LOVELAND – A New York investment firm has paid a bargain price for the Promenade Shops at Centerra.
G&I VI Promenade LLC was issued a special warranty deed for the regional lifestyle shopping center on Friday. Larimer County records indicate that the company, affiliated with DRA Advisors, headquartered in New York City, paid $75.5 million to acquire the property from CLC REO LLC, which bought it at auction in June for $85 million.
CLC was formed by the lenders, led by KeyBank, to place a pre-sale bid for the Promenade Shops at a public trustee foreclosure auction. When no other bidders stepped forward, CLC became the owner of the center at the intersection of Interstate 25 and U.S. Highway 34 in east Loveland.
The center had gone into foreclosure in November 2009, when Loveland developer McWhinney and Memphis-based manager Poag & McEwen Lifestyle Centers could not reach a refinancing agreement with the consortium of banks that had made the original $116 million construction loan in October 2004. The principal outstanding when foreclosure proceedings were initiated was $112.86 million with a total indebtedness of $117.2 million, leaving a deficiency of almost $32.2 million.
A call to DRA Advisors’ acquisitions office was not returned in time for this report.
According to its website, DRA Advisors specializes in real estate investment and management services for institutional and private investors, with more than $9 billion in assets under management. Its only other Colorado property is the Belleview Promenade, in the Denver Tech Center.
Local real estate observers see the sale as a positive step.
“It’s likely to be an improvement over having it owned by the bank,´ said Allen Ginsborg, principal and director of NewMark Merrill Colorado Mountain States in Fort Collins. “They can reinvest in grounds, marketing, merchandising – things banks don’t usually pay attention to. They might even take it up a notch.”
The rest of McWhinney’s 3,000-acre Centerra master-planned community has not been affected by the foreclosure and sale of the Promenade Shops. In October, CEO Chad McWhinney announced a new partnership with RED Development, a shopping center and management company, to develop “a significant amount of retail over the next 10 years.”
The initial focus for additional retail development will be east of the Promenade Shops, McWhinney added.