Argosy Invests in Barry Towne Center
On November 14, 2016, Argosy Real Estate Partners III and its parallel funds made a controlling investment in the off-market acquisition of Barry Towne Center, a 273,000 square foot retail shopping center located in Kansas City, Missouri.
The distressed property was built in phases between 1996 and 2001 and is currently 47% occupied due to ownership’s unwillingness to invest in leasing costs and upkeep. The shopping center is anchored by Kohl’s and Babies ‘R Us and shadow-anchored by Target. The property is located approximately 10 miles north of downtown in a fast-growing area and is directly adjacent to a new Costco wholesale club which is under construction. The property also contains approximately 29 acres of undeveloped land that is zoned for a broad range of retail and service uses. The acquisition price represents a significant discount to both replacement cost and recent comparable trades in the market.
The business plan involves repositioning the shopping center through the implementation of a capital improvement program to address deferred maintenance and other physical upgrades necessary to backfill vacancy at the center with national and regional credit retailers. The partnership also intends to maximize the value of the 29 acres of undeveloped land through the development of freestanding single- and multi-tenant buildings pre-leased to creditworthy retailers.
The Fund’s partner and co-investor in the project is United Development Company, a Dallas-based developer and operator of retail shopping centers and single-tenant triple-net leased retail properties. United Development Company has long-standing relationships with national retailers and significant experience repositioning distressed shopping centers and developing new freestanding retail properties.