paid $18 million for 11.59 acres at 5205 E. Broadway in Tucson, a three-parcel assembly near the Broadway-Craycroft corner that gives the Boise, Idaho-based grocery chain a property position in a city where it operates no stores. Sunbelt Stores sold the property, which totals about 505,000 square feet of land and nearly 120,000 square feet of existing buildings, in a transaction first reported by Connect CRE and brokered on the buy side by Edward Beeh of SRS Real Estate Partners.
The existing buildings are not empty: At Home, Angry Crab Shack, and Pei Wei Asian Kitchen occupy them, so the purchase buys an occupied retail asset rather than a vacant pad. But the more logical object is the ground under those tenants, given that WinCo runs more than 140 employee-owned warehouse stores, sells groceries in bulk, competes on low prices, and has no Tucson location.
Spread over the full 505,000 square feet of land, the $18 million price comes to roughly $35.65 a square foot; applied to only the nearly 120,000 square feet of buildings, it works out to about $150 a square foot. Those buildings cover just 24 percent of the property, leaving roughly 385,000 square feet of ground outside the envelope—the proportions of a site-assembly deal rather than an income-property deal.
What WinCo will do with the site remains unstated, and it doesn't have to be: if it builds, the grocer enters Tucson owning its dirt at about $1.55 million an acre in a market it has yet to serve; if it doesn't, the corner keeps its occupied retail and the tenants keep paying rent. Either way, the existing leases buy time while the property holds the right to become a store. That right is what the purchase secures, and the tenants currently writing checks on East Broadway are effectively paying WinCo to keep that option open.
Reported by the Deals desk from Connect CRE. Published . Corrections