In the fall of 2003, BSM Investments acquired Nippers Corner, a property that was comprised of four separate buildings sitting on 10.5 acres of land. It included 45,000 square feet of local retail space; a closed 25,000 square foot theatre and one outparcel which was occupied by a quick-lube oil change company.
The issues were:
1. What to do with the relatively small theatre parcel.
2. How to economically terminate or relocate several leases in order to allow for an anchor tenant.
3. What to do with a failing health club located in a former Walgreens at the end of the center.
4. How to handle recorded parking restrictions that were in place when the property was acquired and potentially stood in the way of the redevelopment.
Although it was a good real estate acquisition, the center was dated and had been poorly leased and managed for many years.
This was a complicated redevelopment project that required the integration and expertise of the BSM teams. The areas of legal, marketing, consulting, capital markets as well as construction were all needed.
BSM Consulting undertook an extensive demand/gap analysis. The conclusion of this analysis was that a demand existed for a new grocery user, a bank and other regional users.
The legal team of Boult Cummings Conners & Berry began unraveling multiple encumbrance issues that potentially stood in the way of redeveloping the theatre parcel along with other common areas located in the center.
The health club user, the quick lube business and the pad user would need to be replaced. These changes would allow the center to be upgraded and reflect the quality of the real estate.
Two and half years of effort resulted in the development of a new 45,000 square foot Publix Grocery store. This required the demolition of the tired theatre building and a separate retail building with three retail users. The health club lease was terminated and replaced by AmSouth Bank. The quick lube lease was successfully terminated and replaced by Smoothie King. A new, 8,000 square foot retail building was built next to Publix.
The entire sign package for the center was redesigned along with new parking, landscape and lighting designs.
A new permanent loan was placed on the property at an attractive interest rate which resulted in a substantial cash flow.
BSM Investments created a center worth over $19 million which represented a 35 % return.