A 20-asset real estate portfolio in the Grand Rapids area, which includes four retail shopping centers and covers a total of about 270,000 square feet of land, now has a new owner.
South Bend-based real estate private equity firm Great Lakes Capital recently announced it finalized on the note sale transaction in January of this year.
The 20 properties — comprised mostly of retail properties, vacant parcels of developable land and a storage facility — have been in receivership since Sept. 9, according to Great Lakes, which purchased the properties through its Credit Opportunity Fund I.
“We were able to acquire a secured note at a significant discount to the outstanding balance and, through a complex transaction, ultimate fee simple ownership to the underlying collateral,” said Jeff Smoke, Great Lakes Capital director of development.
“The properties are a strategic fit for our Credit Opportunity Fund I. They will allow us to significantly expand our retail footprint with exceptional property locations in a very robust Grand Rapids market.”
Smoke said Great Lakes Capital, which has an asset footprint that is expanding in the Midwest region, has a comprehensive strategy to renovate and reposition some of the properties in order to either sell them or hold them long term.
Great Lakes Capital is “opportunistic,” he said, adding that, for most of the sites, “we plan on holding them, but we’re open to selling.”
“It helps us grow our presence in the retail sector, and especially in Grand Rapids, which is a great market. It gives us exposure to see more opportunities … gives us opportunity to do more ground-up construction in the area,” he said.
“As we get them leased up, we’ll see what to do. Grand Rapids is a tight market, so there’s a lot of interest. It’s good for all exit options.”
Some of the major purchases in the sale were three retail centers on 28th Street, Smoke said. Those centers, from west to east, are: Oakestown Center, 3000 28th St. SW, Grandville; Ridgemoor Center, 2841-2959 28th St. SE, Kentwood; and Cascade Center, 6250 28th St. SE, Grand Rapids.
In the Oakestown Center, which is a 32,208-square-foot retail center, Great Lakes Capital is looking to add a couple of restaurants, Smoke said. Restaurants and a possible new fitness center are also under consideration for Ridgemoor Center and for Cascade Center, a 43,096-square-foot retail center in Cascade Township.
“Ridgemoor is unique because it also has a lower level. It’s in a prime location (and it works) for a tenant that might need more square footage that isn’t visible,” he said.
Great Lakes Capital plans to spend more than $1.5 million renovating those centers, with Grand Rapids-based C.D. Barnes serving as contractor on the project.
The work, which will focus on extensive façade renovation, is expected to start in the next couple of weeks, Smoke said.
Great Lakes Capital also purchased and is rebranding the former Evergreen Moving and Storage space at 4000 Alpine Ave. NW in Comstock Park. That building is now being called Alpine Secure, Smoke said, and it is unique because it’s a climate-controlled facility that is all brick, offering very high-quality storage space.
Smoke also was excited about the purchase of Yorktown Center, a 29,470-square-foot retail center at 4022 Alpine Ave. NW, Comstock Park.
“That one doesn’t need any work. We’re just going to reposition it with new and existing tenants,” he said.
“We also have a couple of vacant parcels of land just to the north of it,” he said, referring to approximately 3.5 acres at 4076 Alpine Ave. NW. “We could develop it or sell it. We don’t have set plans right now.”