REAL ESTATE: McWhinney develops interest in New Mexico retail project

Most in the real estate industry know McWhinney Enterprises as the company that’s made east Loveland the development nexus of Northern Colorado with its 3,000-acre Centerra project.

Little known is McWhinney’s work outside of Colorado.

The company recently took on a contract with Sportsman’s Warehouse to develop a 61,441-square-foot store for the sporting goods retailer in Albuquerque, N.M. The store is scheduled to open in June.

As planned, McWhinney will build the store and lease it back to Sportsman’s Warehouse.

The New Mexico deal is rooted at Centerra, where Sportsman’s Warehouse opened its first Colorado outlet in 2001.

“It’s pretty much relationship driven,´ said Troy McWhinney, speaking of the company’s out-of-state interests. “If our efforts here might lead to something, we would look at it. But pretty much we’re focused here in Northern Colorado.”

McWhinney’s biggest out-of-state venture was in Southern California, where McWhinney worked with Stonebridge Development on the Harbor Corridor Hospitality Plaza in Garden Grove, Calif. Under a joint venture, McWhinney and Stonebridge developed three hotels with 512 total rooms at the site. Similarly, McWhinney and Stonebridge have joint-ventured on two hotels at Centerra totaling 164 rooms.

On the topic of Centerra, McWhinney Enterprises is closer to springing a new retail expansion.

The developer has started marketing its ground at the Centerra Marketplace just west of Sportsman’s Warehouse. The project calls for a large anchor of up to 86,000 square feet, four secondary — or “sub-major” — buildings between 18,000 and 23,000 square feet, and about 27,000 square feet of in-line space.

“We refer to it as ?phase two,’´ said Peter Coakley, vice president of real estate for McWhinney Enterprises. The project spans 31 acres.

McWhinney’s targeting national retailers to answer the call.

“The types of tenants we’d like to attract would include names like Kohl’s,” Coakley said. Candidates for the secondary buildings could be Jo-Ann Fabrics, TJ Maxx, Staples and Ross Dress for Less, he said.

Drug store mystery explained

The drug store wars in Northern Colorado are well documented. Rivals Walgreen and Eckerd are building new stores throughout the region at rapid rates. Walgreen has even acquired the former Toddy’s grocery store in Greeley to gain a position along the 10th Street corridor in west Greeley.

So, with such expansion in the works, how come neither company has acquired the nearly new, but vacant, Rite Aid building in southeast Fort Collins?

A few well-placed sources in the commercial real estate business have hinted at the answer.

A developer built the 13,800-square-foot facility, 3609 Timberline Road, in 2000 under a build-to-suit agreement with Rite Aid. But the retailer mothballed the store before it opened. The Pennsylvania-based company was going through financial troubles at the time, including Chapter 11-bankruptcy reorganization, and pulled out of numerous stores across the country.

Still, Rite Aid was already committed to a long-term lease on the Fort Collins property and pays approximately $250,000 a year in base rent. Consequently, the building owner has not been highly motivated to cut a deal for the property, now listed for about $3.3 million.

In the meantime, Eckerd and Walgreen have built plenty of stores from scratch, and the market for another drug store in the old Rite Aid space is probably gone.

“To me, it’s a remodel project that ends up as a bank or something else,´ said one commercial broker.

Even then, the broker said, a sale isn’t likely to occur soon unless Rite Aid agrees to cut a check to a new buyer to defray the cost of the acquisition.

Commercial vacancies steady

The latest commercial property vacancy survey from Realtec Commercial Real Estate showed only minor changes across Northern Colorado over the closing months of 2003.

In the fourth quarter, industrial vacancies in Fort Collins loosened to 6.2 percent from 5 percent in the third quarter.

Greeley and Loveland both experienced slight tightening in the industrial sector. Greeley reported a 7.1 percent vacancy, down from 8 percent, while Loveland’s vacancy rate diminished to 5.6 percent from 6 percent.

Retail space opened up in all three markets. Fort Collins saw vacancies grow to 6.6 percent from 4.3; Loveland increased to 5.9 percent from 4, and Greeley expanded to 8.2 percent from 6 percent.

In the office sector, Fort Collins landlords showed improvement, with vacancies down to 11.1 percent from 12.5 in the third quarter. Greeley experienced a similar decline, to 10.8 percent from 13. Loveland’s office vacancy, however, ballooned to 16.8 percent from 13 percent.

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