MarketPlace
Corner - Murfreesboro, Tennessee
The
Challenge
BP had closed its combination fuel and Burger King location
on Highway 96 in Murfreesboro, Tennessee. The 1.8 acre of
land contained one free standing building and a fuel canopy.
The location was a major intersection in the best retail
section of this fast growing submarket of Nashville.
1.
Contamination and remediation from operation of the
BP station.
2. A new retail building would have to set perpendicular
to Highway 96.
3. The price of the land was above market and significant
competition to purchase the property existed from end
users.
4. The existing signage did not meet Murfreesboro codes
but was critical to the projects success. This was due
to its height which made it visible after exiting from
Interstate 24 onto Highway 96.
5. The diligence period was only 90 days. |
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Our
Strategy
Although the intended project was only 15,000 square feet
in size, the need to quickly organize BSM’s expert
teams in marketing, finance, legal and local political relations
would be crucial for a successful outcome, especially with
the intense competition for the site.
BSM
Consulting provided an in-depth demand/gap analysis. The
market study concluded Hickory Hollow Mall was losing retail
traffic to Murfreesboro and some likely tenants could be
relocated to this project.
Although
the property was perpendicular to Highway 96, it was located
at a signalized intersection across from Target. To the
rear of the property was a ring road that connected to Super
Wal-Mart, Old Navy, Linens ‘N Things and other notable
national retailers. The BSM team felt the retail space farthest
from the main road (Highway 96) could be marketed as “the
north end cap”. This would be a desirable location
if the user was given prominent architectural features and
top position on the sign.
Quality
regional and national type tenants had to be quickly identified
and contacted. BSM had to call upon its existing tenant
relationships across the country to see which retailers
would commit to the site before BSM had to close on the
property.
The
legal team of Boult Cummings Conners & Berry was able
to use their extensive expertise dealing with environmental
sensitive properties to underwrite and quantify the environmental
risks that were associated with the project.
BSM
principals lobbied Murfreesboro planning commission to allow
the large interstate sign to remain and be granted a sign
permit through a successful variance process.
Results
Through an effective marketing and leasing process, BSM
quickly identified Men’s Wearhouse, who wanted to
relocate from Hickory Hollow Mall. Panera Bread and EB
Games were identified and were known to be expanding in
Middle Tennessee. AAA Auto Club of the South was contacted
and discovered they needed to reposition themselves out
of an existing center.
Panera
Bread leased the “north end cap” subject to
a successful variance process for the large interstate
sign. BSM was able to successfully demonstrate to the
Panera Bread real estate committee that although their
space was furthest from Hwy 96, the internal road network
to Wal-Mart and the other retailers would provide a successful
location for them. Panera Bread opened and maintains above
original projected sales.
Letters
of Intent were negotiated within a 90 day time period.
Leases were fully negotiated and executed. The center
was 80% preleased before construction began and opened
100% leased. The project came in on budget and on time.
Murfreesboro city and political officials praised the
finished project as cutting edge. They also appreciated
the team approach and follow through to several problems
that arose during the development process.
BSM
arranged for and placed a permanent loan on the property
at an attractive interest rate which resulted in substantial
cash flow. The property was sold to a 1031 buyer from
California. The total value created was 4.5 million dollars
and represented a yield on cost of 10.25%.
